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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