Colluli: the Untapped Potential of the Danakil
Paul Donaldson – CEO and Managing Director

Important Notice
FORWARD LOOKING STATEMENTS
The information in this presentation is published to inform you about South Boulder Mines (the “Company” or “STB”) and its activities. STB has endeavoured toensure that the information in this presentation is accurate at the time of release, and that it accurately reflects the Company’s intentions. All statements in thispresentation, other than statements of historical facts, that address future production, project development, reserve or resource potential, exploration drilling,
exploitation activities, corporate transactions and events or developments that the ‘Company expects to occur, are forward-looking statements. Although theCompany believes the expectations expressed in such statements are based on reasonable assumptions, such statements are not guarantees of future performanceand actual results or developments may differ materially from those in forward-looking statements.
Factors that could cause actual results to differ materially from those in forward-looking statements include market prices of potash and, exploitation and exploration
successes, capital and operating costs, changes in project parameters as plans continue to be evaluated, continued availability of capital and financing and general
economic, market or business conditions, as well as those factors disclosed in the Company's filed documents.
There can be no assurance that the development of the Colluli Project will proceed as planned. Accordingly, readers should not place undue reliance on “forwardlooking information.
To the extent permitted by law, the Company accepts no responsibility or liability for any losses or damages of any kind arising out of the use of any information
contained in this presentation. Recipients should make their own enquiries in relation to any investment decisions.
COMPETENT PERSONS AND RESPONSIBILITY STATEMENTThe Colluli Potash Project has a current JORC/NI43-101 Compliant Measured, Indicated and Inferred Mineral Resource Estimate of 1,079.00Mt @ 17.97% KCl or
11.35% K2O (total contained potash of 194.09Mt KCl or 122.61Mt K2O). The resource contains 261.81Mt @ 17.94% KCl or 11.33% K2O of Measured Resources,674.48Mt @ 17.98% KCl or 11.36% K2O of Indicated Resources and 143.50Mt @ 18.00% KCl or 11.37% K2O of Inferred Resources.
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis thatthe information has not materially changed since it was last reported by independent consultants ERCOSPLAN and announced by South Boulder on 16 April 2012.
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Greg Knox using estimates supplied bySouth Boulder Mines Ltd under supervision by Ercosplan. Dr Henry Rauche and Dr Sebastiaan Van Der Klauw are co-authors of the JORC and NI43-101 compliant
resource report. Greg Knox is a member in good standing of the Australian Institute of Mining and Metallurgy and Dr.s’ Rauche and Van Der Klauw are members ingood standing of the European Federation of Geologists (EurGeol) which is a “Recognised Overseas Professional Organisation” (ROPO). A ROPO is an accreditedorganisation to which Competent Persons must belong for the purpose of preparing reports on Exploration Results, Mineral Resources and Ore Reserves forsubmission to the ASX.
Mr Knox, Dr Rauche and Dr Van Der Klauw are geologists and they have sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Knox, Dr Rauche and Dr Van Der Klauw consent to the inclusion in the report of thematters based on information in the form and context in which it appears.

Page 2

Corporate Overview
Capital Structure
Ordinary Shares
Share price (at 01-Jun-14)
Market Capitalisation
Cash (at 01-Jun-14)
Options and Performance Rights

Shareholder Breakdown

Page 3

Share Price
129.0m
$0.17$21.79m$9.3m
22m

Directors and Management

Page 4

Paul Donaldson, CEO and Managing Director

James Durrant, Project Coordinator

Mr Donaldson was appointed to the role of Chief
Executive Officer in February 2013. He joins South
Boulder Mines from a series of senior management
roles with BHP Billiton. Mr Donaldson has experience inlarge scale open cut mine management, supply chain
logistics, mineral processing, business improvement andmarketing.

Mr. Durrant joined South Boulder Mines after a seriesof operational roles within BHP Billiton. With tertiary
qualifications in both mechanical and mining
engineering, Mr. Durrant brings project management,
organisational design and operational managementof large scale open cut mines skills to theorganisation.

Seamus Cornelius, Non Executive Chairman

Liam Cornelius, Non Executive Director

Mr Cornelius has 21 years of corporate experience inboth legal and commercial negotiations. He has been
based in Shanghai and Beijing since 1993, where hehas been living and working as a corporate lawyer.
From 2000 to 2011 Mr Cornelius was an international
partner with one of Australia’s leading law firms,
specialising in cross border investments in the energy
and resource sectors.

Mr Cornelius graduated from Curtin University ofTechnology with a BAppSc in Geology. He has been
involved in the exploration industry within Australiaand Africa for 18 years. As a founding member ofSouth Boulder Mines, Mr Cornelius has played a keyrole in outlining areas of interest for the company.

Tony, Kiernan, Non Executive Director

Zeray Leake, Country Manager

Mr Kiernan was previously a commercial lawyer andis currently Chairman of the Australian iron ore
producer BC Iron Ltd (ASX:BCI) and a non-executive
director of several listed mining companies including
Chalice Gold Mines Ltd (ASX: CHN), which has been
operating in Eritrea since 2009.

Mr Leake is a Geologist with over 12 years experiencein the development and exploration of potash, gold,base metals and industrial minerals.
Mr Leake previously worked for the Geological
Survey of Eritrea.

