SOUTH Boulder Mines’s 50/50 Joing Venture with the Eritrean National Mining Company (ENAMCO) delivered many positives during Fiscal Year 2014.
This included finalisation of the Colluli Mining Share Company (CMSC) shareholders agreement, re-evaluation of resource development options for the project, re-establishing the feasibility study with an alternate development strategy, assigning key consultants to all major work streams and allocation of the transport corridor and land for the product export facility.
The joint venture company is known as the Colluli Mining Share Company (CMSC).
The project benefits from being a very large, long life, at surface deposit that is highly amenable to open pit mining methods, while also being located near key infrastructure, including close proximity to the Red Sea shipping corridor.
Only 75 kilometres separates the mine site and the coastline.
South Boulder and ENAMCO have recently commenced discussions with a number of third parties interested in becoming involved in the Colluli Potash Project.
The company said that these discussions are at an early stage or subject to confidentiality agreements.
THE COLLULI POTASH PROJECT
The Colluli resource is a unique combination of potassium bearing salts suitable for the production of potassium fertilisers.
It hosts 1 billion tonnes of potassium salts and has a current JORC Compliant Measured, Indicated and Inferred Resource.
This is comprised of 261.81Mt at 17.94% KCl or 11.33% K2O of Measured Resources, 674.48Mt at 17.98% KCl or 11.36% K2O of Indicated Resources and 143.50Mt at 18.00% KCl or 11.37% K2O of Inferred Resources.
The total is 1,080 Mt at 18.0% KCl or 11.35% K2O (total contained potash of 194.09Mt KCl or 122.61Mt K2O).
WORK PROGRAM OVER THE NEXT 12 – 18 MONTHS
Feasibility work has commenced to support the alternate processing strategy. This includes laboratory testing of specific components of the processing plant, infrastructure and mining design.
Terms of reference are currently being formulated for pilot testing of the process design.
Key items to be addressed over the next 12 months include:
– Liberation and mineralisation tests.
– Laboratory scale processing tests.
– Finalisation of the process plant design.
– Piloting relevant sections of the processing plant.
– Transfer of the resource model from Ercosplan to AMC Consultants.
– Finalisation of the mining method based on material characterisation work.
– Infrastructure design.
– Capital and operating costs versus processing plant size (pre-feasibility and feasibility level).
– Submission of baseline environmental studies.
South Boulder said that of particular importance is the consolidation of the management of all of the project work streams to Perth which has an immediate cost benefit and has positively impacted delivery times.
The revised development strategy for Colluli includes the processing all forms of potassium bearing salts, which reduces mining costs significantly.
Process testing of salts from Colluli has commenced to determine the most suitable processing circuit.
South Boulder has indicated that the combination of all salts can produce potassium sulphate, a potash fertiliser which currently sells at twice the price of the more common potassium chloride.
Key catalysts will be the Pre-Feasibility Study which will be followed by a Definitive Feasibility Study.
The company is well-funded with $9.3 million in cash at 01 June 2014.