http://www.southbouldermines.com.au/files/120423-Colluli-Exploration-Update.pdf
ASX Release
23rd April 2012
More Shallow High-Grade Potash Found at Colluli
New zone offers strong potential to boost project’s already-robust economics
South Boulder Mines Ltd (ASX:STB) is pleased to announce that recent resource extension diamond drilling has intersected more high-grade shallow potash in between the two existing resource zones at the Colluli Project in Eritrea.
The combination of the shallow nature of this additional mineralisation, its high-grade and its location means it has strong potential to boost Colluli’s economics, particularly in the early phase of the project.
The new zone of mineralisation sits between the existing resource areas A and B (Figure 1). There is clear potential for potash to be largely continuous between the existing resources and this will be further tested with ongoing drilling. Highlights of the recent drilling include;
Hole Col-052 5.09m of high-grade Sylvinite from 100.34m (within a total 15.86m potash interval);
Hole Col-054 6.12m of Sylvinite from 68.34m, including 2.93m of high-grade Sylvinite from 70.17m (within a total 16.12m potash interval);
Hole Col-057 2.93m of high-grade Sylvinite from 88.49m in between Area A and B (within a total 13.34m potash interval);
Hole Col-060 2.02m of high-grade Sylvinite from 53.89m in between Area A and B (within a total 16.17m potash interval).
Shallow Sylvinite mineralisation intersected in the central discovery area is open to the immediate north and south. The average grade of Sylvinite resources contained within the current JORC/NI43-101 Mineral Resource Estimate is 28.56% KCl or 18.04% K2O. (Table 1; see ASX announcement dated 16th of April 2012).
South Boulder Managing Director Lorry Hughes said the new Sylvinite drilling results show excellent correlation with previous drilling and have potential to further improve the economics of the project.
ASX Report 23rd April 2012 2
Tonnes (Mt)Grade (% KCl)Total KCl (Mt)Grade (% K2O) Total K2O (Mt)Measured261.8117.9446.9611.3329.67Indicated674.4817.98121.2911.3676.67Inferred143.5018.0025.7811.3716.33Current April-12 Total Resource1,079.0017.97194.0911.35122.61Previous Oct-11 Total Resource564.4018.60104.9611.7566.31Variance+ 91%-3%+ 85%-3%+ 85%
"The new discovery is likely to make a material improvement to the already-robust Stage 1 production schedule and mining costs of the world’s first open pit potash mine," Mr Hughes said.
"The shallow depth of the resource is the key difference between Colluli and other potash resources currently being mined".
"Most existing mine production is from depths of greater than 500m and to depths of up to 1,500m below surface".
"We expect to convert a large portion of our resources to mineable reserves because we can utilise open pit mining as opposed to low-conversion underground or solution-mining methods".
"The operating and capital cost structures are completely different to all other potash projects in the world and this is a major advantage for Colluli."
An engineering scoping study (ESS) completed in November 2011 demonstrated a highly attractive pre-tax NPV12 of US$1.33 billion with start-up capital costs of US$740 million. The definitive feasibility study is due to be completed in early 2013.
This ESS was based on Stage 1 production of 1Mt of KCl p.a. from the potash mineral Sylvite, a zone which represents only a small part of the overall deposit. The ESS forecasted an initial 17-year open pit operation with an estimated internal rate of return of 40.6%.
As an indication of the growth potential of the Colluli project in addition to the new central discovery, the ESS only included ~16% of the potash contained within the previous October 2011 resource estimate. Studies are currently underway to incorporate additional zones of potassium minerals to further enhance the overall commercial outcomes.
The JORC/NI43-101 Compliant Mineral Resource Estimate is currently 1.08 billion tonnes _at_ 18% KCl for 194Mt of contained potash and contained within an Exploration Target of 1.25 – 1.75 billion tonnes @ 18-20% KCl ## (Table 1; see ASX announcement dated 16th of April 2012).
Table 1: Total JORC/NI43-101 Compliant Mineral Resource Estimate.
*KCl is commonly expressed as K2O according to the formula (KCl * 0.6317 = K2O). The recent KCl contract price is estimated at around US$ 470/t.
A list of new hole collars and mineralisation intersected based on accurate field diagnostic tests are shown in Table 2. A full list of hole collars and results, including assays received and contained within the April 2012 JORC/NI43-101 Mineral Resource Estimate will be compiled within the March 2012 Quarterly Activities Report.
