South Boulder Mines' potash processing review reveals new development paths for Colluli
South Boulder Mines (ASX: STB)
should trade firmer following positive results from recently completed
processing studies on its Colluli Potash project in Eritrea.
The original development approach was based on processing sylvinite only to produce a fertiliser product called muriate of potash.
However, sylvinite represents only 16% of the 1 billion tonnes of potassium bearing salts that have so far been defined within the resource; the remainder consists of carnallitite and kainitite.
The stratified nature of the resource means that the recovery of all mineralised material is critical to ensure long term economic robustness of the operation.
As a result of these studies, South Boulder Mines has short listed three development and processing options for Colluli, all of which incorporate all potassium salts in the resource.
New final products would include sulphate of potash, which is a premium fertiliser product, in contrast to the more common muriate.
The breakthrough has important ramifications for project economics, because material that was previously classified as waste is now recoverable, saleable material.
This reduces the strip ratio, lowers operating costs and extends the life of the project.
In addition, recent work at a scoping level pointed to a possible reduction in mining costs from $122 to $70 per tonne.
In light of these findings, South Boulder intends to carry out metallurgical test work to determine the preferred development route for the project, necessary for completion of the Definitive Feasibility Study.
Joint Venture with ENAMCO
South Boulder Mines finalised the Joint Venture Agreement with ENAMCO in November 2013, and is now in the final stages of organising the new Colluli Mining Share Company (CMSC).
South Boulder and ENAMCO will each own 50% of CMSC, and ll of the exploration leases and other assets in Eritrea are in the process of being transferred to the joint venture company.
The joint venture with ENAMCO sets out the legal and commercial terms under which Colluli will be developed, as reported in November 2013.
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