ASX ReleaseColluli Review Delivers Mineral
Resource Estimate of 1.289Bt

25 February 2015

Company Details

Highlights

ASX Code:

STB•

Mineral resource of 1.289Bt, average grade 10.76% K2O

Share Price

$0.24

•

Contained K2SO4 (Potassium Sulphate) equivalent1 of 260Mt

Market Cap

$36M

•

Resource uplift of 210Mt mineralised material

Shares on issue

149M

•

97% of mineral resource in Measured and Indicated categories

Company options

28M•

The Colluli deposit comprises:

Cash at Bank

$8.5M

Measured mineral resource: 303Mt at 10.98% K2O

Contact Details
Managing Director•

Paul Donaldson

Indicated mineral resource:

951Mt at 10.89% K2OInferred mineral resource:

35Mt at 10.28% K2O

Pre-feasibility study for Potassium Sulphate (SOP) production on track
for completion in February 2015

Address
Ground Floor, 31 Ventnor Avenue
West Perth WA 6000
PO Box 970
West Perth WA 6872
Telephone+61 8 6315 1444
Facsimile+61 8 9486 7093
Email & Web Page

South Boulder Mines (ASX:STB) (“South Boulder”, “STB”, or “the Company”) is
pleased to announce the JORC 2012 Mineral Resource estimate for the Colluli
potash project in Eritrea, East Africa.
The total Mineral Resource estimate comprises 1,289 Million tonnes (Mt) at an
average grade of 10.76% K2O.
The Mineral Resource estimate was conducted and completed by AMC
Consultants (AMC) at the request of South Boulder, and is a review of previous
work conducted by Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau
mbH (Ercosplan).

info@southbouldermines.com.au
www.southbouldermines.com.au

The review was carried out in preparation for the allocation of the Maiden
Reserve for the Colluli potash project, which will also be completed by AMC.
South Boulder Managing Director, Paul Donaldson said “This is an excellent
outcome. As well as 210 million tonnes of uplift in the Mineral Resource
estimate, 97% of the Mineral Resource now sits in the Measured and Indicatedcategories.”“There is no question about the size and potential of the Colluli resource. It will
form the backbone of what will become a significant project in the future. This
work verifies this as one of the largest potassium sulphate resources globally,”
he said.
“It is also appropriate that we change our resource grade reporting from % KCl
to % K2O at this juncture, due to the combination of salts in the resource whichfavour the production of potassium sulphate (SOP) and is the focus of our prefeasibility study.”__________________________
1

100% recovery basis of potassium contained in total resource

The estimate is based on drillhole assay data from the original exploration drilling campaign conductedfrom 2010 to 2012, with additional QAQC drilling in late 2014. The 2014 drilling was for data validation
purposes only and was not directly used in the Mineral Resource estimate. Geological interpretation was
carried out by South Boulder and AMC, with Mineral Resource estimation and reporting by AMC.
The local geology is dominated by an extensive evaporite sequence, formed when the Red Sea wasconnected by a seaway to the Danakil depression. The mineralisation at Colluli is a layered evaporite
sequence, covering an area of approximately 10km north to south by 5km east to west and is defined by
two deposits, Area A (south) and Area B (north).
AMC reinterpreted the mineralisation and produced a set of wireframed shapes to represent the geologicaland mineralisation boundaries. These wireframes were used to develop a three-dimensional block model.
AMC validated the data and requested four diamond drillholes to be twinned for QAQC purposes, andaudited previous data, data collection processes and operational procedures for this resource estimate.
A total of twelve rock units have been interpreted in the current model, with six of these identified as
potential economic resource. These are Upper, Middle, and Lower Sylvinite members, Upper and Lower
Carnallitite members and the Kainitite member.
A block volume model was created using the wireframed mineralisation interpretation and estimated gradefor K, Mg, Na, Cl, Ca, SO4, KCl, K2O, Sylvite, Carnallite, Kainite, Polyhalite, Halite, Bischofite, Kieserite,
and Anhydrite into the model. The selection of the estimation parameters was based on studies of thestatistics and variography of the input drillhole assay data. All grades were estimated into parent cells, with
sub-cells receiving the same grade as its parent. Sub-cells were allowed to form in order to honour theinterpreted wireframe volume for each domain. Estimation was completed by using ordinary kriging.
The Mineral Resource estimate prepared has been classified and reported under the guidelines of the2012 JORC Code as Measured, Indicated and Inferred material. The tonnes and grade reported by AMC
are shown below.
Area

Area A

Area B

Total

Rock Unit

Sylvinite
Carnallitite
Kainitite
Sylvinite
Carnallitite
Kainitite
Sylvinite
Carnallitite
Kainitite

Measured

Indicated

Inferred

Total

Mt

K2O
Equiv %Mt

K2O
Equiv %Mt

K2O
Equiv %Mt

K2O
Equiv %

66
55
86
24
25
48
90
80
133

12
7
12
15
6
13
13
7
12

38
190
199
122
114
289
160
303
488

11
9
11
13
7
13
13
8
12

10
6
1
5
8
4
15
15
5

8
16
10
12
7
13
9
11
12

115
251
285
150
147
341
265
398
626

11
9
11
13
7
13
12
8
12

South Boulder Mines Ltd - ASX Release2

More information:
Email: info@southbouldermines.com.au
Website: www.southbouldermines.com.au
South Boulder Mines Limited: Telephone +61 8 6315 1444
ABN: 56 097 904 302
Paul Donaldson
MANAGING DIRECTOR

Amy Just
COMPANY SECRETARY

About South Boulder Mines Ltd
South Boulder is an ASX-listed (ASX:STB) resources company which is currently developing the Colluli Project in partnership with theEritrean National Mining Company (ENAMCO). The project is located in the Danakil Depression region of Eritrea, East Africa and is~75km from the Red Sea coast, making it one of the most accessible potash deposits globally. The resource is favourably positioned
to supply the world’s fastest growing markets.
Since exploration commenced in 2009 over 1 billion tonnes of potassium bearing salts have been identified. The combination of salts
within the resource makes it suitable for high yield, low energy input production of potassium sulphate, which is also known assulphate of potash or SOP. SOP is a specialty fertiliser that carries a substantial price premium relative to the more common
potassium chloride, which is the most common potassium salt known as potash.
Mineralisation within the Colluli resource commences at just 16m, making it the world’s shallowest potash deposit. The resource isamendable to open pit mining, which allows higher overall resource recovery to be achieved, is generally safer than undergroundmining and is highly advantageous for modular growth.
The JORC 2012 Compliant Mineral Resource Estimate for the Colluli Potash Project now stands at 1.289 billion tonnes @ 10.76%
K2O for 260Mt of contained SOP. Substantial project upside exists in higher production capacity and market development for othercontained products such as potassium magnesium sulphate, potassium chloride, rocksalt and magnesium chloride.
Our vision is to bring the Colluli project into production using the principles of risk management, resource utilisation and modularity,using the starting module as a growth platform to develop the resource to its full potential.

