South Boulder Mines appoints potash drilling contractor for Colluli
Proactive Investors – South Boulder Mines’ (ASX:STB) shares are expected to once again firm after appointing GED to conduct geotechnical and hydro-geological drilling at its Colluli potash deposit in Eritrea, Africa.
South Boulder and the Eritrean National Mining Company (ENAMCO) are equal shareholders of the Colluli Mining Share Company (CMSC) which will develop the Colluli Potash project.
The good news has been flowing for South Boulder of late, and just last week the company attracted A$1.8 million in investment from the Hong Kong based Kam Lung Investment Development Company.
GED will also conduct twinning of a number of resource holes as part of the transfer of the resource model from Ercosplan to AMC Consultants.
Mobilisation is expected within two weeks and drilling is to commence within three weeks.
Information collected will be applied to pre-feasibility and feasibility work and used to determine earthworks requirements for key pieces of infrastructure, dewatering, pit wall angles, and characteristics for solar pond construction.
GED conducted the original resource drilling at Colluli and is not only familiar with the operating environment and resource, but also has a camp set up on site from the previous campaign which will reduce the execution timeframe.
Paul Donaldson, managing director, commented: “Following a competitive bidding process, we are pleased to be engaging GED to conduct this body of work.
“GED conducted the original resource drilling at Colluli and is not only familiar with the operating environment and resource, but also has a camp set up on site from the previous campaign which will reduce the execution timeframe.”
Investment from Hong Kong
The placement last week also delivered South Boulder a strategic investor who is on the lookout for a binding offtake agreement.
The deal also gives KLID the option to buy an additional 8 million shares, exercisable at $0.35 cents upon securing a binding offtake deal for potassium sulphate on commercial terms acceptable to the CMSC board.
This agreement is in effect for a period of 6 months from the date that the current Pre-Feasibility results are released to the market.
The placement injects more funds into the company and adds to the $9 million cash balance at the end of June 2014, and will support the completion of the Pre-Feasibility Study.
Pre-Feasibility work advancing
South Boulder said that the Pre-Feasibility study work has been progressing well since the variations made to the development strategy to consider the process of all potassium bearing salts in the resource.
The company considers that the unique composition of the resource, its close proximity to the coast, and shallow mineralisation (which commences at only 16 metres) are key strategic advantages for the economics of the project.
Colluli, one of the world’s shallowest potash deposits
Colluli is located just 65 kilometres from the coast and covers 500 square kilometres, and boasts a JORC Mineral Resource Estimate of 1.08 billion tonnes at 18% potassium chloride for 194Mt of contained potash.
Project upside exists in higher production capacity and market development for other contained products, and Engineering Scoping Study results were favourable, proving that an economic 2Mt per annum potash mine can be built at low cost.
Colluli is one of the world’s shallowest potash deposits, starting at 16 metres below surface, and start-up capital costs are the lowest in the industry.
Couple this with cheap expansion capability via open pit mining methods and easy access infrastructure, and it becomes even more attractive, ensuring South Boulder attracts investment interest for the long term.
South Boulder is working steadily towards developing the world’s first, modern, open pit potash mine.
The drilling will form an important component of both the Pre-Feasibility and Feasibility Studies.
While the studies appear to have made significant progress, the recent placement to the Hong Kong based Kam Lung Investment Development Company ensures that work can continue seamlessly through to DFS completion in 2015.