SOUTH Boulder Mines’ (ASX:STB) should open high today after its June 2014 quarterly report showed that the company is by no means standing still.
In fact it is quite the opposite – with a large amount of ground having been covered in a short period of time.
South Boulder and the Eritrean National Mining Company (ENAMCO) are equal shareholders of the Colluli Mining Share Company (CMSC) which will develop the Colluli Potash project.
Since announcing positive results from scoping work completed in late 2013 which considered processing all potassium bearing salts, South Boulder has reinvigorated its project with a ramp up of activity – particularly in the last quarter.
The list of activity includes:
1. The transport corridor and Anfile bay export area have been approved – demonstrating the partnership between South Boulder and the Eritrean National Mining Company (ENAMCO) is working well;
2. A new study manager has been appointed, along with key personnel for mine planning, geotechnical work, environmental and processing;
3. Metallurgical testing including evaporation and brine tests appear to be well underway;
4. Process flow diagrams have been completed; and
5. South Boulder has reaffirmed that it is pursuing Potassium Sulphate as the process product in contrast with the original development which focussed on Potassium Chloride.
The company have also given some indication of what is to come in the upcoming quarter.
The organisation has indicated that it is close to finalising the overall process and has been consistent in emphasising the importance of the potassium bearing salt, kainite in the production of potassium sulphate.
The Colluli Potash Project
The Colluli resource is a unique combination of potassium bearing salts suitable for the production of potassium fertilisers.
It hosts 1 billion tonnes of potassium salts and has a current JORC Compliant Measured, Indicated and Inferred Resource.
This is 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.
The total is 1,080 Mt at 18.0% KCl or 11.35% K2O (total contained potash of 194.09Mt KCl or 122.61Mt K2O).
Mining Costs Significantly Decreased
Already giving positive indication on the mining costs, which according to previous announcements have decreased by over $100 per tonne of product by including all salts, the production of potassium sulphate, also known as SOP has a significant potential benefit on revenue given its current $300 per tonne premium over potassium chloride.
In addition to striking a number of key milestones, the company has also changed its board composition with Dr. Chris Gilchrist, the original project coordinator and experienced potassium chloride operator stepping down from the board and Global Potash Solutions stepping in to provide guiding input on the revised strategy.