By Mining Weekly,
POTASH developer South Boulder Mines was hoping to raise some A$6-million through a share placement and rights issue to fund the completion of its definitive feasibility study for the Colluli potash project, in Eritrea.
South Boulder on Tuesday announced that it would place about 10.97-million shares, at a price of 25c each, to raise an initial A$2.74-million. The placement was made to Hong Kong – and London-based investors.
In conjunction with the share placement, South Boulder also announced a one-for-12 non-renounceable rights issue, also priced at 25c each, to raise a further A$3.35-million.
“The key priorities for the Colluli potash project are the completion of a quality definitive feasibility study, advancement of funding discussions, and ensuring sufficient in-house capability to advance the project,” said South Boulder MD Paul Donaldson.
“The recently completed prefeasibility study (PFS) demonstrated a robust project, with attractive economics and a positive future.”
The PFS examined a two-module development with an expected production of 425 000 t/y sulphate potash for the first five years of operation, increasing to 850 000 t/y for the remainder of the proposed 30-year mine life.
The project was estimated to require a capital investment of $442-million.
“The capital raising will provide sufficient funds to not only deliver a high-quality definitive feasibility study later this year, but advance the development path towards production in the areas of processing, technical, marketing and project funding,” said Donaldson.
“This is consistent with our objective of developing the Colluli project as efficiently and safely as possible alongside our partner in Eritrea.”
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South Boulder Mines Attracts Hong Kong and London Investors
By Proactive Investors,
SOUTH Boulder Mines (ASX:STB) will raise up to $6 million through a placement and rights issue priced at $0.25 for the Colluli potash project in Eritrea, East Africa.
The placement will issue 10.974 million shares to Well Efficient Limited of Hong Kong and Arlington Group Asset Management (AGAM) of London.
The 1 for 12 non-renounceable pro-rata rights issue will raise up to $3.35 million, and is underwritten for $2.5 million by Montezuma Mining Company (ASX:MZM) and RSR Premier Holdings, a privately held investment vehicle.
Funds will be allocated to:
– Complete the Definitive Feasibility Study for the Colluli Potash Project;
– Build in house capability to support the development of the project;
– Advance funding discussions for the project; and
– Provide working capital.
Colluli is a 50/50 joint venture with the Eritrean National Mining Company (ENAMCO) and is held 100% by the Colluli Mining Share Company with South Boulder and ENAMCO each holding a 50% interest.
ENAMCO is the mining Investment arm of the Eritrean Government.
Paul Donaldson, managing director for South Boulder, commented:
“The key priorities for the Colluli Potash Project are the completion of a quality definitive feasibility study, advancement of funding discussions, and ensuring sufficient in house capability to advance the project.
“The recently completed prefeasibility study demonstrates a robust project, with attractive economics and a positive future.
“The Placement not only introduces another sophisticated international investor, but also shows the continued confidence from existing investor, Well Efficient Limited.”
All South Boulder Directors intend taking up their entitlements to the Rights Issue.
Colluli hosts a JORC Resource of 1,289 million tonnes of open pittable ore containing 260 million tonnes of recoverable Potassium Sulphate or Potash that is also known as (SOP).