News Column

South Boulder Mines Ltd. - Clarification of Joint Venture Terms

June 30, 2014

ENP Newswire - 30 June 2014

Release date- 26062014 - In light of an article published in The Australian on 23 June 2014, South Boulder Mines Ltd wishes to clarify the details of its Shareholders Agreement with the Eritrean National Mining Corporation.

The agreement provided the basis for the establishment of joint venture company Colluli Mining Share Company ('CMSC'), which was incorporated in March 2014.

Details of the Shareholders Agreement and joint venture arrangement between the Company and the Eritrean National Mining Company (ENAMCO) were released to the market in the Company's ASX announcement dated 11 November 2013 titled 'South Boulder finalises key agreement with ENAMCO on the Colluli Potash Project.'

As set out in the announcement referred to above, key terms of the Shareholders Agreement are as follows:

ENAMCO and South Boulder each hold a 50% ownership in the Project through the newly incorporated company, Colluli Mining Share Company;

It is proposed that Project Development Costs for initial development will be funded 70% by debt and 30% by equity;

To the extent that third party commercial debt is not available for 70% of Project Development Costs, South Boulder will be required to provide the debt to CMSC on arms' lengths commercial terms;

The balancing 30% project equity required for initial Development Costs will be funded by South Boulder. South Boulder will be entitled to recoup 50% of this equity as a preferential payment from 50% of the Project cashflows (subject to ongoing funding requirements of CMSC) that would have otherwise been available to all equity holders and

CMSC will have a Board of 5 being 3 members from South Boulder and 2 from ENAMCO.


Amy Just

South Boulder Mines Limited

Tel: +61 8 6315 1444



About South Boulder Mines Ltd

South Boulder is an ASX-listed (ASX: STB) resources company currently developing the emerging, world-class Colluli Potash Project located in Eritrea, Africa. The Colluli Potash Project is located in the Danakil Depression region of Eritrea 65km from the coast comprising approximately 500km-2.

South Boulder Mines Limited has been actively exploring for potash at the Colluli Potash Project in Eritrea since 2009. Colluli is the world's shallowest potash deposit (starting at 16m), facilitating the low capex open pit mining and favourably positioned to supply the world's fastest growing markets.

The JORC/NI43-101 Compliant Mineral Resource Estimate for the flagship Colluli Potash Project now stands at 1.08 billion tonnes @ 18% KCl for 194Mt of contained potash. Substantial project upside exists in higher production capacity and market development for other contained products. Engineering Scoping Study (ESS) results were favourable, proving that an economic 2Mt p.a. potash mine can be built at a materially lower cost than typical potash development.

The start-up capital cost for Colluli is one of the lowest in the industry; couple this with cheap expansion capability via open pit mining methods, excellent infrastructure and location, and it becomes even more attractive, ensuring South Boulder gains a high level of investment interest for the long term. South Boulder Mines Ltd is working steadily towards developing the world's first, modern, open pit potash mine.

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Source: ENP Newswire

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