http://www.proactiveinvestors.co.uk/companies/news/71828/south-boulder-mines-extends-colluli-pfs-after-favourable-results-71828.html
South Boulder Mines extends Colluli PFS after favourable results
By Proactive InvestorsSeptember 02 2014, 12:25pm
South Boulder Mines (ASX:STB) has extended the Pre-Feasibility Study (PFS)
for its Colluli Resourcein Eritrea to include recent developments that have
favourable implications on capital and operating costs.
Scoping studies completed in February 2014 demonstrated mining cost
reductions of over A$50 per tonne of productrelative to the staged
development model by using all potassium bearing salts in the resource.
Delivery of the PFS is now expected in February 2015, and it will not
impact delivery of the Definitive Feasibility Study in mid-2015.
The company has completed its preliminary design for the production of
potassium sulphate (sulphate of potash) from the Colluli Resource.
There is a substantial price premium in producing potassium sulphate over
potassium chloride, and is the best and most value accretive development
option for the resource.
The process utilises proven technology and is employed in the major
potassium sulphate production centres in Utah, Chile and China, and
produces a standard and granular potassium sulphate.
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.
PFS and DFS in parallel
The project team has been running PFS and DFS workstreams in parallel, and
is well placed to complete many of the other workstreams while the
processing plant configuration is refined.
South Boulder had late last month also commenced a program of mine and
infrastructure geotechnical drilling, hydrological testing and dewatering
drilling at Colluli.
This will 'twin' a number of the previously drilled resource holes as part
of the transfer of the resource model from the Ercosplan to AMC Consultants.
“While we had initially planned to release the results of the
prefeasibility study by the end of 2014, we feel the process we are looking
to adopt and the favourable implications on capital and operating costs are
significant and need to be investigated more thoroughly,” managing director
Paul Donaldson said.
“We feel that it is fundamentally important to get the groundwork right and
therefore we have extended the release of the PFS results until February
2015.”
He added the process would provide the lowest energy input, highest
potassium yield for the production of potassium sulphate.
“The process design ticks all the boxes so far – it uses all salts in the
resource, it takes advantage of the resource composition to produce a
premium potassium sulphate product, it maximises recovery by taking
advantage of the ambient conditions for the evaporation recovery ponds and
it is proven technology used in existing operations.
“The key difference between Colluli and the key sulphate of potash
producers is that Colluli starts with the raw materials in salt form rather
than brine which must first be converted to salts.
“This gives a substantial advantage in reducing the plant’s energy
footprint and completely eliminating the evaporation step to produce the
feed salts.”
Production Process
South Boulder’s preliminary design for the production of potassium sulphate
uses all potassium bearing salts in the Colluli Resource, which minimises
the mining strip ratio.
Notably, the process utilises proven technology and is employed in the
major potassium sulphate production centres in Utah, Chile and China.
This produces both standard and granular potassium sulphate.
The process plant removes sodium chloride from the upper and lower layer
salts using conventional flotation, and then combines the resulting
products (potassium chloride and schoenite) which react under ambient
conditions to form potassium sulphate.
Recovery of potassium is improved by capturing the process brines and
evaporating them to precipitate potassium bearing salts which are fed back
to the processing plant.
Given the substantial price premium of potassium sulphate over potassium
chloride, and the simple processing that is required to combine the upper
and lower salts of Colluli, this is the best and most value accretive
development option for the resource.
Colluli's world-class resource
The Colluli resource is a unique combination of potassium bearing salts
suitable for the production of potassium fertilisers with a total resource
of 1,080Mt at 18.0% KCl or 11.35% K2O.
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.
Colluli is located in the Danakil Depression region of Eritrea about 65
kilometres from the coast.
It is the world’s shallowest potash deposit – starting at 16 metres,
facilitating the low capex open pit mining and favourably positioned to
supply the world’s fastest growing markets.
Analysis
South Boulder has extended its PFS on the Colluli Resource to enable
consideration of the impact of the recent favourable developments.
Scoping studies completed in February 2014 demonstrated mining cost
reductions of over A$50 per tonne of product relative to the staged
development model by using all potassium bearing salts in the resource.
Given the capital and operating cost benefits that South Boulder Mines’
process to produce potassium sulphate from its Colluli Resource will bring,
the extension of the PFS until February 2015 to get the groundwork right is
a step in the right direction.
Notably, this will not impact on the Definitive Feasibility Study, which
remains on track for delivery in mid-2015.
South Boulder is well-funded with $9 million in cash at the end of June
2014, and also recently attracted a $1.8 million investment from the Hong
Kong based Kam Lung Investment Development Company (KLID) at a premium.
KLID will look to secure an offtake deal for potassium sulphate on
commercial terms acceptable to the CMSC board.
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Received on Tue Sep 02 2014 - 22:05:44 EDT