Competent Persons and Responsibility Statement
Colluli has a JORC 2012 Compliant Measured, Indicated and Inferred Mineral Resource Estimate of 1,289Mt @ 10.76% K2O. The
resource contains 303Mt @ 10.98% K2O of Measured Resources, 951Mt @ 10.89% K2O of Indicated Resources and 35Mt @10.28% K2O of Inferred Resources.
The information in this report relating to the Colluli Mineral Resource was compiled by Mr. John Tyrell, under the supervision of Mr.
Stephen Halabura M.Sc. P. Geo. Fellow of Engineers Canada (Hon), Fellow of Geoscientists Canada, and a geologist with over 25
years’ experience in the potash mining industry.
Mr. Tyrell is a Member if the Australasian Institute of Mining and Metallurgy and a full time employee of AMC. Mr. Tyrell has morethan 25 years’ experience in the field of Mineral Resource estimation.
Mr. Halabura is a member of the Association of Professional Engineers and Geoscientists of Saskatchewan, a Recognised
Professional Organisation (RPO) under the JORC Code and has sufficient experience relevant to the style of mineralisation and typeof deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012
Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).

Quality Control and Quality Assurance
South Boulder Exploration programs follow standard operating and quality assurance procedures to ensure that all samplingtechniques and sample results meet international reporting standards. Drill holes are located using GPS coordinates using WGS84
Datum, all mineralisation intervals are downhole and are true width intervals. The samples are derived from HQ diamond drill core,
which in the case of carnallite ores, are sealed in heat sealed plastic tubing immediately as it is drilled to preserve the sample.
Significant sample intervals are dry quarter cut using a diamond saw and then resealed and double bagged for transport to thelaboratory. Halite blanks and duplicate samples are submitted with each hole. Chemical analyses were conducted by KaliUmwelttechnikGmBHSondershausen, Germany utilising flame emission spectrometry, atomic absorption spectroscopy andionchromatography. Kali- Umwelttechnik (KUTEC) Sondershausen1 have extensive experience in analysis of salt rock and brine
samples and is certified according by DIN EN ISO/IEC 17025 by the Deutsche AkkreditierungssystemPrüfwesen GmbH (DAR). The
laboratory follow standard procedures for the analysis of potash salt rocks chemical analysis (K+, Na+, Mg2+, Ca2+, Cl-, SO42-,
H2O) and X-ray diffraction (XRD) analysis of the same samples as for chemical analysis to determine a qualitative mineralcomposition, which combined with the chemical analysis gives a quantitative mineral composition.

South Boulder Mines Ltd - ASX Release

3

APPENDIX 1JORC Table 1
Section 1 : Sampling Techniques and Data

Criteria
Sampling
Techniques

Drilling
Techniques

JORC Code explanation
Nature and quality of sampling(e.g. cut channels, random chips, or
specific
specialised
industry
standard
measurement
tools
appropriate to the minerals underinvestigation, such as down hole
gamma sondes, or handheld XRF
instruments, etc.). These examples
should not be taken as limiting thebroad meaning of sampling.
Include reference to measures
taken
toensuresamplerepresentivity and the appropriate
calibration of any measurement
tools or systems used.
Aspects of the determination ofmineralisation that are Material to
the Public Report.
Drill type (e.g. core, reverse
circulation, open-hole hammer,
rotary air blast, auger, Bangka,
sonic, etc) and details (e.g. core
diameter, triple or standard tube,
depth of diamond tails, facesampling bit or other type,whether core is orientated and if
so, by what method, etc.)

South Boulder Mines Ltd - ASX Release

Commentary
The Colluli deposit was sampled using diamond core from surface. A total of 103 diamond holes were drilled into
the deposit. 102 of the 103 holes had geological logging, assaying or geophysical logging and were available forthe resource estimate. The total metres of drilling for the project were 6,409 at the date of the resource estimate.
Drilling by STB occurred from June 2010 until October 2012. Borehole geophysical logging in the form of gamma
ray – density measurements were made on 22 drillholes in Area B and the results interpreted to determine
density of the various rock units.
Holes were drilled on an approximate UTM grid (WGS84, Zone37N) with a grid direction of approximately 050
degrees magnetic in Area A and 090 degrees in Area B, both at a dip of -90 degrees. The drill collar positioning
was a nominal 500m x 500m spacing in X and Y at Area A and a 700m x 1000m grid spacing at Area B.

Drillhole collars were originally set out using hand held GPS and on completion the collars were surveyed bysurvey contractors using high precision GPS. Downhole surveys were not completed as all holes were drilled at
90 degrees down-dip and were almost all less than 150m depth.
Diamond core was half-core sampled at regular intervals and generally constrained to geological boundaries
where appropriate.
Diamond core was drilled predominantly at HQ size.
Diamond core samples were cut and bagged and sent to TUC in Germany where they were crushed, split andpulverised and assayed for a suite of cations and anions using a liquid ion chromatography technique. Sample
pulps were then sent to K-Utec for check assaying using a similar process.
Diamond drillholes account for 100% of the drill metres and comprises HQ sized core.
All holes were drilled as diamond holes from surface, with HW 4” casing employed at the top of the holes due topoor ground conditions in the over burden unit.
No core orientation was recorded.

4

Criteria
Drill sample
recovery

JORC Code explanation
Method of recording and assessing
core and chip sample recoveries
and results assessed.

Measures taken to maximise
sample recovery and ensure
representative nature of thesamples.

Whether a relationship exists
between sample recovery andgrade and whether sample bias
may have occurred due topreferential
loss/gainoffine/coarse material.

South Boulder Mines Ltd - ASX Release

Commentary
Diamond core recovery was assessed by comparison of the interval of core presented in the core tray against thedriller’s core blocks.
Analysis showed that more than 93% of core intervals had 90% or better recoveries, with 96% of core having
recoveries of 80% or better.
Core recoveries in the uppermost unit, the overburden, were very poor and many losses occurred. Recoveries inthis domain ranged between 0-60%. These reduced recoveries were not associated with mineralisation and assuch are not considered material.
Diamond drilling utilised triple-tube techniques and constantly monitored drilling fluids in order to assist withmaximising recoveries PVC tubing, HW 4” pipe and HQ rods were used in the uppermost unit, with the tri-salt
mud balance constantly monitored for viscosity and density to reduce core dissolution whilst drilling.
Core depths are checked against the depth given on the core blocks and rod counts are routinely carried out by
the drillers. Recovered core was measured and compared against driller’s blocks.
Sections of two resource drillholes were drilled using diesel as drilling fluid, to ensure maximum recovery of themost highly soluble units in the geological sequence (especially in the Bischofite member). An additional four
drillholes were drilled for QAQC purposes in late 2014, with diesel fuel used as the primary drilling fluid.
Assessments on the effect of low recoveries were completed for the diamond drilling and found that there was
not likely to be any material impact or bias on the reported assay results as a result of the reduced recoveries. Allof the mineralised domains had recoveries in excess of 80%, and generally with less than 15% of the recorded
recoveries being less than 90%.

5

Criteria
Logging

JORC Code explanation
Whether core and chip samples
have been geologically andgeotechnically logged to a level ofdetail to support appropriate
Mineral Resource estimation,mining studies and metallurgicalstudies.

Whether logging is qualitative or
quantitative in nature. Core (orcostean,channel,etc)
photography.
The total length and percentage ofthe relevant intersections were
logged.

