South Boulder Mines (ASX: STB) continues to deliver a string of high grade potash hits from the Colluli Potash Project in Eritrea.
The importance of the first “partial hole assays” returned from upper mineralised zones in 9 holes have confirmed Area B as a significant addition to the Colluli Potash Project, with the results continuing to support the project Exploration Target of 1.25 to 1.75 billion tonnes at 18-20% KCl.
The impact from the latest high grade hits at Area B is that they provide a significant addition to the Colluli Potash Project, and continue to support the current Exploration Target of 1.25 to 1.75 billion tonnes at 18-20% KCl
The latest highlights include:
– 1.72 metres of sylvinite at 39.69% KCl from 50.28 metres;
– 5.58 metres of sylvinite at 31.47% KCl from 65.59 metres;
– 2.96 metres of sylvinite at 29.85% KCl from 86.06 metres; and
– 2.04 metres of sylvinite at 27.63% KCl from 33.63 metres.
South Boulder said that the continuous zones containing sylvinite, carnallite / kieserite and kainitite mineralisation have been identified in 18 of 22 holes drilled at Area B to date.
Boosting the potential of the project even further is that the holes are open in all directions.
The Colluli current JORC Resource is 548 million tonnes at 18.6% KCl, for total contained potash of 102 million tonnes.
Anticipation builds for pending assays
The latest high grade intersections at Colluli have increased the anticipation for the remainder of the assays from these holes, which will be delivered in the coming months.
These results will then form part of the ongoing JORC Resource updates for the project.
Exploration and development activity is currently focused on resource compilation for the September update, downhole geophysical logging, metallurgical testwork, mining engineering and hydrogeological assessment to support Definitive Feasibility Studies.
South Boulder indicated in the June quarterly that an engineering Scoping Study into the low cost production of 1-2mt of potash by 2016 or sooner will be complete in the September quarter.
Eritrea – an east African country
Eritrea is a stable jurisdiction that is fully supportive of South Boulder activities, with the project awarded to the company by an open tender process.
The deal structure is as follows:
– Exploration Phase, South Boulder 100% ownership;
– After Mining Lease and BFS, the Government receives 10% of the project for free and can purchase up to another 30% of the project at fair value;
– The 40% is a full equity participation interest, Government to pay 40% of operating and capital costs;
– 3.5% royalty on potash and corporate tax rate of 38%; and
– The deal structure paves the way for a secure and reliable partnership.