From: Biniam Haile \(SWE\) (eritrea.lave@comhem.se)
Date: Thu Jul 30 2009 - 21:41:54 EDT
Eritrea Potash License Granted
Announced by: STB
Announced on: 28/07/2009 11:13:00
ERITREA POTASH LICENSE GRANTED South Boulder Mines Ltd (ASX: STB) is
extremely pleased to announce that the Colluli Potash Project
exploration license has
been officially granted by the Eritrean Ministry of Energy and Mines.
The Project is located in the Danakil Depression region of Eritrea
approximately 200kms south east of the Capital Asmara and comprises
906km2.
The Project consists of buried evaporite deposits in which two shallow
potash bearing horizons were identified from historic diamond drilling
conducted in 1968 by the former Ethiopian Potash
Company (EPC). The first horizon intersected an average thickness of
1.7m sylvinite with average grades of 12.5% K2O at depths to the top of
the horizon ranging from 23m - 180m. The second horizon intersected an
average thickness of 17m carnallite with average grades of 50 - 70wt%
*(~17% K2O) at depths to the top of the horizon at 390m.
The Danakil Depression has ancient history of artisanal salt production
with modern exploration and exploitation dating back to the early
1900's. The most intensive period of exploration and trial underground
mining occurred between 1958 - 1970 at the Musley and Crescent deposits,
located approximately 15km south west of
Colluli at Dallol, Ethiopia. Since 1968 there has been no exploration at
the Colluli Potash Project.
The project is located less than 100kms south of the shallow water port
of Mersa Fatma and less than 200kms south east of the deep water port of
Massawa. The potential to utilise solar evaporation and solution mining
techniques make the project very attractive to South Boulder.
These factors coupled with the relatively shallow nature of the
mineralisation could lead to relatively cheap capital and operating
costs if a deposit is defined.
South Boulder intends to complete detailed data compilation and to
undertake diamond drilling, to confirm the reported potash intercepts
and to collect samples for preliminary metallurgical test work.
The drilling is planned to commence in the field season early October.
South Boulder believes the project has the potential to host a world
class potash deposit and is committed to assessing this potential.
South Boulder is in the process of setting up a local branch office in
Asmara including the recruitment of local administration and geological
staff in order to support exploration.
Figure 1 - Official signing ceremony for the Colluli Potash Project,
Eritrea. From left to right,
Yohannes Samuel (STB witness), Lorry Hughes (STB Managing Director),
Ahmed Haj Ali
(Minister of Energy and Mines) and Alem Kibreab (Director General
Department of Mines). Figure 2 - Location of the Colluli Potash Project.
Figure 3 - Colluli Potash Project. Exploration license - yellow
(southern boundary is coincident with Eritrea Border), Colluli Potash
Project drill hole collars - grey dots, Musley Potash deposit drill
collars - yellow dots, local roads - red line, former EPC exploration
areas - red stipple, former Ralph M. Parsons Co. exploration areas -
black stipple, Eritrea Border - blue.
South Boulder originally applied for the license in May 2008 as part of
an open tender process and won the right to negotiate terms for an
exploration license agreement in June 2009.
The minimum expenditure requirements of the license includes USD$500,000
in the first year and on application for a mining license, the Eritrean
government is entitled to a 10% free-carried interest.
The government, after delivery of a Bankable Feasibility Study (BFS),
has the right to purchase an additional 30% equity participation
interest in any mining project and up to a 3.5% royalty on salts.
Data used to form the basis of this report has been sourced from a high
quality detailed summary report of the historic potash exploration and
mining that occurred in the Danakil Depression.
The report was compiled by the former French State owned potash company,
Enterprises Miniere et Chemiques (EMC) in 1982 that has since gone into
administration.
South Boulder is in the process of searching the archives of EMC to
locate the complete set of original drill logs.
The detailed original map of the EMC work with the new Eritrea -
Ethiopia border (as supplied by the Eritrean government) is included in
Figure 4.
On Figures 3 and 4 the extensive work that has been conducted at the
Musley and Crescent potash deposits in Ethiopia are shown.
At Musley an historic resource, which is not JORC compliant (Mengitsu
and Fentaw, 2000) was defined from the historic work conducted by the
Ralph M. Parsons Company from 1958-68.
The resource is now partly owned by Sainik Coal Mining Pvt. and Allana
Resources Inc. (TSX.V AAA). South Boulder is of the opinion that the
Musley deposit is the most analogous deposit to the mineralisation
identified at Colluli and therefore provides South Boulder with a
realistic exploration target elsewhere within the exploration license.
Figure 4 - Colluli Potash Project original summary map from Enterprises
Miniere et Chemiques (EMC -French State owned potash company) from 1982.
About Eritrea
Eritrea gained its independence in 1991 and a United Nations supervised
referendum made it official in 1993. The government is very supportive
of foreign investment in exploration and mining projects.
About South Boulder Mines Ltd
Listed in 2003, South Boulder Mines (ASX: STB) is a diversified explorer
primarily focused on gold, nickel, potash and phosphate.
More information:
Lorry Hughes
Managing Director
South Boulder Mines Ltd
+ 61 (8) 9227 1144
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