THE BOURSE WHISPERER: South Boulder Mines has announced an updated JORC Code / NI43-101-compliant Mineral Resource Estimate for the company’s Colluli potash project in the African nation of Eritrea.
The resource at the Colluli project now stands at 1.08 billion tonnes at 18 per cent potassium oxide for 194 million tonnes of contained potash.
The company said the new figure represents an 85 per cent increase in contained potash at the project with mineralisation starting from just 16 metres below surface.
Colluli Project JORC/43-101-compliant Mineral Resource Estimate plan. Source: Company announcement
South Boulder said the expanded resource is expected to improve what it described as, “the already robust economics of an open pit mine at Colluli”.
The company’s confidence stems from the shallowness of the deposit, which is open in many directions.
South Boulder is currently carrying out resource extension at Colluli and expects this will enhance the robust nature of the project.
The company has an engineering scoping study (ESS) completed in November 2011, which demonstrated a pre-tax Net Profit Value of US$1.33 billion with start-up capital costs of US$0.74 billion.
“This upgrade further confirms Colluli as a Tier 1 asset,” South Boulder Mines managing director Lorry Hughes said in the company’s announcement to the Australian Securities Exchange.
“The 17-year mine life indicated in the scoping study will definitely be extended.
“In addition, the scoping study didn’t consider substantial production increases that are apparent from this huge resource.
“Over the course of the definitive feasibility study, the upside will be included to demonstrate the significance of Colluli in relation to the global potash market.”
The Colluli project is located approximately 70km from a proposed export site at Anfile Bay on the Red Sea coast and proximal to major international shipping routes.
South Boulder Mines said it has commenced negotiations with the Government of Eritrea for its purchase of a paid participating interest in the Colluli project, which is the precursor to the formation of the Joint Venture Share Company and the ultimate granted Mining Exploitation License.