Colluli Project SummaryPage 5Large resource with long life
Close proximity to coast
Shallow mineralisation
Low capital intensity
Premium Potash Fertiliser (Sulphate of Potash)
Favourable geography relative to key markets
Strategic National Project in JV with Eritrean
National Mining CompanyPotash and Demand Drivers
Potash is a generic term used todescribe a variety of potassium
bearing minerals and manufactured
chemicals used primarily as fertiliser.
Key drivers of growth
1. Increasing global population: +80 million people annually
2. Decreasing arable land
3. Changing dietary preferences

Page 6

Potash comes in a variety of forms
Muriate of Potash (“MOP”)

Sulphate of Potash (“SOP”)

Potassium chloride
Most common form of potash
Can be harmful to sensitive crops

SOP
6.0Mt
10%

SOP-M NOP
1.3Mt 1.4Mt
2%2%

Contains both potassium and sulphur
Used principally for specialty crops suchas fruits, vegetables, nuts, beans
Chloride freePotassium
Fertiliser
MarketSulphate of Potash Magnesia (“SOPM”)

Potassium Nitrate(“NOP”)
Provides both potassium and nitrogen
Used for chloride sensitive crops that
require additional nitrogen

MOP
55.0 Mt
86%

Specialty Fertiliser
Used as a source of potassium, sulphur
and magnesium
Used for high value crops

Source: UN FAO, BMO Capital Markets

Page 7Colluli Resource Overview
Colluli at a GlanceLocationSouth Eritrea

Size

Approximately 400km2

Product

Sulphate of Potash
Muriate of Potash

Resource

Measured:
Indicated:
Inferred:
Total:

Potassium
Bearing Salts

Sylvinite:
110Mt
Carnallitite: 309Mt
Kainitite:
597Mt

Process

Flotation/Solar
EvaporationStage

PFS Level Testwork
Program Underway

Page 8

262Mt
581Mt
173Mt
1016MtRevised Strategy - All Potassium Salts
Original
Feasibility Case

Staged Development

Current Strategy
All Potassium-salts case

Feed

Sylvinite

Sylvinite/Carnallitite

Sylvinite/Carnallitite/Kainitite

Strip ratio
Waste:Ore

14:1

7:1

2.5:1

Average Seam Thickness (Area A)m4.41

15.32

23.28

Mining Cost
US$ per tonne product19512275

ProductPotassium
Chloride

Potassium Chloride

Potassium sulphate

Processing Cost per tonne product(US$)

6051TBA

Potential Life (yrs) of Project@1Mtpa17+50+200

Revenue Per tonne product
STB Price Forecast ($US/tonne FOB )Current price ($US/tonne FOB)

Source: STB scoping study reports

Page 9KCl450310

450310450310

K2SO4562600

Mineralisation Favours SOP Production
SOP carries price premium overMOP
Different industry structureand supply-demand drives
have resulted in improved pricestabilityColluli has the potential toproduce SOP, SOPM and MOP

Source: Compass Minerals, FOB mine gates
Potash Corp. MOP Prices*Compass Minerals average selling prices were converted from shorttons to metric tonnes @ 1.1023 short tons=1metric tonne

Page 10

Ease of Access to Resource
Accessible Deposit

Road from Massawa to Colluli

Colluli Camp

Excavation Equipment at Colluli

Exploration Drill Rig

Drill Collar at Colluli

The Colluli Deposit

No clearing required, flat topography, no community relocation issues

Page 11

Well supported
In close proximity to key infrastructure

350km from Asmara

180km from Massawa

35km from nearest communityand operating in an environment with in country mining support

In Eritrea since 1994

Page 12In Eritrea since 1996

In Eritrea since 1994

Colluli - A National Strategic Project
The Colluli Project is 100% owned by the Colluli Mining Share Company (CMSC)
Ownership
STB

50%

ENAMCO

50%

Board Composition
STBENAMCO

32Funding Prior to First Production
Debt

CMSC will seek to borrow up to 70% of development costs from a third party bank or lenderEquity

 The required equity funds for development will be contributed by STB.
 50% of the equity contribution will be preferentially paid back from 50% of the available funds
after annual payment obligations to third parties have been satisfied.
 The remaining 50% will be available for profit distribution to CMSC shareholders

After First Commercial Production
Funding

Page 13

Funds where required shall be financed by CMSC either through its own internal cash or from debt
funding decided by the board

Eritrea – NE Africa

Population:
Capital :
Area:
GDP:

Page 144,000,000
Asmara117,600km2
US$3b

Colluli resource Area = 400km2 70km from coast 110m below sea level

Favourable Proximity to Key Markets

Distance To: (Nautical Miles)

Page 15

Nanjing, China

Kandla, India

From Colluli

6,450

1,960

From SK, Canada

5,300

9,880

From Urals, Russia

11,9607,470

An emerging mining industry
1 Mining Project in Production• First mining operation to come into production with theBisha Project

Construction of the Bisha
Project

3 Projects under Development
Zara Project

11 Exploration Projects
11 Exploration
Projects
Source:•Rotainer loading at Massawa

Precious and base metals exploration projects continue tothe major source of interest in the country

Company Announcements.

Equipment storage at Colluli

Page 16

Key Milestones
Milestones

2014E
Q2

Metallurgical Testwork
Preliminary Feasibility Study
Finalise the resource
Feasibility Study
Social Environmental Impact
Assessment
Mining License Application
Funding
Detailed Engineering
Phase 1 Construction

Page 17

Q3

Q4

2015E
Q1

Q2

Q3

2016E
Q4

Q1

Q2

Q3

Q4

SummaryPage 18

Large scale, long life resource
Shallow mineralisation
Low capital intensity
Premium Potassium Fertiliser Potassium Sulphate
Favourable geography
Strategic National Project in JV with Eritrean
National Mining Company