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From: Biniam Tekle (biniamt@dehai.org)
Date: Mon Jul 25 2011 - 22:30:08 EDT
http://www.proactiveinvestors.com.au/companies/news/18120/south-boulder-mines-near-surface-potash-hits-continue-unabated-at-colluli-18120.html
South Boulder Mines near surface potash hits continue unabated at
ColluliTuesday, July 26, 2011 by John
Phillips <http://www.proactiveinvestors.com.au/about_us>
[image: South Boulder Mines near surface potash hits continue unabated at
Colluli]
South Boulder Mines (ASX:
STB<http://www.proactiveinvestors.com.au/companies/sponsors_landing/1142/south-boulder-mines-1142.html>)
string of high grade near surface potash discoveries continues at the
Colluli Potash Project in Eritrea.
The significance of the latest hits at Area B is the confirmation by the
company of the current exploration target of 1.25 to 1.75 billion tonnes at
18-20% KCl.
South Boulder said exploration at the Area B discovery continues to
intersect potash from depths as shallow as 16 metres, with assays currently
pending from the new discovery area - however, sylvinite has been visually
identified in core from 13 of 21 holes drilled to date.
New results that have been received include:
- 8.07 metres of kainitite from 16.51 metres;
- 7.56 metres of kainitite from 48.44 metres;
- 6.54 metres of kainitite from 74.15 metres; and
- 5.58 metres of sylvinite from 65.59 metres.
At the project the current JORC Resource is 548 million tonnes at 18.6% KCl,
for total contained potash of 102 million tonnes.
South Boulder has an initial strategy to consider producing 2 to 10 million
tonnes of potash annually from an open pit operation in 2016/2017, which is
a substantial target considering the current global production is 55 million
tonnes.
The company also has the potential to be the lowest cap-ex and op-ex
operation in the world, with industry production costs around USD$100 to
USD$250 per tonne, compared to the potash price of around USD$500 a tonne.
South Boulder has forecast operating costs to be in lower 25% of the
industry.
*Eritrea - an east African country*
Eritrea is a stable jurisdiction that is fully supportive of South Boulder
activities, with the project awarded to the company by an open tender
process.
The deal structure is as follows:
- Exploration Phase, South Boulder 100% ownership;
- After Mining Lease and BFS, the Government receives 10% of the project for
free and can purchase up to another 30% of the project at fair value;
- The 40% is a full equity participation interest, Government to pay 40% of
operating and capital costs;
- 3.5% royalty on potash and corporate tax rate of 38%; and
- The deal structure paves the way for a secure and reliable partnership.
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