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South Boulder Mines 25% share spike prompts ASX 'please explain'

South Boulder Mines 25% share spike prompts ASX 'please explain'

The major potash play South Boulder Mines received a speeding ticket form the ASX yesterday in the form of a price and volume query, after the company's shares jumped 25% in intra-day trade to $6.25, from $5.00 on Friday 25 February.

South Boulder said there was no material information that had not been disclosed to the market which may explain the sudden investor interest.

The performance of South Boulder is nothing short of outstanding over the past 12 months, with the shares closing at $6.00 yesterday, more than 20 times higher than the $0.26 from a year earlier.

The company is currently focused on boosting the JORC Resource of 102 million tonnes of potash at the Colluli potash deposit in Eritrea, with an expanded drilling campaign.

The most interesting aspect of the new drilling is that a second rig will be onsite by the end of March, with the ability to drill deeper and larger diameter core holes, providing the ability to substantiate the resource at depth.

To continue to move the Colluli project forward, a study into the optimum processing and production capacity from open pit mining is planned to be completed by mid-2011.

A major beneficiary of the run up in the South Boulder share price is Sprott Asset Management, which holds an 18.5% stake after purchasing an additional 3.5 million shares at $2.00 in a placement at the end of 2010.

Just from the placement, Sprott is sitting on a $14 million paper gain in less than three months.


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