Eritrea: South Boulder Mines Extends Prefeasibility Study (PFS) Following Favourable Results

Because of some favorable discoveries and the opportunities associated to reduce capital and operating costs at the Colluli potash project, South Boulder Mines decided to extend extend the PFS to February 2015 but still maintained the Definitive Feasibility Study (DFS) by mid 2015.
Because of the opportunities to reduce capital and operating costs that are associated with recent favorable discoveries at the Colluli potash project, South Boulder Mines decided to extend the PFS to February 2015 while still maintaining the Definitive Feasibility Study (DFS) to mid 2015.

By South Boulder Mines,

SOUTH Boulder Mines (ASX: STB) (“South Boulder” or “Company”) has extended its prefeasibility study (“PFS”) on the Colluli Resource in Eritrea, East Africa, to enable consideration of the impact of the following recent favourable developments: 

  • The Company has completed its preliminary design for the production of potassium sulphate (sulphate of potash) from the Colluli Resource
  • The process utilises all potassium bearing salts in the Colluli Resource which minimises the mining strip ratio. 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
  • The process utilises proven technology and is employed in the major potassium sulphate production centres in Utah, Chile and China
  • The process design currently produces standard and granular potassium sulphate
  • 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

Metallurgical testwork has identified two potential internal configurations of grinding and flotation. Given the implications on capital and operating costs, in the interests of achieving the right foundation work, the PFS delivery will be extended to February 2015. It is envisaged the DFS delivery will not be impacted and is still on track for mid-2015.

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.

Managing Director of South Boulder Mines, Paul Donaldson, said:

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.

“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.”

Mr Donaldson said 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.

General Manager of ENAMCO, Berhane Habtemariam, said;

While we were expecting to have the PFS completed by the end of the year, the Colluli Mining Share Company Board is supportive of exploring the possibility of improving the internal configuration of the processing plant to ensure the appropriate consideration is given to opportunities to reduce capital and operating costs.

THE PROCESS PLANT

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.