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The total mineral resource estimate comes to 1.289 billion tonnes at an average grade of 10.76 percent K2O. According to Managing Director Paul Donaldson, that makes Colluli “one of the largest potassium sulphate resources globally.”
Western Australia-based South Boulder Mines (ASX:STB) hit a milestone on Wednesday with the release of a JORC 2012 mineral resource estimate for the Eritrea-based Colluli potash project. It holds a 50-percent interest in the project via a joint venture with Eritrean National Mining Company.
The total mineral resource estimate comes to 1.289 billion tonnes at an average grade of 10.76 percent K2O, and according to Managing Director Paul Donaldson, that makes Colluli “one of the largest potassium sulphate resources globally.” He added, “[t]here is no question about the size and potential of the Colluli resource. It will form the backbone of what will become a significant project in the future.”
Colluli’s overall mineral resource estimate breaks down into a measured mineral resource of 303 million tonnes at 10.98 percent K20, an indicated mineral resource of 951 million tonnes at 10.89 percent K20 and an inferred mineral resource of 35 million tonnes at 10.28 percent K20.
The company notes that the mineral resource estimate was derived from data gathered during an initial drilling campaign at Colluli that took place from 2010 to 2012. Further QAQC drilling took place there last year, but it was only used for data validation purposes.
Notably, 97 percent of the mineral resource estimate now sits in the measured and indicated categories, while contained K2SO4, or potassium sulfate, comes to a total of 260 million tonnes. It’s also worth noting that Colluli is the world’s shallowest potash deposit, with mineralization starting at just 16 meters — South Boulder believes that makes it amenable to open-pit mining, which should allow for higher resource recovery and increased safety.
In terms of what’s next for South Boulder, Wednesday’s release states that a prefeasibility study for potassium sulfate production is on track for release this month. A shareholder update released on February 23 provides a picture of the company’s longer-term goals, noting that a definitive/bankable feasibility study is due out in Q3 of this year. A work program for the two studies was started in April 2014, and South Boulder Chairman Seamus Cornelius notes in the update that it has substantially increased not only the company’s knowledge of the deposit, but also its understanding of “how it should be developed to generate maximum benefit for stakeholders.”
Looking even further into the future, Colluli is expected to produce potassium-bearing salts in solid form; they’ll be used for the production of potassium sulfate, as well as potash of magnesia, which the company says have “limited primary production globally due to resource scarcity.”
In the meantime, investors will no doubt be keeping an eye out for South Boulder’s prefeasibility study. If it’s coming out in February as the company has said, then it should be released by the end of this week.
At close of day Wednesday, South Boulder’s share price was sitting flat at AU$0.26.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.