Name and Location
Colluli potash project, Eritrea.

Client
South Boulder Mines.

Project Description
The Colluli project has a current Joint Ore Reserves Committee and National Instrument 43-101-compliant measured, indicated and inferred mineral resource estimate of 1.079-million tonnes at 17.97% potassium chloride (KCl). The resource contains 261.81-million tonnes at 17.94% KCl, 674.48-million tonns at 17.98% KCl and 143.5-million tonnes at 18.00% KCl.

The Colluli resource consists of three potassium-bearing salts – sylvinite, carnallitite and kainitite. The original development plan considered a one-million-tonne-a-year potassium chloride production process using only  sylvinite.

An extensive review conducted in 2013 demonstrated that a significant improvement in economics could be realised by processing all the potassium-bearing salts in the resource, owing to a substantial reduction in the mine strip ratio and overall mining costs.

A prefeasibility study (PFS) was initiated in 2014 for the production of potassium sulphate from the resource using all potassium-bearing salts.

Net Present Value/Internal Rate of Return
Not stated.

Value
Not stated.

Duration
Production is scheduled for no later than 2016.

Latest Developments
South Boulder Mines has announced the Joint Ore Reserves Committee-compliant mineral resource estimate for the Colluli potash project.

The total mineral resource estimate comprises 1.29-billion tonnes at an average grade of 10.76% potassium oxide (K2O).

The mineral resource estimate was conducted and completed by AMC Consultants (AMC) and is a review of previous work conducted by Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mbH (Ercosplan).

The review was carried out in preparation for the allocation of the maiden reserve for the Colluli potash project, which will also be completed by AMC.

The estimate is based on drill-hole assay data from the original exploration drilling campaign conducted from 2010 to 2012, with additional quality assurance/quality control (QA/QC) drilling in late 2014. The 2014 drilling was for data validation purposes only and was not directly used in the mineral resource estimate. Geological interpretation was carried out by South Boulder and AMC, with mineral resource estimation and reporting by AMC.

The local geology is dominated by an extensive evaporite sequence, formed when the Red Sea was connected by a seaway to the Danakil depression. The mineralisation at Colluli is a layered evaporite sequence, covering 10 km north to south and 5km east to west and is defined by the Area A (south) and Area B (north) deposits.

AMC reinterpreted the mineralisation and produced a set of wireframed shapes to represent the geological and mineralisation boundaries. These wireframes were used to develop a three-dimensional block model.

AMC validated the data and requested four diamond drillholes to be twinned for QA/QC purposes; it also audited previous data, data collection processes and operational procedures for this resource estimate.

A total of 12 rock units have been interpreted in the current model, with six of these identified as a potential economic resource – upper, middle, and lower Sylvinite members, the upper and lower Carnallitite members and the Kainitite member.

A block volume model was created using the wireframed mineralisation interpretation and estimated grade for potassium, magnesium, sodium, chlorine, cacium, sulphate, potassium chloride, potassium oxide, sylvite, carnallite, Kainite, polyhalite, halite, bischofite, kieserite, and anhydrite. The selection of the estimation parameters was based on studies of the statistics and variography of the input drillhole assay data. All grades were estimated into parent cells, with subcells receiving the same grade as its parent. Subcells were allowed to form to honour the interpreted wireframe volume for each domain. Estimation was completed by using ordinary kriging.

Key Contracts and Suppliers
Consultants appointed to drive the DFS include Ercosplan (principle consultant), Senet Engineering (infrastructure), Ashmead Maritime (port area investigation), Dayle Kenny & Associates Mining (mining) and Knight Piesold (environment and sustainable development).

On Budget and on Time?
Not stated.

Contact Details for Project Information
South Boulder Mines, tel +61 8 6315 1444, fax +61 8 9478 7093 or
email info@southbouldermines.com.au.
Ercosplan, tel +49 361 3810 500, fax +49 361 3810 505 or email info@ercosplan.com.
Senet Engineering, tel +27 11 409 1300 or fax +27 11 608 2142.
Knight Piesold (Johannesburg office), tel +27 11 806 7111 or fax +27 11 806 7100.