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South Boulder Mines (ASX:STB) announced the completion of an independent review of the financial model which will be used to assess the financial viability of the Pre-Feasibility Study for the Colluli Project in Eritrea, East Africa. A reconciliation of cash flows was conducted against key provisions of the Colluli Mining Company Shareholders’ Agreement, as well as a review of tax and depreciation against operating jurisdiction completed. The Pre-feasibility study is on track for completion in February.
As quoted in the press release:
Highlights:
- Independent review conducted on Colluli financial model
- Reconciliation of cash flows conducted against key provisions of the Colluli Mining Company Shareholders’ Agreement
- Review of tax and depreciation against operating jurisdiction completed
- Model logic and arithmetic accuracy assessed and verified
- Pre-feasibility study on track for completion in February
South Boulder Mines (ASX: STB) (“South Boulder” or “the Company”) is pleased to advise the completion of an independent review of the financial model which will be used to assess the financial viability of the Pre-Feasibility Study (PFS) for the Colluli Project in Eritrea, East Africa
The review was undertaken by a “Big 4” accounting and audit firm (“The Reviewer”). The scope of the review examined:
1. The logical integrity and arithmetic accuracy;
2. The appropriateness in reference to Eritrean Tax Law; and
3. The agreement with key provisions of the Joint Venture agreement between STB and Eritrean National Mining Company (“ENAMCO”).
The overall economic viability of the Colluli Potash Project will be evaluated using simple cash flow techniques through the financial model.
Estimates, received for all the individual elements of cash revenue and cash expenditures, will be combined with initial development and construction of the Project. The model treats estimates as cash flows and provides an economic outcome in the form of Net Present Value (“NPV”) and Internal Rate of Return (“IRR”).
South Boulder Managing Director, Paul Donaldson, said:
Completion of this review is another important step in our PFS. Our process, underpinned by extensive and rigorous work and, where possible, validated by external experts, improves confidence that our plan for the development of Colluli is robust. We are pleased that we have been able to complete this review on time and without material error, well ahead of the PFS completion. This is critical to ensure accurate upcoming reporting of results.”
Click here to read the South Boulder Mines (ASX:STB) press release