This comes after Duketon Mining presents a priority offer for South Boulder Mines shareholders to participate in an Initial Public Offering (IPO) of shares in Duketon Mining, which will target gold-nickel in Western Australia.
SOUTH Boulder Mines’ (ASX:STB) chief executive officer Paul Donaldson has spoken with Proactive Investors to set the record straight on a number of misconceptions contained in a recent media report.
South Boulder is a 50% shareholder of the Colluli Mining Share Company (CMSC), a joint venture between South Boulder Mines Ltd and the Eritrean National Mining Company (ENAMCO).
South Boulder is currently working on the Feasibility Study to support the development of the project.
Paul, can you please outline the South Boulder joint venture relationship to the Eritrean government?
South Boulder Mines and the Eritrean National Mining Company (ENAMCO) are equal shareholders of the Colluli Mining Share Company (CMSC) which will develop the Colluli Potash project.
The joint venture company (CMSC) will seek to borrow 70% of the capital required for the first phase of the development.
South Boulder will contribute the remaining amount and will be preferentially paid back 50% of the contribution from project cash flows after third party debt payments.
Following first production, CMSC will seek to borrow funding or develop the project from cash flows.
How supportive have ENAMCO been in progressing studies on the project?
The Colluli Mining Share Company is now holding regular board meetings and focusing on the development of the project.
ENAMCO have been very supportive in progressing the project and have recently allocated a coastal area in close proximity to the resource for the future development of shiploading facilities.
How does the Colluli project differentiate itself from peers?
Colluli is the shallowest known potash deposit globally. This provides a significant advantage in the area of capital intensity. The resource is large, and in close proximity to both the coast and existing in country import/export facilities.
The scale of the resource, and the lower capital intensity make it ideal to develop in a modular fashion to mitigate safety, resource and capital risks – very few potash deposits have this advantage.
The three potassium bearing salts in the resource can be combined to produce potassium sulphate which is the focus of the current work.
If successful, this will make Colluli one of the most significant sources of potassium sulphate globally.