PERTH (miningweekly.com) – Processing studies on ASX-listed South Boulder Mines’ Colluli potash project, in Eritrea, have delivered three commercially attractive alternatives to the original development path.

In 2013, South Boulder announced the results of a staged development model for the Colluli project, which examined the potential economics of starting production at a rate of one-million tons a year and expanding to two-million tons a year after five years.

The staged development model pegged the start of construction for 2014, with expansion capital only required by 2017, if potash production started in 2016. The project was expected to reach a steady-state production of two-million tons a year by 2020.

The original development approach was based on processing only sylvinite to produce a fertilizer product. However, South Boulder pointed out on Thursday that sylvinite represented only 16% of the one-billion tonnes of potassium-bearing salts that have so far been delineated within the resource.

With the processing studies completed, South Boulder has now shortlisted three development and processing options for the Colluli project, each with a different capital and operating cost structure, as well as a slightly different product mix.

South Boulder CEO Paul Donaldson said the processing review studies had improved the company’s confidence in the robustness of the project, adding that South Boulder was now looking forward to metallurgical testwork to confirm the findings, and move the project forward with the most attractive development option.

“Our key objective in this exercise has been to use all the potassium-bearing salts in the resource and ensure the processing options are correctly matched to what the resource can deliver in the most cost-effective manner.”

He added that there was significant potential in the kainite material, which represented more than 50% of the resource and has historically been used as a direct application fertilizer.

“The trade-off between mining costs, processing costs, capital intensity and what the resource can actually deliver is absolutely central to the success of this project, and the most recent analysis has put more emphasis on these issues than previous studies.”

Donaldson said that South Boulder was now in a much stronger position to confirm the preferred development option, complete a definitive feasibility study, and begin project development.

“The ultimate scale of the project is also impacted by these findings. We are turning our attention now to a pragmatic development approach that gives more consideration to start-up scale and modularity to mitigate safety, resource and commercial risk.”