Resource extension, definition and metallurgical drilling is planned to be ongoing with results available as they come to hand.
##JORC Compliance Statement – Exploration Target
The current Mineral Resource Estimate is included in the current exploration target of 1.25 – 1.75 billion tonnes _at_ 18-20% KCl. The potential quantity and grade of the current exploration target is conceptual in nature and there has been insufficient exploration to define a Mineral Resource other than the current Mineral Resource Estimate and it is uncertain if further exploration will result in the determination of a
Mineral Resource Estimate other than the current Mineral Resource Estimate.
ASX Report 23rd April 2012 3
AREA B Resource
AREA A Resource
Col-052
2.78m of Sylvinite from 100.34m
5.09m of High Grade Sylvinite from 103.21m
7.99m of Kainitite from 111.00m.
Col-051
1.30m of Sylvinite from 94.25m
7.87m of Kainitite from 96.36m.
Col-053A & B
Col-054
6.12m of Sylvinite from 68.34m
2.93m of High Grade Sylvinite from 70.17m
3.30m of Carnallite from 75.00m
6.70m of Kainitite from 78.30m.
Col-055
5.42m of Sylvinite with sulphate from 78.69m
1.84m of Carnallite from 84.11m
7.02m of Kainitite from 85.95m.
Col-045
Col-046
Col-059
Col-056
Col-049
Col-048
Col-047
Col-060
2.20m of High Grade Sylvinite from 53.89m
1.31m of Carnallite from 55.91m
4.60m of Carnallite from 61.40m
8.24m of Kainitite from 66.00m.
Col-058
1.30 of Sylvinite from 78.20m
2.26m of Carnallite from 79.50m
4.24m of Carnallite from 84.62m
7.49m of Kainitite from 88.86m.
Col-057
2.93m of High Grade Sylvinite from 88.49m
3.74m of Carnallite from 91.59m
6.67m of Kainitite from 95.33m.
Col-050
3.91m of Sylvinite from 144.36m
4.57m of Carnallite from 148.37m
7.11m of Kainitite from 152.80m.
PQ-001
PQ-002
Priority Exploration Target
Figure1 Colluli Project JORC/NI43-101 Compliant Mineral Resource Estimate and Resource Drilling Plan.
ASX Report 23rd April 2012 4
Hole No.
East (m)
North (m)
RL (m)
Azi. (degr.)
Dip (degr.)
E.O.H.
Status
Comment
PQ-001
644658
1590208
-118
000
-90
85.60
Assays awaited
Area A – Sylvinite, carnallite and kainitite; total thickness ~20.76m from ~31.57m (Resource category upgrade hole + metallurgical samples)
PQ-002
643772
1590934
-119
000
-90
147.00
Assays awaited
Area A – Sylvinite, carnallite and kainitite; total thickness ~20.67m from ~35.45m (Resource category upgrade hole + metallurgical samples)
Col-045
634300
1595879
-122
000
-90
62.50
Hole to be deepened
Area B – No samples taken
Col-046
633350
1594894
-123
000
-90
60.00
Hole to be deepened
Area B – No samples taken
Col-047
637622
1592828
-124
000
-90
138.00
Assays awaited
Area B - Sylvinite, sulphate, kainitite; total thickness of sylvinite and kainitite ~5.68m from ~122.32m, additional 6.07m of potential potash bearing sulphate rock from 125.21 – 131.28m. (Resource extension hole), samples dispatched
Col-048
637343
1593906
-123
000
-90
111.00
Assays awaited
Area B – Sulphate, carnallite, kainitite; total thickness ~6.97m from ~99.78m, additional 12.72m of potential potash bearing sulphate rock from 87.06 – 99.78m. (Resource extension hole), samples dispatched
Col-049
636022
1593912
-123
000
-90
114.00
Assays awaited
Area B – Sylvinite (9.51m), carnallite (0.42m), kainitite (6.42m); total thickness ~16.35m from ~91.22m (Resource extension hole), samples dispatched
Col-050
636911
1592863
-123
000
-90
162
Assays awaited
Area B – Sylvinite, carnallite, kainitite; total thickness ~ 15.59m from 144.36m. (Resource extension hole), samples to be dispatched
Col-051
635161
1594894
-123
000
-90
108
Assays awaited
Area B – Sylvinite, kainitite; total thickness ~ 9.17m from 94.25m. (Resource extension hole), samples to be dispatched
Col-052
635303
1593885
-124
000
-90
120
Assays awaited
Area B – Sylvinite, kainitite; total thickness ~ 15.86m from 100.34m, 5.09m of High Grade Sylvinite from 103.21m. (Resource extension hole), samples to be dispatched
