http://www.miningweekly.com/article/company-announcement-more-shallow-high-grade-potash-found-at-colluli-2012-04-23
23rd April 2012
South Boulder Mines Ltd 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.
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. “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 _at_ 18-20% KCl ## (Table 1; see ASX announcement dated 16th of April 2012).
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Received on Mon Apr 23 2012 - 10:09:36 EDT