South Boulder Mines Ltd - ASX Release

Commentary
Diamond core was geologically logged using pre-defined lithological, mineralogical and physical characteristics(such as colour, weathering, fabric) logging codes. In addition structural measurements of major features werecollected.
The logging was completed at the company core shed by the responsible geologist and checked by the Senior
Geologist once completed.
All of the drilling was logged onto paper and has recently (late 2014) been transferred to a digital form andloaded into a Microsoft Access drillhole database. The latest geotechnical and QAQC twinned drillhole logging
was completed directly onto a laptop in the field using Microsoft Excel spreadsheets with drop-down boxes torestrict values entered. Logging information was reviewed by the Senior Geologist prior to final load into the
database.
All core trays were photographed. Given the nature of the mineralisation at Colluli (crystalline salts) the core was
not photographed wet, unless photos were taken on-site as soon as the core was removed from the barrel after
drilling.
Geotechnical logging of all diamond core consisted of recording core recovery, RQDs, amount of dissolution, corestate (ie whole, broken) and bedding to core angle for laminations, bedding, veining or fracture structures. In
addition in late 2014, twelve diamond holes (GT-A1-GT-A12) were drilled specifically for geotechnical staff andthen STB geologists after initial training. Four of these holes (GT-A6, GT-A8, GT-A11, and GT-A12) were planned
to be assayed as twinned holes for comparison with the existing Colluli drillhole database.
All holes also had downhole geophysical logging completed for natural gamma, hole diameter, neutron log, soniclog, temperature and conductivity (calibrated to 25oC). 22 of these holes also had downhole density logging
recorded.
Logging was both qualitative and quantitative in nature, with general lithology information recorded as
qualitative and most mineralisation records and geotechnical records being quantitative. Core photos werecollected for all diamond drilling.

All recovered intervals were geologically logged, apart from four drillholes (COL-005, COL-019B, COL-020, COL042) that had no potash intersections and one hole (COL-063A) that was abandoned at 54m downhole due topoor core recovery.

6

Criteria
Sub-samplingtechniques andsamplepreparation

JORC Code explanation
If core, whether cut or sawn andwhether quarter, half or all coretaken.

If non-core, whether riffled, tube
sampled, rotary split, etc andwhether sampled wet or dry.
For all sample types, the nature,quality and appropriateness of thesample preparation technique.

Qualitycontrol
procedures
adopted for all sub-samplingstages to maximise representivityof samples.

South Boulder Mines Ltd - ASX Release

Commentary
Diamond core was cut in half using a diesel powered core saw. No water was used for lubrication or dust
suppression as core dissolution would have occurred. The material being cut is relatively soft and this has notproved to be an issue. Sample intervals were marked on the core by the responsible geologist considering thelithological and structural features.
Core selected for duplicate analysis was further cut as quartered core with both quarters submitted individuallyfor analysis.
No non-core samples were taken.
The sample preparation techniques employed for the diamond core samples follow standard potash industry
best practice. To avoid dissolution by reacting with the water in the air, all samples were double bagged at thedrill rig, opened for logging and re-bagged immediately and heat sealed prior to transport to the laboratory.
Samples were crushed by hammer, within the plastic liner, to a grain size of approximately 1cm or less. The
entire sample was then transferred to a PVC vessel and homogenised by shaking.
Approximately one third of the homogenised sample was then taken and crushed inside a polythene bag byhammer to a grain size of 5mm or less. About 100g of this homogenised sample was then pulped by disk swingmill for 120 seconds. Three grams of this pulp was prepared for XRD analysis and ten grams dissolved in 990ml
distilled water and agitated for 24 hours prior to ion chromatography. The insoluble portion remaining from thedissolution was removed by a membrane filter (0.45 micron) and weighed.
For the initial drilling at Colluli, to hole COL-099, field QAQC procedures included the field insertion of “blanks”
taken from the Upper Rock salt domain, as the main minerals of economic interest were KCl and MgSO4. These
were inserted into the sample stream at a rate of approximately 1 in 15 samples. Coarse field duplicates weretaken by quarter cutting the core at a rate of approximately 1 in 20 samples. Certified reference materials(standards) were not added to the sample stream by STB, as there are no commercially available CRM’s forpotash.
The primary assay laboratory, TUC, also periodically inserted “blanks” in the form of clean distilled water. TUC
also assayed their own internal standards (TUCEV-HA and TUCEV-HK) at a rate of 1:15 samples.
Pulp duplicates were taken and re-assayed by a secondary assay laboratory, K-Utec, using a mixture of flame
emission spectrometry, atomic absorption spectroscopy and ion chromatography. These were taken at a rate of
approximately one in 40 samples.
7

Criteria
Sub-samplingtechniques andsamplepreparation

Quality of assay
data andlaboratory tests

JORC Code explanation
Measures taken to ensure that the
sampling is representative of thein-situmaterialcollected,
including for instance results for
field
duplicate/second-halfsampling.
Whethersamplesizes
areappropriate to the grain size of thematerial being sampled.
Thenature,qualityandappropriateness of the assaying
and laboratory procedures used
and whether the technique isconsidered partial or total.
For
geophysicaltools,
spectrometers, handheld XRF
instruments, etc, the parameters
used in determining the analysis
including instrument make andmodel, reading times, calibrations
factors
appliedandtheirderivation, etc.

South Boulder Mines Ltd - ASX Release

Commentary
Field duplicates from core samples generally showed an excellent correlation between original and duplicates,
however other measures of spread such as Half Absolute Relative Difference (HARD) showed some variance insome of the minor elements such as Ca and SO4.
Pulp repeat samples from the secondary laboratories also showed excellent correlation between original andrepeat samples.
Current industry standard sampling is used and deemed appropriate. All of the salts are coarse crystalline andare dissolved completely prior to analysis.

Primary assaying for the diamond core was completed by TUC using their proprietary method for ion
chromatography. TUC are recognised internationally for their work in potash and have a good reputation.
Their methods are however, confidential and AMC has no details of the exact process used. Pulp duplicates weretaken from three of the original drillholes and assayed at K-Utec laboratories in Germany.
AMC requested STB to drill four twinned drillholes to test the reliability of the TUC assaying. These were to be
assayed at K-Utec and pulp repeats tested at both TUC and SRC in Canada. K-Utec uses a combination of flame
spectrometry, atomic absorption spectroscopy and ion chromatography for analysis of potash salts.
Downhole geophysical readings were taken for 45 of the STB drilled diamond holes. Data collected included holediameter, neutron logs, conductivity, temperature, natural gamma, sonic logs and density.
Only 22 holes had density readings taken, due to breakages of the gamma-gamma probe. The work conducted
was performed by Abitibi Terratec using the following probes suspended from a 4-conductor cable:• Electromind T-Cd-GR• Electromind 3-arm calliper• RG Neutron-neutron probe• RG Gamma-gamma probe• ALT Sonic-Full Wave probe
Density measurements were validated by taking readings while the probe was in an aluminium block and in acontainer of water. There were three readings taken from each material.
AMC is unsure if any other calibration was undertaken for the other probes used and if any factors were applied
to the raw data collected.

