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South Boulder Mines Director Resigns, Foreshadows Shift In Strategy At Colluli

South Boulder Mines (ASX: STB) has advised of a change to its board of directors which could foreshadow a fundamental shift in the development strategy of its Colluli potash project in Eritrea.

Dr. Chris Gilchrist has resigned as a non-executive Director of the Company to pursue other interests.

The original development path for the project focussed on processing sylvinite only, but work completed by South Boulder Mines in February this year demonstrated a material reduction in mine operating costs by processing all potassium bearing salts.

Cost reductions in the order of $50 per tonne of product relative to their staged development model economics have been estimated.

South Boulder Mines has been open about processing the kainite in the deposit and the fact that the resource is capable of producing potassium chloride and/or potassium sulphate.

Potassium sulphate is a premium potash fertiliser (commonly referred to as sulphate of potash) and currently carries a substantial premium (over $250 per tonne) relative to the more common potassium chloride potash.

Perhaps this signals the shift in South Boulder Mines' thinking on how to develop the resource and the increased focus on potassium sulphate.

Dr. Gilchrist's background appears more closely aligned to sylvinite processing and potassium chloride production.

Dr. Gilchrist joined the South Boulder board three years ago and has overseen the feasibility study on the company's Colluli potash project.

South Boulder Chairman Seamus Cornelius thanked Dr. Gilchrist for his contribution to the company.

"Chris has made an important contribution to STB over the past 3 years and we wish him all the best with his future endeavours," Mr. Cornelius said.

Interestingly, South Boulder Mines have recently indicated that it planned to commence a metallurgical test program to design a process that would process all salts and perhaps they intend to engage a potash consultant with more relevant experience as part of this process.

Milestones for testwork

Once the processing testwork is underway, South Boulder Mines will look to appoint an environmental consultant to facilitate the baseline assessment submissions to the Environment Ministry in Eritrea, initiate material characterisation testwork to support the completion of mining work to DFS level and resume work on costing the infrastructure.

South Boulder Mines will be looking at defining the rock salt resource at Colluli.

There is an abundance of rock salt sitting on top of the potash and the initial quality appears good.

This rock salt will be removed as part of the open cut mine, hence they will to define a resource and also look for joint venture partners that would like to participate in a rock salt business once the grades and volumes are established.

One of the advantages of the new product suite under consideration for Colluli is that potassium sulphate is produced.

It is currently selling at an FOB price in the order of $580 to $600 per tonne and given the restricted number of production centres for this product, the price is not likely to drop as severely as in the case of potassium chloride.

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