Proactiveinvestors Australia

South Boulder Mines (ASX: STB) is an Australian based explorer and developer, incorporated in Western Australia on 21 August 2001. South Boulder’s flag ship project is the Colluli Potash Project located in Eritrea, Africa which is expected to be in production by 2016.

South Boulder also holds ground in the highly underexplored Duketon Greenstone Belt in Western Australia where the largest drilling program to date has commenced to increase initial resources.

Current Operation

Colluli Potash Project

•       Tier 1 asset in an emerging world class potash basin (from 16m depth)

•       JORC/NI43-101 Compliant Mineral Resource Estimate expanded in April 2012 to1.08Bt @ 18% KCl (total contained potash of 194Mt)

•       Expanded resource will substantially improve already robust economics

•       Stage 1   Pre- tax NPV12% US$1.33Bn, IRR  40.60% , Project Revenue US$6.03Bn over 17 years

•       Worlds cheapest start-up capital per tonne US$0.74Bn (including 15% contingency)

•       Low capital expenditure= low financing risk

•       Only 65km to proposed port and major shipping routes

•       Open pit mining and location will allow cheap cap-ex & op-ex mining and rapid expansion

•       Start-up production of 1Mt of Muriate of Potash (MOP) in 2016 or sooner

•       Potential to increase mine life to over 50 years; producing both MOP and Sulphate of Potash (SOP)

•       DFS Due for completion in 2013

South Boulders focus is currently on the Colluli Potash Project which has added recent value to the company’s portfolio due to exploration success and increased global demand in potash fertilisers.

The project is located in Eritrea approximately 180km southeast of the capital Asmara and only 65km from the Red Sea Coast which provides highly sought after infrastructure to major shipping routes.

Definitive feasibility studies will be complete in early 2013 with production scheduled for 2016 or sooner. The Colluli Project will be one of a few “Greenfields” potash mines to come into production in the next 10 years.

The Colluli open pit resource was increased in April 2012 from 564 million tonnes to 1.08 billion tonnes at 18% Potassium Chloride (KCl) for 194 million tonnes of contained potash. The updated resource has the potential to substantially improve the already robust economics, particularly as the shallow deposit is open in many directions and is expected to grow further.

Figure 1: Current JORC/43-101 Compliant Measured, Indicated and Inferred Mineral Resource Estimate

The resource comprises sylvite (KCl), carnallite (KMgCl3.6H20) and kainite (MgSO4KCl.3(H20) bearing horizons and has been identified from 16 – 70m depth. Kieserite (MgSO4.H20) is currently not included in the resource, however, is a mineral that is also important to the fertilizer industry for the production of sulphate of potash (SOP).

The Colluli potash deposit is the world’s shallowest, allowing extraction via open pit mining. There are currently no other open pit potash mines in operation and 91% of world production comes from deep underground mines. Activities including metallurgical testing, engineering design, environmental impact studies, social impact assessment and hydro-geological studies are being undertaken by global experts in conjunction with Eritrean employees of South Boulder Mines Ltd.

Discounted Cash Flow (DCF) financial modeling for the initial Stage 1 open pit mining and processing of the Colluli Potash Deposit has returned highly favorable economics.

The pre-production capital expense of USD 0.74 billion for 1Mt p.a. MOP production presents a highly attractive investment case, and compares very favorably with other proposed or planned potash developments in the industry. The average pre-production capital expense for Greenfield MOP projects is greater than USD 1 billion per 1 million tonnes of production capacity.

Duketon Greenstone Belt Projects

Duketon Gold Project, WA

•       100% owned project in underexplored greenstone belt (1,500km²)

•       New near surface ‘Terminator’ Prospect; AC hole TBAC24 – 60cm @ 1.3g/t from 2m, incl. 10m @ 4.25g/t from 3m

•       Mineralisation defined over 400m of strike and open in all directions

•       STB has highly prospective ground adjacent, proximal and along strike to, Moolart Well Mine (+2.2M ounces) and the Garden Well Development (+2.1M ounces) 

•       Scheduled combined total production for the ‘Duketon Gold Belt’ is 350,000oz by 2012/2013

•       Follow-up exploration underway

Duketon Nickel Sulphide JV, Western Australia

•       JV Partner, Independence Group NL is earning 70% on nickel rights by delivering a BFS within 5 years from the Grant of the relevant tenement

•       New Discovery - The Bulge ‘Rosie’ and ‘C2’ Nickel Prospects, 120km NNW of Laverton WA

•       Maiden JORC Resource 1.74Mt @ 1.7% Ni (~30kt), 0.4% Cu, 1.9g/t Pt+Pd (January 2012)

•       Rosie: 5.2m @ 9.13% Ni, 1.09% Cu, 0.21% Co and 7.09g/t 6PGE’s

•       C2: 50.00m @ 0.92% Ni, 0.04% Cu, 0.08g/t Pt+Pd from 275.0m, including 37.00m @ 1.05% Ni

•       Mineralisation is open and the largest drilling program to date has commenced to increase resources

•       Scoping Study underway into an open cut mine at C2 and underground mine at Rosie-  Mining Lease granted

South Boulder’s Duketon Greenstone Belt is considered highly prospective for nickel, copper and platinum group elements.