8

Criteria

Verification ofsampling andassaying

JORC Code explanation
Natureofqualitycontrol
procedures
adopted(e.g.
standards, blanks, duplicates,
external laboratory checks) andwhether acceptable levels of
accuracy (i.e. lack of bias) and
precision have been established.
The verification of significant
intersections by either independentor alternative company personnel.
The use of twinned holes.

Documentation of primary data,
data entry procedures, data
verification, data storage (physicaland electronic) protocols.

South Boulder Mines Ltd - ASX Release

Commentary
According to the Ercosplan resource report of April 2012, TUC performed internal QAQC using its own internal
standards and blanks (water). They also apparently take part in round-robin testing regularly and have a good
reputation internationally in the potash industry.
STB included blanks (halite from the Upper Rock Salt unit) and coarse duplicates in the sample streams sent to
TUC and K-Utec and had pulp repeat assaying completed at K-Utec.
Limited QAQC reporting from the AMC recommended twin hole program is available at the time of writing thisreport, however, the results that have been returned show no material issues.
Diamond core photographs have been reviewed for the recorded sample intervals. AMC Senior Geologist, John
Tyrell visited the Colluli project site and the STB head office and core shed in Eritrea in October 2014. Whilst
there he viewed the drillhole collars on-site and the remaining core (full, half or quarter) at the core shed in
Asmara.
Selected sections of drillholes were examined in detail in conjunction with the geological logging and assaying.
AMC requested four drillholes be twinned for the purpose of testing the veracity of the logging and assaying at
Colluli. The holes were sampled using the same intervals (where possible) to the original drillholes in order tocompare the logging and assaying as directly as possible.
The results for the twin hole assaying and QAQC programme are in progress at the time of this report, however
the results that have already been returned show no material issues.
All primary geological data (prior to 2014) was collected using paper logs and transferred into Excel
spreadsheets. This was checked by the Chief Geologist for data entry error. Assay results were returned from thelaboratories as electronic data (Excel spreadsheets and PDF files).
Geophysical data was recorded as log ASCII standard (LAS) files and survey and collar location data was stored
as spreadsheet files.
In late 2014, all of the primary data was collected and imported into a Microsoft Access relational database,keyed on borehole identifiers and assay sample numbers. The data was verified as it was entered and checked by
the STB Chief Geologist.

9

Criteria

JORC Code explanation
Discuss any adjustment to assay
data.

South Boulder Mines Ltd - ASX Release

Commentary
The primary and secondary assay laboratories reported results from the assaying process as weight % values of
the assayed cations (Mg2+, Ca2+, Na+, K+) and anions (Cl-, SO42-). KCl and K2O values were also reported. The assays
for K were multiplied by a factor of 1.90668 to report KCl and multiplied by a factor of 0.6317 to report K2O.
The raw assay values were also converted to mineral weight percentages using a “Normative Mineralogy”
conversion scheme. This scheme relies upon the XRD results for the mineralogy of every sample. This was a twostep process which is listed below:
Step 1 – Combine cations and anions to simple salts according to the following scheme:• Combine with Cl, in the following order: Na, K, Mg, Ca• Combine with SO4 in the following order: Ca, Mg, K, Na• Based on experience with potash deposits, the analyses should be either MgCl2 or K2SO4 normative,
meaning if CaCl2 or Na2SO4 results from these combinations, the analysis is suspect.
Step 2 – Combine the simple salts to salt mineralogy according to the following simplified scheme:• All NaCl is Halite• If MgCl2 is present, it is combined 1:1 with KCl to form Carnallite• If MgCl2 > KCl, remaining MgCl2 to Bischofite• If K2SO4 is present, combine with CaSO4 and MgSO4 to form Polyhalite• If KCl > MgCl2 and MgSO4 available, combine remaining KCl 1:1 to Kainite• If remaining KCl>MgSO4, remaining KCl after Kainite to Sylvite, otherwise remaining MgSO4 to Kieseriteand• Remaining CaSO4 to Anhydrite
The resulting salt percentages are combined with the measured insoluble component and should sum to 100%(+3 to -5%). As other potash mineral occur in nature and are not taken into account, this scheme is at bestindicative and the results are checked against the logging and core.
The results are also checked to ensure over estimation of Kainite content and under estimation of the Sylvite andKieserite does not occur.

10

Criteria
Location of data
pointsJORC Code explanation
Accuracy and quality of surveys
used to locate drillholes (collar
and down-hole surveys), trenches,mine workings and other locations
MineralResourceusedinestimation.
Specification of the grid system
used.
Qualityandaccuracyof
topographic control.

Data spacing anddistribution

Data spacing for reporting of
exploration results.

Whether the data spacing anddistribution is sufficient toestablish the degree of geologicaland grade continuity appropriate
for the Mineral Resource and Ore
Reserve estimation procedure(s)and classifications applied.
Whether sample compositing has
been applied.

South Boulder Mines Ltd - ASX Release

Commentary
All of the drillhole collar positions were initially positioned using hand held GPS. In September 2012, the state
run Eritrean Mapping and Information Centre (EMC) completed a program to position five survey control points
at and around the project site. These were positioned using Leica system 1200 differential global positioning
system (DGPS) equipment with an accuracy of +/-5mm.
All of the collar positions at site are now surveyed using DGPS referencing the control point nearest to Colluli,
BM-1 (1594828.511mE, 644029.0546 mN, -101.3126 mRL, UTM). The collars are surveyed in campaigns by an
external contractor after the holes are drilled.
The grid projection used for Colluli is WGS84, UTM37N. All reported coordinates are referenced to this grid.

Topography data for Colluli has been generated from a series of contours taken from data provided by the NASA
Shuttle Radar Topography Mission in February 2000. A wireframe was produced from the 2m contour data. AMC
believes that the topography data is adequate for the project at this stage.
Drilling at Colluli has been focussed on two deposits. Area A and Area B. The drillhole spacing at Area A isapproximately 500m x 500m in easting and northing in the better drilled parts of the deposit, increasing to
1000m x 1000m at the peripheries. The grid pattern is aligned at approximately 050 degrees magnetic. There is a
cruciform pattern of close-spaced drilling in the centre of the deposit designed to check short scale variability,
which has a spacing of nominal 50m.
At Area B, the drillhole spacing is a nominal 650-700m in easting by 1000m in northing, with the grid direction
approximately east-west.
The spacing increases to approximately 1000m in easting and northing at the peripheries.
The degree of geological and grade continuity demonstrated by the data density is sufficient to support thedefinition of Mineral Resources and the associated classifications applied to the Mineral Resource estimate as
defined under the 2012 JORC Code. Variography studies have shown very little variance in the data for most of
the estimated variables and ranges in the order of several kilometres.
No compositing was applied to the exploration results prior to assaying. All samples were composited tocommon lengths after being assayed, prior to their use in the Mineral Resource estimate.

11

Criteria
Orientation ofdata in relation
to geologicalstructureSample Security

Audits orreviews

JORC Code explanation
Whether the orientation ofsampling
achieves
unbiasedsampling of possible structures
and the extent to which this is
known, considering the deposittype.
If the relationship between the
drilling orientation and theorientation of key mineralised
structures is considered to haveintroduced a sampling bias, thisshould be assessed and reported if
material.
The measures taken to ensure
sample security.