Col-053A
635889
1593089
-124
000
-90
126
Hole abandoned
Area B – abandoned due to drilling difficulties
Col-053B
635863
1593105
-124
000
-90
162
Hole to be deepened
Area B – no significant mineralisation
Col-054
635626
1595386
-122
000
-90
87
Assays awaited
Area B – Sylvinite, carnallite, kainitite; total thickness ~ 16.12m from 68.34m, 2.93m of High Grade Sylvinite from 70.17m . (Resource extension hole), samples to be dispatched
Col-055
637059
1594872
-122
000
-90
96
Assays awaited
Area B – Sylvinite, carnallite, kainitite; total thickness ~ 14.28m from 78.69m. (Resource extension hole), samples to be dispatched
Col-056
637399
1598033
-118
000
-90
30
Hole to be deepened
Area B – Remnant of kainitite; total thickness ~ 1.36m from 15.16m. (Resource extension hole), samples to be dispatched
Col-057
639101
1593907
-121
000
-90
105
Assays awaited
Central – Sylvinite, carnallite, kainitite; total thickness ~ 13.34m from 88.49m, 2.93m of High Grade Sylvinite from 88.49m. (Resource extension hole), samples to be dispatched
Col-058
640107
1593916
-120
000
-90
99
Assays awaited
Central – Sylvinite, carnallite, kainitite; total thickness ~ 15.29m from 78.20m. (Resource extension hole), samples to be dispatched
Col-059
640607
1593916
-119
000
-90
57
Assays awaited
Central – Remnant of kainitite; total thickness ~ 4.16m from 50.16m. (Resource extension hole), samples to be dispatched
Col-060
639828
1594893
-118
000
-90
75
Assays awaited
Central – Sylvinite, carnallite, kainitite; total thickness ~ 16.17m from 53.89m, 2.20m of High Grade Sylvinite from 53.89m. (Resource extension hole), samples to be dispatched
Table 2: Table of recent drill holes not included in the current JORC/NI43-101 Compliant Mineral Resource Estimate.
ASX Report 23rd April 2012 5
Investor Coverage
Recent investor relations, corporate videos and broker/media coverage on The Company’s projects can be viewed on the website in the "Media Centre" and "Investor Centre" sections by following the links www.southbouldermines.com.au and www.abid.co.
About South Boulder Mines Ltd
Listed in 2003, South Boulder Mines (ASX: STB) is a diversified explorer focused on potash, nickel and gold. South Boulder has a 90% interest in the Colluli Potash Project in Eritrea and a 100% interest in the Duketon Gold Project in Western Australia.
The Colluli Potash Project has a current JORC Compliant Measured, Indicated and Inferred Mineral Resource Estimate comprised of 261.81Mt _at_ 17.94% KCl or 11.33% K2O of Measured Resources, 674.48Mt @ 17.98% KCl or 11.36% K2O of Indicated Resources and 143.50Mt @ 18.00% KCl or 11.37% K2O of Inferred Resources for a total of 1,079.00Mt @ 17.97% KCl or 11.35% K2O (total contained potash of 194.09Mt KCl or 122.61Mt K2O); This includes higher grade Sylvinite of 114.60Mt @ 28.56% KCl or 18.04% K2O. The current resource is included in an exploration target of 1.25 – 1.75 billion tonnes @ 18-20% KCl ## (see disclaimer below).
An engineering scoping study for the production of 1Mt p.a. of potash demonstrated an estimated capital cost of US$0.74bn generating a Pre-tax NPV12 of US$1.33bn. A Definitive Feasibility Study into open pit mining and processing of the resource is underway with initial production scheduled for 2016 or sooner. South Boulder has strong support from the Eritrean Government to build a long term, economically and environmentally sustainable resource project.
Within the Duketon Gold Project area, South Boulder entered a farm-out Joint Venture (JV) Agreement with Independence Group NL, whereby Independence can earn a 70% interest in the nickel rights on select tenements held by South Boulder in the Duketon Project, by the completion of a Bankable Feasibility Study within 5 years of the grant of the relevant tenement.
