14 May 2012
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http://www.southbouldermines.com.au/files/Metallurgical-Drilling-Commences-At-Colluli-Potash-Projects.pdf
ASX Release 14th May 2012
Metallurgical Drilling Commences at Colluli
Potash Project
Program will help underpin maiden reserve as part of
Feasibility Study
South Boulder Mines Ltd (ASX: STB) is pleased to advise that it has commenced a
new program of metallurgical drilling at its flagship Colluli Potash Project in
Eritrea in another key step towards completion of the Definitive Feasibility Study.
The Feasibility Study is scheduled to be finished next year, ensuring South Boulder
is on track for production at Colluli no later than 2016.
South Boulder will also maintain resource extension drilling as part of its plan to
continue growing the already-extensive inventory at Colluli.
The drilling plan involves up to 34 shallow, large-diameter PQ-diamond holes from
areas adjacent to and within the existing JORC/NI43-101 Compliant Mineral
Resource Estimate (Figure 1) to provide sufficient potash samples in order to
complete the processing testwork component of the DFS.
The program is being conducted concurrently with the ongoing HQ-diamond drilling
resource extension program (see ASX Announcements – 16th & 23rd of April 2012).
In addition to meeting the processing requirements of the DFS, the program aims
to provide:
close-spaced assay data to update resource confidence categories
from Inferred to Indicated and from Indicated to Measured. (The
program is designed to convert all of the resource which will underpin
the first 10 years of mining to the Measured and Indicated categories).
additional technical data to be used in the DFS geological,
geotechnical and ground water models as part of the overall mine
plan;
a better understanding of the geometry of the high-grade sylvinite
zones to allow optimisation of the Stage 1 mine plan involving
continuous mining machinery; and
confirm the strong potential to define additional resources outside the
current resource areas.
The metallurgical processing testwork will be conducted in Germany and managed
by Lead Consultants Ercosplan.
South Boulder Managing Director Lorry Hughes said that, as a result of the
intensive drilling programs being undertaken, the level of confidence in the Colluli
potash resource would be higher than most other potash projects.
“The comprehensive drilling program will allow us to significantly de-risk the project
in terms of our mining plans. Due to the extremely shallow nature of the Colluli
deposit, we are able to establish an exceptionally high degree of confidence in the
resource through relatively cost effective drilling. All other potash developments are
significantly deeper than Colluli and therefore cost prohibitive to complete this type
of work,” Mr Hughes said.
Results will be released as they come to hand.
Corporate Details
ASX Code: STB
Germany: SO3-Fra
OTC/ADR: SBMSY
Share Price: $0.95
Market Cap: $110M
Shares on issue: 116.2M
STB Options: 10.4M ($6.7M)
Cash/NTA: $20.3M
Top 40
shareholders: 65%
Contact Details
31 Ventnor Avenue
West Perth WA 6000
PO Box 970
West Perth WA 6872
Telephone +61 8 6315 1444
Facsimile +61 8 9486 7093
Email & Web Page:
Info_at_southbouldermines.com.au
www.southbouldermines.com.au
Media Enquiries
Nicholas Read or Paul Armstrong -
Read Corporate
Telephone: +61 8 9388 1474
Listed Equity Holdings
(ASX: MZM) 5.382M
(ASX: AVZ) 0.400M
(ASX:LTX) 1.016M
(ASX: BUX) 1.610M
(BUX options) 0.750M
(CDNX: CNI.V) 0.121M
(CDNX: SMP.V): 2.500M
Auvex (Pte): 0.500M
ASX Report 14th May 2012 2
Figure1: Colluli Project JORC/NI43-101 Compliant Mineral Resource Outlines and PQ-Drilling Plan.
Metallurgical Drilling Areas
PQ-001
PQ-002
Priority
Exploration Target
Metallurgical Drilling Areas
ASX Report 14th May 2012 3
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 _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 for a total of 1,079.00Mt _at_ 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 _at_ 28.56% KCl
or 18.04% K2O. The current resource is included in an exploration target of 1.25 – 1.75 billion tonnes _at_ 18-20% KCl ## (see
disclaimer below and ASX Announcement dated 16th of April 2012).
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.
About the Duketon Gold Project and the Duketon Nickel Joint Venture
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.
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 _at_ 0.92% Ni including
37m _at_ 1.05% Ni at C2. The deposits are located 40 - 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.
For Media Enquiries contact Nicholas Read or Paul Armstrong at Read Corporate - Telephone +61 8 9388 1474
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 _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 _at_ 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, which combined with the chemical analysis gives a quantitative mineral composition.
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Received on Mon May 14 2012 - 13:49:40 EDT