The results of any audits orreviews of sampling techniquesand data.

South Boulder Mines Ltd - ASX Release

Commentary
The mineralisation is interpreted to be very shallow dipping, roughly planar with stratiform bedding striking
approximately east-west and dipping at less than 0.5 degrees to the southwest in Area A and less than 1.0
degrees to the southwest in Area B. The diamond drilling is exclusively conducted at -90 degrees, producing
drillhole intersections with the mineralisation at effectively 90 degrees.
The orientation of drilling with respect to mineralisation is not expected to introduce any sampling bias.

Samples were collected onsite under supervision of a responsible geologist and any potential soluble samples
were sealed with taped double bags prior to taking form the rig site. The samples were then stored in lidded core
trays and closed with straps before being transported by road to the company core shed in Asmara. Only
certified company drivers were allowed to transport the core. Once logging was completed the samples for assay
were re-bagged and put into double plastic bags, which were heat sealed with the correct sample number inside
the outer bag. The samples were then placed into heavy plastic drums, which were sealed ready for transport
overseas for assaying. As the samples were travelling overseas for assay, the drums may have been opened bycustoms both in Eritrea and at their destination. AMC does not believe this to be an issue, as individual samples
are in heat sealed bags and are not easily tampered with.
Despatch sheets were compared against received samples and discrepancies reported and corrected.
A review of the sampling techniques and data was completed by Ercosplan in 2012 and by Snowden in 2013,neither found any material error. AMC also reviewed the data in the course of preparing the Mineral Resource
estimate. A review of the method used by the primary assay laboratory, TUC, was not available due to the
proprietary nature of their potash assaying process.
AMC believes that the data integrity and consistency of the drillhole database shows sufficient quality to support
resource estimation.

12Section 2 : Reporting of Exploration Results

Criteria
Mineraltenement andland tenure
statusExploration
done by otherpartiesGeology

JORC Code explanation
Type, reference name/number,
location and ownership including
agreements or material issues withthird parties such as joint ventures,
partnerships, overriding royalties,
native title interests, historicalsites, wilderness or national parkand environmental settings.
The security of the tenure held at
the time of the reporting alongwith any known impediments toobtaining a license to operate in
the area.
Acknowledgement and appraisal if
exploration by other parties.

Deposit type, geological setting
and style of mineralisation.

South Boulder Mines Ltd - ASX Release

Commentary
The Colluli Project is located wholly within an exploration concession granted by the State of Eritrea in 2009,
which encompassed an area of approximately 857km2, bordered to the West by the Ethiopian state border (asdefined by the Eritrea-Ethiopia Boundary Commission in 2002). In 2010, the concession area was reduced via resurveying of its eastern boundary by approximately 225km2 to its current area of approximately 633km2. STB
owns a 50% interest in the project, with the remaining 50% owned by the state of Eritrea.
AMC is unaware of any other joint venture, native title, environmental, national park or other ownershipagreements on the concession area.
The concession area is in good standing and no known impediments exist.

Previous exploration in the wider Dallol region of the Danakil Depression has been undertaken since the early
1900’s, with extensive drilling (approx. 300 holes), geophysical surveys, geological and topographic mapping andhydrogeological works undertaken from 1959 to 1968.
At the concession area proper, previous exploration was undertaken by a number of parties since 1969. The first
drilling at Colluli was undertaken by the Ethiopian Potash Company Inc. (EPC), who carried out exploration
drilling and chemical analyses for potash in five sub-areas in the border region Eritrea-Ethiopia (N of Dallol) up
to the Buri Peninsula (S of Massawa). The sub-area named “Colluli” at the border region between Eritrea andEthiopia was reported to contain two distinct zones of potassium and magnesium minerals in a thick section of
Halite in the western part of the sub-area (EPC Engineering Division Mine, 1984). Approximately eight othercompanies have reported mineralisation considered (by them) mineable in the area (all now in Ethiopia), but
none at the actual Colluli Project site until STB started exploration on the concession in 2010.
The Colluli Project area is located in the Danakil Depression, which strikes NW-SE with an extension of morethan 200km from Lake Bada in the NW to Lake Acori in the SE. The structure of the Danakil Depression widens to
the South, beginning with 10km width in the North and widening up to 70km in the South.
The northern part is the deepest and has elevations as low as 50m to 128m below sea level. The depression isflanked by the Danakil Alps to the northeast and the Ethiopian Highlands to the southwest. These consist ofPrecambrian gneisses and phyllites as well as Jurassic sediments, Palaeozoic granites and intruded Neogene
basalts.
13

Drillhole
Information

Data aggregation
methods

A summary of all informationmaterial to the understanding of the
exploration results including atabulationofthefollowing
information
forall
Material
drillholes:
Easting and northing of the drillhole
collarElevation or RL (Reduced Level –elevation above sea level in metres)of the drillhole collar
dip and azimuth of the holedown hole length and interception
depthhole length.

In reporting Exploration Results,
weighting averaging techniques,maximum and/or minimum grade
truncations (eg cutting of highgrades) and cut-off grades areusually Material and should bestated.

South Boulder Mines Ltd - ASX Release

Locally at Colluli the landscape is dominated by flat lying sediments and is approximately 120 metres below sea
level. The mineralisation in the project area is bound to the northeast by Pliocene to recent anhydrite/gypsum,
halite and clays. The mineralisation is hosted by a potash sequence overlain by clastic sediments comprised ofsands and silts. Underlying the clastic sequence is a sequence of salts consisting of a discrete sub-members
including the “Upper and Lower Rock Salt”, “Sylvinite”, “Upper and Lower Carnallitite”, “Bischofite”, “Kainitite”
and finally the “Black Clay” at the base of the drilled sequence.
The bedding is very shallow dipping (less than 0.5 degrees) to the southwest and bound by faults to thenortheast and southwest. These faults are steep, with interpreted throws of approximately 20m. A major fault
with a throw of approximately 50 to 100m separates the mineralised Area A from Area B. The interpreted fault
line track along the course of the Zariga River system.
The mineralisation is in the form of coarse crystalline salts, predominantly in the form of sylvinite, carnallitite,kainitite, and rock salt, containing the mineral types Sylvite (KCl), Carnallite (KMgCl3.6(H2O)) and Kainite(MgSO4.KCl.3H2O)), with common interbedded halite (NaCl) and kieserite (MgSO4.H2O).
No exploration results have been reported in this release, therefore there is no drillhole information to report.
This section is not relevant to reporting Mineral Resources.

No exploration results have been reported in this release, therefore there is no drillhole intercepts to report. Thissection is not relevant to reporting Mineral Resources.

14

Criteria

Relationshipbetweenmineralisation
widths andintercept lengths
Diagrams

Balanced
Reporting

JORC Code explanation
Where
aggregateintercepts
incorporate short lengths of highgrade results and longer lengths of
low grade results, the procedureused for such aggregation should
be stated and some typicalexamples if such aggregations
should be shown in detail.
The assumptions used for any
reporting of metal equivalentvalues should be clearly stated.
Ifthegeometryofthemineralisation with respect to thedrillhole angle is known, its nature
should be reported.