About the Duketon Nickel Joint Venture
The Duketon Nickel Joint Venture (DNJV) has had recent success at The Rosie and C2 Nickel sulphide prospects where drilling has defined intercepts of 5.20m _at_ 9.2% Ni, 1.09% Cu, 0.21% Co and 7.09g/t PGE’s at Rosie and 50m @ 0.92% Ni including 37m @ 1.05% Ni at C2. The deposits are located approximately 120km NNW of Laverton, W.A in the Duketon Greenstone Belt. The deposits are approximately 2km apart and the mineralisation at both prospects is considered open in most directions. A Mining Lease was granted over the Rosie and C2 deposits on the 19th of November. A Maiden JORC Compliant Mineral Resource Estimate has been compiled for the Rosie deposit; please refer to the Company’s 25th January 2012 ASX Announcement for details.
More information:
Email: info_at_southbouldermines.com.au | South Boulder Mines Limited – Telephone +61 8 6315 1444
Lorry Hughes Kerry Rudd Liam Cornelius Flavio Garofalo Dr. Chris Gilchrist
CEO/Managing Director Executive Assistant Executive Director CFO Non-Exec Director
## Competent Persons and Responsibility Statement
The Colluli Potash Project has a current JORC/NI43-101 Compliant Measured, Indicated and Inferred Mineral Resource Estimate of 1,079.00Mt _at_ 17.97% KCl or 11.35% K2O (total contained potash of 194.09Mt KCl or 122.61Mt K2O). The resource contains 261.81Mt @ 17.94% KCl or 11.33% K2O of Measured Resources, 674.48Mt @ 17.98% KCl or 11.36% K2O of Indicated Resources and 143.50Mt @ 18.00% KCl or 11.37% K2O of Inferred Resources. The current Mineral Resource Estimate is included in the current exploration target of 1.25 – 1.75 billion tonnes @ 18-20% KCl. The potential quantity and grade of the total current exploration target which includes the current Mineral Resource Estimate is conceptual in nature and there has been insufficient exploration to define a Mineral Resource other than the current Mineral Resource Estimate and it is uncertain if further exploration will result in the determination of a Mineral Resource Estimate other than the current Mineral Resource Estimate.
This ASX release has been compiled by Lorry Hughes using information on exploration results and Mineral Resource estimates supplied by South Boulder Mines Ltd under supervision by Ercosplan. Dr Henry Rauche and Dr Sebastiaan van der Klauw are co-authors of the JORC and NI43-101 compliant resource report. Lorry Hughes is a member in good standing of the Australian Institute of Mining and Metallurgy and Dr.s’ Rauche and van der Klauw are members in good standing of the European Federation of Geologists (EurGeol) which is a "Recognised Overseas Professional Organisation" (ROPO). A ROPO is an accredited organisation to which Competent Persons must belong for the purpose of preparing reports on Exploration Results, Mineral Resources and Ore Reserves for submission to the ASX.
Mr Hughes, Mr Rauche and Mr Van Der Klauw are geologists and they have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the "Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Hughes, Mr Rauche and Mr van der Klauw consent to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Quality Control and Quality Assurance
South Boulder Exploration programs follow standard operating and quality assurance procedures to ensure that all sampling techniques and sample results meet international reporting standards. Drill holes are located using GPS coordinates using WGS84 Datum, all mineralisation intervals are downhole and are true width intervals. Assay values are shown above a cut-off of 6% K2O. The samples are derived from HQ diamond drill core which in the case of carnallite ores are sealed in heat sealed plastic tubing immediately as it is drilled to preserve the sample. Significant sample intervals are dry quarter cut using a diamond saw and then resealed and double bagged for transport to the laboratory. Halite blanks and duplicate samples are submitted with each hole. Chemical analyses were conducted by Kali-Umwelttechnik GmBH Sondershausen, Germany utilising flame emission spectrometry, atomic absorption spectroscopy and ionchromatography. Kali-Umwelttechnik (KUTEC) Sondershausen1 have extensive experience in analysis of salt rock and brine samples and is certified according by DIN EN ISO/IEC 17025 by the Deutsche Akkreditierungssystem Prüfwesen GmbH (DAR). The laboratory follow standard procedures for the analysis of potash salt rocks •chemical analysis (K+, Na+, Mg2+, Ca2+, Cl-, SO42-, H2O) and •X-ray diffraction (XRD) analysis of the same samples as for chemical analysis to determine a qualitative mineral composition, which combined with the chemical analysis gives a quantitative mineral composition.
----[Mailing List for Eritrea Related News ]----
Received on Mon Apr 23 2012 - 10:05:06 EDT
