SOUTH Boulder Mines (ASX:STB) has formally secured the Anfile Bay area for any purpose associated with the export of saleable products, including premium potassium sulphate fertiliser, from its Colluli Potash Project in Eritrea.
Potassium sulphate currently carries a price premium of approximately $300 per tonne, which could deliver a significant boost to Colluli’s economics.
The Eritrean Ministry of Energy and Mines is making the area available in recognition of the “considerable work undertaken by the company for the completion of pre-feasibility and feasibility studies” on the Colluli project.
It said the decision also acknowledged “the need for certainty with regard to the underlying assumptions for these studies, one of which being the nomination of a suitable product export terminal”.
South Boulder can use Anfile Bay for the purposes of storing, shipping and any other export related activity.
The use of Anfile Bay is conditional on completion of the environmental and social impact studies which are currently underway and their approval by the relevant government authorities upon completion.
Any negative impacts associated with the use of the area by the project would have to be avoided or mitigated under approved management plans.
Managing director Paul Donaldson said the allocation of Anfile Bay demonstrates the value of the joint venture partnership with the Eritrean National Mining Company in developing the Colluli project.
He added the company is now focused on completing metallurgical testwork to confirm the three types of potassium bearing mineralisation in the resource can be simultaneously processed into potash.
“We are confident that the project’s ability to produce the premium-priced potassium sulphate will further strengthen Colluli’s economics,” he added.
Results from the testwork along with the technical and economic implications of Anfile Bay, will form part of the pre-feasibility study due for completion towards the end of this year.
Colluli Potash Project
Colluli hosts a large combined Resource of 1.08 billion tonnes at 18% KCl for 194 million tonnes of contained potash that promises a long mine life of more than 200 years.
This includes a Measured Resource of 261 million tonnes at 17.94% KCI.
The project is located in the Danakil Depression region of Eritrea, and is just 65 kilometres from the coast comprising around 400 square kilometres. It is one of the closest potash resources to the coast globally.
It is positioned favourably relative to the key growth markets for potassium fertiliser – primarily India and China.
South Boulder Mines had $9 million in cash as of 1 June 2014.