Commentary
No exploration results have been reported in this release, therefore there is no drillhole intercepts to report. Thissection is not relevant to reporting Mineral Resources.

Appropriate maps and sections(with scales) and tabulations ofintercepts should be included forany significant discovery being
reported. These should include, but
not be limited to a plan view ofdrillhole collar locations andappropriate sectional views.
Where comprehensive reporting of
all Exploration Results is notpracticable,
representative
reporting of both low and highgrades and/or widths should bepracticed to avoid misleading
reporting of Exploration Results.

No exploration results have been reported in this release, therefore there is no drillhole intercepts to report. Thissection is not relevant to reporting Mineral Resources.

South Boulder Mines Ltd - ASX Release

No exploration results have been reported in this release, therefore there is no drillhole intercepts to report. Thissection is not relevant to reporting Mineral Resources.

No exploration results have been reported in this release, therefore there is no drillhole intercepts to report. Thissection is not relevant to reporting Mineral Resources.

No exploration results have been reported in this release, therefore there is no drillhole intercepts to report. Thissection is not relevant to reporting Mineral Resources.

15

Criteria
Other
substantive
exploration data

Further work

JORC Code explanation
Other
explorationdata,
ifmeaningful and material, should
be reported including (but notlimitedto):geologicalobservations; geophysical survey
results;geochemical
surveyresults; bulk samples – size andmethodoftreatment;
metallurgical test results; bulk
density, groundwater, geotechnicaland rock characteristics; potential
deleterious or contaminating
substances.
The nature and scale of planned
further work (eg tests for lateralextensions or depth extensions orlarge-scale step-out drilling).

South Boulder Mines Ltd - ASX Release

Commentary
No exploration results have been reported in this release, therefore there is no drillhole intercepts to report. Thissection is not relevant to reporting Mineral Resources.

The decision as to the necessity for further exploration at Colluli is pending completion of the mining technicalstudies on the currently available resource.

16Section 3 : Estimation and Reporting of Mineral Resources

Criteria
Database
Integrity

JORC Code explanation
Measures taken to ensure thatdata has not been corrupted by, forexample, transcription or keying
errors,betweenits
initialcollection and its use for Mineral
Resource estimation purposes.
Data validation procedures used.

Site Visits

Comment on any site visits
undertaken by the Competent
Person and the outcome of thosevisits.
If no site visits have been undertaken
indicate why this is the case.

South Boulder Mines Ltd - ASX Release

Commentary
All of the drilling was logged onto paper and has recently (late 2014) been transferred to a digital form andloaded into a Microsoft Access drillhole database. The latest geotechnical and QAQC twinned drillhole logging
was completed directly onto a laptop in the field using Microsoft Excel spreadsheets with drop-down boxes torestrict values entered. Logging information was reviewed by the senior geologist prior to final load into the
database.
The data is now stored in a single Microsoft Access database for the Colluli project.
Prior to 2014, the data validation was initially completed by the responsible geologist logging the core andmarking up the drillhole for assaying. The paper logs were transferred to Excel spreadsheets and compared withthe originals for error. Assay dispatch sheets were compared with the record of samples received by the assay
laboratories. All of the electronic files were stored in directories for each data type and labelled by drillhole
identifier, allowing for easy recognition of missing data. Since late 2014, all of the drillhole data has beencollected and input into a Microsoft Access database, keyed on drillhole identifier (BHID) and assay sample
number. All of the data was verified at the time of import to Access and any error was corrected.
Both internal (STB) and external (Ercosplan, Snowden and AMC) validations were/are completed when data wasloaded into special software for geological interpretation and resource estimation. AMC checked the data foroverlapping intervals, missing samples, FROM values greater than TO values, missing stratigraphy or rock type
codes, downhole survey deviations of +/- 10o in azimuth and +/- 5o in dip, assay values greater than or less than
expected values and several other possible error types when loading the data into CAE Studio 3 (Datamine)
software. Furthermore each assay record was examined and mineral resource intervals were picked by theCompetent Person.
QAQC data and reports are normally also checked. Ercosplan and Snowden both reported briefly on the available
QAQC data for Colluli and AMC instigated a drilling program of four twinned drillholes for geological and assay
data validation purposes. AMC produced a QAQC report on the results of this program.
AMC Senior Geologist, John Tyrell visited the Colluli project site in late 2014 and inspected the Area A and Area B
deposits. Whilst on site he witnessed the drilling of validation drillholes and their geological logging andsampling preparation for assaying.
The geology, sampling, sample preparation and transport, data collection and storage procedures were all
reviewed whilst at the project site and at the STB office and core shed in Asmara. AMC used this knowledge to aid
in the preparation of this Mineral Resource Estimate for the Colluli Area A and Area B deposits.

17

Criteria
Geologicalinterpretation

JORC Code explanation
Confidence in (or conversely, theuncertainty of) the geologicalinterpretation of the mineraldeposit.

Nature of the data used and if any
assumptions made.
The effect, if any, of alternativeinterpretations
on
MineralResource estimation.

South Boulder Mines Ltd - ASX Release

Commentary
The Colluli potash mineralisation is one of only a few shallow potash deposits documented globally. Detailed
mapping, geophysical (including seismic and gravity studies) and mineralogical studies have been completed by
STB geologists and contracted specialists between 2011 and 2014. These data and the relatively closely-spaced(for potash) drilling have led to a good understanding of the mineralisation controls.
The mineralisation is hosted within very shallow dipping bedded evaporite units (potash salts and halite) which
are areally extensive and continuous. There is an obvious change in the sequence at the edges of themineralisation, explained by faulting in the order of 20m or so.
Ercosplan had interpreted internal faulting in their 2012 report and model, but the vertical offsets are very small
and thus have not been included in the current interpretation for the resource model as they would
unnecessarily complicate the stratigraphy. Over the spacing of the drillholes, the difference in RL is negligible
and they do not appear to materially affect the distribution of the potash units.
There is no obvious alteration in the mineralised units.
No assumptions are made.
Neither alternative interpretations nor estimations were undertaken by AMC.

18

Criteria

JORC Code explanation
The use of geology in guiding andcontrolling Mineral Resource
estimation.

The factors affecting continuity
both of grade and geology.

South Boulder Mines Ltd - ASX Release

Commentary
Geological observation has underpinned the resource estimation and geological model. Rock type andgeochemistry (assayed anion and cation values as well as normative mineralogy) were used to define thefootwall and hanging wall boundaries for each unit. The geological model was developed as an iterative processof checking against logging and photography as needed during the interpretation.
The extents of the geological model were constrained by drilling. Geological boundaries had only minimal
extrapolation beyond drilling in line with the resource classifications of indicated or inferred.
The domain coding for the Colluli project (Areas A & B) is as follows:
Lithology/Member
Rock CodeNumeric Domain CodeOverburden
OVBD
1000
Upper Rock Salt
URST
2000
Marker Beds
MBED
3000 (reserved for future use)
Upper Sylvinite
USYL
4100
Middle Sylvinite (low grade)
MSYL
4200
Lower Sylvinite
LSYL
4300
Upper Carnallitite
UCRT
5000
Bischofitite
BSFT
6000
Lower Carnallitite
LCRT
7000
Kainitite
KANT
8000
Lower Rock Salt
LRST
9000
Clay
CLAY
10000
Key factors that are likely to affect the continuity of grade are:
• The down-hole variability of the geological units; the potash units are commonly interbedded with otherhalite and evaporite salts• The variability at deposit scale due to complete or partial non-deposition, dissolution of erosion of a salt
layer
• Internal faulting at a scale that is too small to be defined at the current drill spacing.

