Exploration company South Boulder Mines has completed the prefeasibility study (PFS) for its Colluli potash project, in Eritrea.
The project, which will be characterised by openpit mining using conventional truck-and- shovel methods without blasting, is a 50:50 joint venture between South Boulder and the Eritrean National Mining Company (Enamco).
The PFS was led by Australian headquartered engineering and project management consultancy Lycopodium Minerals and compiled by a number of Western Australian engineering companies.
The study highlights the economically robust nature of Colluli, which is expected to become one of the world’s most significant and lowest-cost potassium sulphate operations.
Enamco GM Berhane Habtemariam says the company is pleased that the PFS has been successfully completed. “The Colluli resource appears to have all the makings of a world- class project, which will play an important role in developing future skills for our maturing mining industry.”
He notes that Colluli is the world’s shallowest known potassium-bearing evaporite deposit, located only 75 km from a proposed product export terminal on the coast.
The strategic approach for the development of the project is to bring the resource into production using the principles of modularity, risk mitigation and full resource use. The first module serves as a platform for growth that balances risk, economic returns, fundability and market penetration.
Operations will focus on the production of high-quality sulphate of potash (SOP) – a speciality potassium fertiliser with a price premium over the more common potassium chloride.
The PFS examines a two-module development over a 30-year mine life, but the resource can accommodate substantial expansions. The development capital for Phase 1 is $442-million, including a $48-million contingency.
The project’s Phase 1 development capital includes a project-owned and-built road and a 900 000 t/y product export terminal, with exp- ected production output of 425 000 t/y of SOP, increasing to 850 000 t/y from the fifth year.
The project has a total cash cost of $189/t of SOP with an assumed real average SOP price of $588/t – determined through a comprehensive market study, with an average undiscounted after tax cash flow of $186-million a year over a 30-year mine life, as well as an undiscounted after-tax cumulative cash flow of $5.1-billion over a 30-year mine life.
In addition to the PFS, a comprehensive review of the Colluli resource was also conducted in preparation for the declaration of a maiden reserve. The maiden reserve is expected to be complete in the second quarter of the year.
“We have already started optimisation testwork for the process plant and, as we continue the definitive feasibility work, we will further advance conversations with strategic partners to assist with development of this globally significant project,” says South Boulder MD Paul Donaldson.