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South Boulder Mines Closes In On Definitive Feasibility Study At Colluli

South Boulder Mines (ASX: STB) is nearing the start of a Definitive Feasibility Study at the Colluli Potash Project in Eritrea with the appointment of key consultants to drive the study.

The DFS, which is scheduled for completion in 2013, will include detailed studies of geology, engineering, metallurgy and infrastructure.

A stage one Engineering Scoping Study has determined a robust internal rate of return of 40.6% for a 1 million tonne per annum operation over a 17-year life. The stage one study considered muriate of potash production from Sylvite mineralisation only.

The DFS will also consider stage two production, including sulphate of potash and potassium-magnesium production from the mineralisation directly below the Sylvite.

Stage one accounts for just 16% of the current total resource.

First production from Colluli is scheduled for no later than 2016.

Leading consultants

South Boulder Mines has appointed five key consultants to drive the DFS:

- Ercosplan - principal consultant;
- SENET Engineering - infrastructure;
- Ashmead Maritime - port area investigation;
- Dayle Kenny & AMC Mining Consultants - mining; and
- Knight Piesold - environmental & sustainable development.

Eritrean Government Approach

Meanwhile, an approach from the Eritrean Government to purchase a 30% interest in the Colluli Potash Project provides certainty and facilitates the company's efforts to secure additional investors as it works towards the completion of the DFS.

The government has requested that South Boulder submit a proposal to begin discussions regarding the Eritrean National Mining Corporation's (ENAMCO) intention to acquire up to a 30% paid participating interest in Colluli.

This is in addition to ENAMCO's existing 10% interest, which is to be carried 3.3% by ENAMCO and 6.7% by South Boulder.