South Boulder Mines has released the Quarterly Operations Report for the quarter ending 31 Dec 2010.

To view the full report please Click here

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Assays from South Boulder Mines’ (ASX: STB, SO3-Fra, SO3-BER) first complete hole at its fully owned Colluli potash deposit in Eritrea have exceeded the company’s expectations, confirming Colluli as a highly significant potash deposit.

The first true width assays from hole Col-004 confirm extensive shallow potash at Colluli including: - 7.72m of Sylvinite @ 25% KCl (16% K2O) from 28.68m depth; including 3.44m of Sylvinite @ 44% KCl (28% K2O) from 32.96m and; - 14.79m of Carnallitite + Kainitite @ 16% KCl (10% K2O) from 48.55m depth; including 3.20m of Kainitite @ 22% KCl (14% K2O) from 55.60m; including 4.20m of Kainitite @ 24% KCl (16% K2O) from 58.60m.

Lorry Hughes, managing director, said “this is an outstanding result to be able to drill high grades at such shallow depths.” “Hole Col-004 is the first complete hole we have received from the laboratory and we expect to have the remainder of the holes within two weeks.

It appears that Colluli is one of the shallowest potash deposits in the world and I expect the engineering study results to confirm a cheap capex and opex operation.”

Exploration work is continuing, including the commencement of a ground gravity survey at the end of October to help delineate structures that control mineralisation.

The gravity results together with the remaining chemical results will allow South Boulder to better target further resource delineation drill sites. The drill rig is still onsite and drilling is set to resume in early November.

To date potash has been intersected over a 4.5km2 area and it is planned to expand on this with the current drill program.

Data will be used to generate a geological resource estimate at year end and concurrent scoping study estimates and planning is well advanced. Information on the scoping study program and further exploration results will be released as it comes to hand.

South Boulder Mines has a market capitalisation of $68.1 million, 87.8 million shares on issue and $3.4 million cash at bank. Eritrea is a country in the Horn of Africa, bordered by Sudan in the west, and Ethiopia in the south.

Source: Proactiveinvestors

South Boulder Mines Eritrea

By Tim Boreham, The Australian

We suggest that 99 per cent of the room wouldn’t raise their arms, and those who do are fibbers or fertiliser tragics. Given the Big Australian’s ballsy ploy, we’ll be hearing much more about the potassium-rich substance that is as crucial to growing food as phosphate.

For the uninitiated — that is, the 99 per cent — potash is the catch-all name for various potassium salts. Most fertilisers consist of three core elements — nitrogen, phosphate and potassium — with the consistency varying according to the type of crop.

Potash global consumption stands at 50 million tonnes a year and unlike most raw materials Australia doesn’t produce an ounce of it. Production is dominated by Russia’s Silvinit and Uralkali, rumoured merger partners that account for more than half of global production. Traditionally, Germany has been the leading producer.

South Boulder Mines (STB) chief Morry Hughes says there are barriers to developing potash deposits, including their depth: the last new mine started in Germany in the late 1980s. But on the plus side they’re usually uniform in quality and also extensive. Potash Corp, the biggest single producer, acts as oil’s equivalent of an OPEC swing producer, curtailing or increasing production according to demand trends.

The global potash price has been favourable, hovering at about $US340 a tonne. This compares with the average $US620 a tonne at the 2008 peak, but is well up on the $US175 a tonne level of 2006.

As with phosphate, potash pricing was meant to be immune from the global financial crisis, despite the perception that fertiliser is immune from the cycles because everyone has to eat.

In truth it is more complicated: corn and palm oil growers created a spike in demand when oil prices soared because their product was being used for biodiesel.

Locally, there are three or four resource juniors playing in potash, although not necessarily exclusively in that commodity.

South Boulder Mines has been better known for its Duketon nickel venture in Western Australia with Independence Gold, but it’s also appraising its “world class” Colluli potash project in Eritrea.

South Boulder had a tenement at Lake Disappointment, next to fellow potash hopeful Reward Minerals (RWD), but native title difficulties sent the company scouring the world.

It settled on the emerging mining province of Eritrea, where potash has been used for centuries.

“We have been involved in potash for some time, which not many people have given us credit for,” Hughes says.

But with BHP getting into potash in a humungous way there are more investors coming on board. He estimates between 20 per cent and 25 per cent of South Boulder’s share base has been attracted by potash.

In a 50-50 venture with Rum Jungle Uranium, Reward is working two exploration leases over a 150km expanse in central Australia, from Lake Amadeus to Karinga Creek.

“An analogous model would be the Great Salt Lake in Utah, the largest potassium sulphate producer in the US, [or] the Dead Sea.”

Speaking of Utah, Transit Holdings (TRH) has earned a 75 per cent interest in a tenement spanning 390sqkm, in the state’s sparsely populated southeast. The parties are aiming for an “exploration target” of 2.3 billion tonnes.

Completing our potash troika, Elemental Minerals (ELM) recently started drilling on its Sintoukola project in the Republic of Congo, part of a four-year effort to take it to bankable feasibility stage.