19

Criteria
Dimensions

JORC Code explanation
The extent and variability of theMineral Resource expressed as
length(alongstrikeorotherwise), plan, width, anddepth below surface to the upperand lower limits of the Mineral
Resource.

Estimation andmodellingtechniques

The nature and appropriatenessof the estimation technique(s)applied and key assumptions,
including treatment of extreme
grade
values,domaining,interpolation parameters andmaximum
distanceof
extrapolation from data points.
If a computer assisted estimation
method was chosen include a
descriptionofcomputersoftware and parameters used.

The availability of check
estimates, previous estimates
and/or mine production records
and whether the Mineral

South Boulder Mines Ltd - ASX Release

Commentary
The deposit at Area A strikes approximately 7kms and is approximately triangular being approximately 4kmat
its widest point. The mineralised units dip less than one degree towards 170-180 degrees azimuth. The
mineralised sequence (excluding the Upper Rock Salt) ranges in thickness from 10m to 50m and isapproximately 20 – 60m below surface.
At Area B the units also dip less than one degree towards 170-180 degrees and strike for a distance of nearly
8km. Area B mineralisation is about 5km at its widest point and 3kms at its narrowest (across strike). The
mineralised sequence ranges in thickness from 10-20m and is 9 to 150m below surface.
Areas A and B are separated by an apparent fault with an interpreted offset of 20 to 100m.
Grade estimation was completed using ordinary kriging (OK) for the Mineral Resource estimate. Datamine
software was used to estimate grades for K, Mg, Na, Cl, Ca, SO4, KCl, K2O, Sylvite, Carnallite, Kainite, Polyhalite,
Halite, Bischofite, Kieserite and Anhydrite using parameters derived from statistical and variographic studies.
The majority of the variables estimated have coefficients of variance less than 1.0.
Drillhole spacing varies from approximately 500m x 500m at Area A to 750m x 750 – 1000m at Area B.
Drillhole sample data was flagged with numeric domain codes unique to each mineralisation domain. Sample
data was composited to 1m, 1.5m, 2m or single intercept (domains 4100 and 5000, Area A) downhole lengths,with the resulting composite length adjusted to retain residuals.
The influence of extreme sample outliers was reduced by top-cutting where required. The top-cut levels foreach mineralisation domain were determined using a combination of grade histograms, log probability plots,
and decile and percentile analysis.
Grade was estimated into six mineralisation domains and four waste (although Upper Rock Salt may form a
resource with additional work) domains. The key mineralisation domains had downhole and directionalvariography performed where the number of samples permitted it.
The waste domains and low sample number mineralisation domains used the variograms from themineralisation domain with the closest mineralogy type. All variograms were scaled to the variance of theindividual domains. Grade continuity varied from several meters in the vertical direction, to kilometres in thealong and across strike directions. All estimated elements in the mineralisation domains had major search axes
lengths of approximately 2/3 the longest variograms range, with the other search axes scaled according totheir corresponding variograms. The vertical (minor) search axis ranges were multiplied by a factor of ten, to aminimum of 20m, due to the proportionally extreme lengths of the major and semi-major ranges.
A previous Mineral Resource estimate was reported for Colluli in April 2012 which was completed by German
potash expert company Ercosplan. This was classified and reported under Canadian National Instrument 43101 (NI 43-101) Guidelines but would not be reportable under JORC 2012. The estimate used a polygonal-type
estimation process, the “Radius of Influence” method, which uses cylinders of equal grade and thickness
20

Resource
estimatetakes
appropriate account of such
data.

The
assumptions
maderegarding recovery of byproducts
Estimationofdeleterious
elements or other non-grade
variablesofeconomicsignificance (e.g. sulphur for acidmine drainage characterisation)
In the case of block modelinterpolation, the block size in
relation to the average sample
spacingandthesearchemployed.

Anyassumptions
behindmodelling of selective mining
units.
Any
assumptions
about
correlation between variables

South Boulder Mines Ltd - ASX Releaseinfluence to arrive at a weighted average derived tonnage in each resource and uses a cylindrical classification
surrounding each drillhole.
The 2014 Mineral Resource estimate is a completely new block model, using interpreted wireframes to definea volume and grade estimated by kriging based on variographic studies.
Classification takes into account grade and geological continuity between drillholes rather than within a set
radius and/or volume surrounding them.
No assumptions were made regarding recovery of by-products.
No estimates were undertaken for any non-grade variables.
The Colluli block models use a parent cell size of 500m in northing, 500m in easting and 2m in RL. This
corresponds to approximately half the average drillhole spacing at Area B and slightly smaller than the widest
drill spacing at Area A. Sub-celling was allowed to occur down to 50m in easting, 50m in northing and 0.02m in
RL for all domains. After completion of the volume model it was optimised to reduce the sub-cells whilst
keeping the domain codes intact. This allowed for accurate volume representation of the interpretation whilst
keeping the overall model size down.
Grade was estimated into parent cells, with all sub-cells receiving the same grade as their relevant parent cell.
Discretisation was set to 10 by 10 by 2 in X, Y and Z respectively for all domains.
Search ellipse dimensions for each domain were based on variography. Three search passes were used for eachestimate in each domain. The first search allowed a minimum of 10 and a maximum of 25 composites. For thesecond pass, the first pass search ranges were expanded by 2.5 times. A minimum of 5 composites and amaximum of 25 composites were allowed. The third pass search ellipse dimensions were extended by 4 times.
A minimum of 2 composites and a maximum of 30 composites were allowed for this pass. A limit of 3composites from a single drillhole was permitted.
Upon direction of STB it was assumed for modelling purposes that the deposit would be mined in its entirety
by the open pit method so no selective mining units were assumed in this estimate. Model block sizes were
determined primarily by drillhole spacing and statistical analysis of the effect of changing block sizes in the
final estimates.
All elements within a domain used the same sample selection routine for block grade estimation. No co-kriging
was performed at Colluli.
21

Description
of
how
the
geological interpretation wasused to control the resource
estimates.
Discussion of basis for using or
not using grade cutting or
capping.

Moisture

Cut-off parameters

The process of validation, thechecking process used, thecomparison of model data todrillhole data, and use ofreconciliation data if available.
Whether the tonnages are
estimated on a dry basis or withnatural moisture, and themethod of determination of the
moisture content.
The basis of the adopted cut-off
grade(s) or quality parameters
applied.

