By John Phillips
The highly anticipated maiden JORC for the Colluli Potash deposit in Eritrea has arrived, and did not disappoint South Boulder Mines (ASX: STB) shareholders.
The maiden resource breakdown is:
- 548 million tonnes at 18.58% KCl, for a total contained potash of 102 million tonnes; and
- This includes, 119 million tonnes at 23.14% KCl.
Adding some extra spice to the result, the recently increased exploration target has been increased again, and now stands at; 750 million tonnes to 1.25 billion tonnes at 18-20% KCl.
This maiden resource represents the first stage of a mining engineering study into the optimum production capacity from open pit mining.
The study will investigate a range of production scenarios from 1 million tonnes to 10 million tonnes annually.
What adds to the project is the ease of excavation, with the potash resource located between 22 and 65 metres from the surface, with mineralisation open in all directions.
South Boulder said a resource upgrade is already expected after some recent very positive results.
Future production will be relatively straight forward, as all potash is contained within potash minerals, which can be processed using standard techniques.
Drilling will start again later this month, with a second rig to be onsite in February to increase exploration.
A scoping study is expected to be delivered by the company in mid-2011.
Colluli has a close proximity to the coast and has an abandoned railway line running through the deposit.
Eritrea is a country in the Horn of Africa, bordered by Sudan in the west, and Ethiopia in the south.
In morning trade South Boulder is up 19% at $4.19.
By Nick Evans, Business Reporter
SOUTH Boulder Mines has been forced to beat a retreat from claims it made in an announcement that sent the company’s shares soaring this morning.
The company announced a maiden 547.6 million tonne mineral resource from its Colluli potash project in Eritrea this morning, saying the shallow nature of the deposit could lead it to being a relatively cheap mine to operate.
South Boulder shares leapt on the announcement, climbing as much as 59c, or 19.7 per cent, to $4.20 at one point before closing the day at $4.18.
But the company was forced into an embarrassing retraction of part of its statement, after breaching stock exchange rules about broadcasting project value estimates before studies into the economic viability of a mine have been completed.
In its initial release South Boulder estimated the value of Colluli in the tens of billions of dollars, using current potash prices, but was forced to issue a statement later in the afternoon retracting that portion of its release.
South Boulder shares have been one of the most eagerly watched on the market since the beginning of December, when the company was trading at only $1.33.
Potash has been a hot space over the last 12 months, particularly since BHP’s aborted effort to take over Canada’s Potash Corp last year.