South Boulder Mines is a exploration company operating in Australia with tenements that cover areas prospective for phosphate, potash, nickel, gold, and uranium. Increases in demand and prices for bulk fertilizer have prompted South Boulder to switch its exploration focus away from gold, nickel and base metals. Since February the company has acquired a number of phosphate and potash projects that have the potential to produce economic resources. Prices for potash and phosphate are booming as they are key ingredients in fertilizer production, prompting a flare up in sentiment towards the sector. It is very early days at South Boulder and production is not yet in sight, however in the stocks favour is the location of its projects and its very small market capitalisation of just $13.36m.

Background
The company’s primary asset is the 100% owned Lake Disappointment East Potash project, which is conveniently located right next to Reward Mineral’s (ASX code: RWD) Potash deposit which hosts a JORC compliant potash resource of over 27Mt. The company is still awaiting the official grant of an exploration license to commence ground work, however we view this as simply a formality. The company has already overcome any impediments to attaining the grant by securing an access agreement with the native land owners that permits exploration. Once the license has been granted drilling will commence, possibly in September, to define a JORC resource which could be announced as early as the end of this year. It is important to note that a separate agreement will need to be struck with the land owners if the company decides to proceed with a mining campaign in the future.

Investment Summary
Since re-defining itself South Boulder has acquired 4 phosphate and potash areas in Western Australia and the Northern Territory. In Western Australia the company has prospective licenses in Lake Disappointment East, Cardabia, and in The Canning Basin. In Northern Territory the company is vying for 7 licenses within the Georgina Basin. The company has 4 prospects in Cardabia covering 1,466 square kilometres. Drilling by CRA Exploration Pty Ltd in 1989 – 1990 returned results mostly ranging from 20% to 35% P205. STB is currently awaiting a mining grant and once this is given exploration work will begin which should happen later this year. In The Canning Basin the company has 4 prospects, one for phosphate and three for potash. At the phosphate project one drill hole was made in the 1980’s which intersected low grade phosphate at depths but higher grade phosphate may exist closer to surface. Exploration for potash was conducted by BHP in the early 1980’s. At the moment South Boulder is still awaiting native title and a mining grant. Finally, the company recently applied for 7 prospective licenses within the Georgina Basin of the Northern Territory covering 5,762 square kilometres. The licenses are yet to be awarded, but are in close proximity to known phosphate deposits with the most famous one being Minemakers (ASX code: MAK) Wonarah deposit which has a JORC resource of almost 2 billion tonnes at 14.4% P2O5. STB resides in the same building in Perth as Minemakers and shares a Director. Exploration by a previous owner has returned drilling results of 6.1m at 15.6% phosphate from 49m and 3.8m at 13% phosphate from 53m.