South Boulder Mines Ltd - ASX Release

The geological interpretation is used to define the mineralisation domains. All of the mineralisation domains
are used as hard boundaries to select sample populations for variography and grade estimation.
Statistical analysis showed that the domains included outlier values that required top-cut values to be applied.
Top-cut values are chosen based on statistical parameters for that element in each domain and a visual checkof the location of any possible outlier values.
Usually the log probability plots and histogram plots are used to determine the final value used. The top-cuts
generally only affect one or two samples. In some cases, the percentage of the weighted average mass ofmineralised material was cut, due to extreme high value in relatively poorly sampled domains.
Validation of the block model consisted of;• Volumetric comparison of the mineralisation wireframes to the block model volumes• Visual comparison of estimated grades against composite grades• Comparison of block model grades to the input data using swathe plots
As no mining has taken place at Colluli to date, there is no reconciliation data available.
All mineralisation tonnages are estimated on a dry basis. The moisture content in mineralisation is consideredlow, however there is moisture content of up to 40% in the overlying burden unit.
No grade cut-off has been used to report the Mineral Resource at Colluli. Consideration of mining, metallurgicaland pricing assumptions, suggest that any of the currently interpreted mineralised material has a reasonable
prospect for eventual economic extraction.

22

Criteria
Mining factors orassumptions

Metallurgical factors
or assumptions

JORC Code explanation
Assumptions made regarding
possibleminingmethods,
minimum mining dimensions
and internal (or, if applicable,
external) mining dilution. It isalways necessary as part of theprocessofdetermining
reasonable
prospects
foreventual economic extraction toconsiderpotential
minimgmethods, but the assumptions
made regarding mining methods
andparameterswhenestimating Mineral Resources
may not always be rigorous.
Where this is the case, thisshould be reported with an
explanation of the basis of themining assumptions made.
The basis for assumptions or
predictions
regardingmetallurgical amenability. It isalways necessary as part of theprocessofdetermining
reasonable
prospects
foreventual economic extraction toconsider potential metallurgicalmethods, but the assumptions
regardingmetallurgicaltreatment
processes
andparameters
made
when

South Boulder Mines Ltd - ASX Release

Commentary
AMC Consultants is currently preparing mining reports to support a pre-feasibility study (PFS) and definitive
feasibility study (DFS) for Colluli on behalf of STB. Scenarios being considered are conventional open pit using
mechanised mining techniques such as continuous surface mining.
AMC has assumed, based on initial work, that the Colluli deposits are amenable to open-pit mining methods.

Metallurgical studies are well advanced and have delivered highly encouraging results to date. Studies are
ongoing as part of the DFS work.

23

Environmental
factors orassumptions

reporting Mineral Resources
may not always be rigorous.
Where this is the case, thisshould be reported with an
explanation of the basis of themetallurgicalassumptions
made.
Assumptions made regarding
possible waste and processresidue disposal options. It isalways necessary as part of theprocessofdetermining
reaosnbale
prospects
foreventual economic extraction toconsiderthepotential
environmental impacts of theminingandprocessing
operation. While at this stage
the determination of potential
environmental
imapcts,
particularly for a greenfieldproject, may not always be welladvanced, the status of earlyconsideration of these potential
environmental impacts should
be reported. Where these aspects
have not been considered thisshould be reported with an
explanationoftheenvironmental
assumptions
made.

South Boulder Mines Ltd - ASX Release

Environmental studies are underway as part of the PFS/DFS work24

Criteria
Bulk Density

JORC Code explanation
Whether
assumedordetermined. If assumed, the basis
for the assumptions.
If determined, the method used,
whether wet or dry, thefrequency of the measurements,
thenature,size
andrepresentativenessofthesamples.
The bulk density for bulk
material must have beenmeasured by methods that
adequately account for void
spaces (vugs, porosity, etc.,)
moistureanddifferences
between rock and alteration
zones within deposit.
Discuss assumptions for bulk
density estimates used in theevaluation process of thedifferent materials.

Commentary
Bulk density has been estimated from density measurements collected as down-hole LAS survey data(completed by Abitibi-Terratec). The 0.01m readings were composited to 1m intervals for use in the estimate.
Top and bottom cutting of outlier values was performed as required.
No direct core measurements have been taken to date.

The water immersion method is not appropriate for potash deposits, owing to their solubility and collecting
perfectly cylindrical core is also difficult.
The down-hole geophysical collection of density data is most appropriate for Colluli, with adequate validationand porosity factors applied.
The bulk density values applied at Colluli are:
LITHOLOGY OVBD URST USYL MSYLDOMAIN
1000
2000 4100 4200
MEAN
1.40
2.16
2.15
2.22
DENSITY
All values are in t/m3

South Boulder Mines Ltd - ASX Release

25

LSYL
4300
2.15

UCRT
5000
2.12

BSFT
6000
2.09

LCRT
7000
2.07

KANT
8000
2.13

LRST
9000
2.16

CLAY
10000
2.19

Criteria
Classification

Audit or reviews
Discussion ofrelativeaccuracy/confidence

JORC Code explanation
The basis for the classification of
the Mineral Resources into
varying confidence categories.
Whether appropriate accounthas been taken of all relevant
factors (i.e. relative confidence intonnage/grade
estimations,reliability
of
input
data,
confidence in continuity ofgeology and metal values,
quality,quantity
anddistribution of data).
Whethertheresultappropriatelyreflects
theCompetent person’s view if thedeposit.
The results of any audits orreviews of Mineral Resource
estimates.
Where appropriate a statementof the relative accuracy andconfidence level in the Mineral
Resource estimate using anapproach or procedure deemed
appropriate by the Competent
Person. For example, theapplication of statistical or
geostatistical procedures toquantify the relative accuracy of
the resource within the statedconfidence limits, or, if such an

South Boulder Mines Ltd - ASX Release

CommentaryClassification for Colluli is based upon continuity of geology, mineralisation and grade, considering drillholeand density data spacing and quality, variography and estimation statistics (number of samples used andestimation pass).
At Colluli, the core of the modelled Area A deposits is generally well drilled for a potash deposit with a nominal
500m x 500m drillhole spacing in easting and northing directions.
There is also a localised cruciform drilling pattern in the centre of the deposit, designed to test slightly wider inthe better drilled parts of the deposit, averaging 600m to 700m spacing.
In general, the estimates have been classified as Measure Resource where a cluster of drillholes are within
600m of each other, the holes have been assayed and geophysically logged and the confidence in the estimate
is high. Areas classified as Indicated Resource generally have clusters of drillholes within 1.5km of each otherand the remaining areas of the models are classified as Inferred.
AMC believes that the classification appropriately reflects its confidence in and the quality of the grade
estimates.
The previously reported Mineral Resource estimate (Ercosplan 2012) has not been audited, however it has
been reviewed by Snowden Group consultants in 2013 in an unpublished report.
The Mineral Resource classification applied to each deposit implies a confidence level and level of accuracy inthe estimates.

26

approach
is notdeemedappropriate,aqualitative
discussion of the factors that
could
affecttherelativeaccuracy and confidence of theestimate.
The statement should specify
whether it relates to global or
local estimates, and, if, local,
state the relevant tonnages,
which should be relevant totechnical
andeconomic
evaluation.
Documentation
should include assumptions
made and the procedures used
These statements of relative
accuracy and confidence of theestimate should be comparedwith production data, whereavailable.

South Boulder Mines Ltd - ASX Release

These levels of confidence and accuracy relate to the global estimates of grade and tonnes for the deposit.

These ranges relate to the global estimates of grade and tonnes for the deposit.

27