South Boulder Mines' (ASX:STB) share price has climbed 27.8%, following news last quarter of a binding term sheet signed with the Eritrean National Mining Corporation and its participation in the development of the Colluli Potash Project.
Cashed up with $14.3 million at quarter-end, the agreement is considered pivotal and a milestone in the development of the Project as it provides a basis for strategic investors to evaluate an investment.
The key terms of the agreement are that ENAMCO and STB will each hold a 50% ownership interest in the Project through a newly formed company, Colluli Mining Share Company.
It is envisaged that Project Development Costs for initial development will be funded 70% by debt and 30% by equity.
A Definitive Feasibility Study continued during the quarter with studies underway into processing a mixed feed of sylvinite, carnallite and kainite, which has the potential to improve the financial returns from the Colluli Project.
During the Quarter, the Company received assays for grade control holes and resource extension holes targeting sylvinite, carnallite and kainite mineralisation (see Figure 1). The assays returned high-grade and shallow potash mineralization.
Drilling will wind down at the project as there is sufficient results for the Feasibility Study.
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