South Boulder has signed a farm-out Joint Venture agreement with Independence Group NL (ASX: IGO) which allows IGO to earn 70% of the nickel rights on South Boulder tenements within the Duketon Greenstone Belt by completing a Bankable Feasibility Study within five years from the Grant of the relevant tenement.

Two key prospects have been defined to date: Rosie and C2. The prospects are approximately 2km apart and the mineralization at both is considered open in most directions.

Ø  Rosie: 5.2m @ 9.13% Ni, 1.09% Cu, 0.21% Co and 7.09g/t 6PGE’s

Ø  C2: 50.00m @ 0.92% Ni, 0.04% Cu, 0.08g/t Pt+Pd from 275.0m, including 37.00m @ 1.05% Ni

The largest drilling program to date has commenced to increase resources. The Maiden JORC Resource 1.74Mt @ 1.7% Ni (~30kt), 0.4% Cu, 1.9g/t Pt+Pd was released in January 2012.

A mining lease has been granted and a Scoping Study is underway into an open cut mine at C2 and underground mine at Rosie.

The quality and potential of the Duketon Belt projects have been key to South Boulders early success and will continue to drive value for shareholders as the projects advance and exploration intensifies.

Further information is available on the website www.southbouldermines.com.au which includes a detailed video presentation of the Colluli potash project.

Board & Management

Mr Terrence Grammer- Chairman

Geologist +35 years; extensive multi-commodity mining, development, exploration and financing experience in Australia, Africa, Asia and New Zealand. Discovered Cosmos Nickel Deposit and founder of Western Area NL.

Mr Paul Donaldson- CEO 

Mr Donaldson was appointed as Chief Executive Officer in February 2013 and joins South Boulder from a series of senior management roles spanning more than 20 years with BHP Billiton (“BHP”). Mr Donaldson holds a Masters Degree in Business and Technology from the University of NSW and a degree in Chemical Engineering from the University of Newcastle.

At BHP, Mr Donaldson was most recently General Manager of the +50 million tonne per annum Area C Iron Ore operation in Western Australia. He was formerly Manager of Technical Marketing based in Asia, contributing to both product suite and product placement strategies for coking coal, manganese and iron ore. Other highly relevant roles include Manager of Port Operations at the Nelson Point Facility in Western Australia.

Mr Donaldson also brings extensive experience in high level business improvement and logistics at base metal operations and a high degree of integrated supply chain management, technical operational management and frontline leadership experience in the steel industry.

Mr Liam Cornelius- Executive Director

Geologist +20 years; exploration and financing experience with potash, gold, nickel, uranium and base metals in Australia, Africa and Asia. Founder of South Boulder Mines Ltd.

Dr Chris Gilchrist- Definitive Feasibility Manager & Non-Executive Director

Mineral Processing Engineer +30 years; mechanical & mineral engineering, feasibility, financing and project management experience with potash, phosphate, gold, iron ore, tin, coal and diamonds in Australia, Africa, United Kingdom and Europe. Ex-Cleveland Potash, Anglo American and Kenmare Resources.

Mr Flavio Garofalo- Chief Financial Officer

CPA +20 years; mining and development mining experience with nickel, copper and zinc including transition from developer to producer. Extensive corporate finance experience including project financing, investor relations and marketing. Ex- Kagara Zinc.

Mr Dennis Wilkins- Company Secretary

B.Bus, ACIS, AICD +25 years; extensive public company management within the resources sector. Extensive capital raising, funding and administrative management capability. Principle of DW Corporate.

Feasibility Management Team - DFS Managed by Dr Chris Gilchrist, Non-Executive Director

Dayle Kenny- Mining Specialist/ Mining Engineer Manager

Mining Engineer +30 years; extensive open cut mining experience including bankable feasibility studies, pit optimisation, geotechnical and hydrogeological assessment in Australia and Africa. Ex- Rio Tinto, Hamersley Iron Pty Ltd, WMC, Normandy Resources and Toro Energy Ltd.

Ercosplan- Lead Consultants / Potash Resource and Mineral Processing

Ercosplan are world renowned potash consultants with multi-disciplinary science experience spanning more than 50 years; Ercosplan are potash mining and processing consultants on mining and development projects throughout the global industry.

Zeray Leake- Eritrean Country Manager

Geologist +15 years; extensive experience with mineral exploration and development in Eritrea including potash, gold, base metals and industrial minerals.  Ex- Department of Minerals & Energy Eritrea.

Senet-  Infrastructure Consultants

Senet provide extensive project and construction expertise to the resource sector in remote areas throughout Africa, Central and South America, and Asia. Senet built Eritrea’s only operating mine which was commissioned in 2010.

Knight Piesold- ESIA & Hydrogeology Consultants

Knight Piésold is an international consulting company providing engineering and environmental services. Knight Piesold’s consulting engineers, scientists and technicians focus on solutions that respect social, environmental and economic responsibilities. Extensive Eritrean experience. 

Ashmead Maritime-Marine Project Consultants

Ashmead Maritime are specialists for integrated industrial shipping services with Self-Dischargers, Trans-Shippers and Floating Storage/Transfer Units

Sprott Asset Management 15%

Management 17%