Major resource upgrade for Australian mine

29 June 2009

The Beverley Four Mile uranium project in South Australia has nearly doubled its known resources as it approaches start up in seven months.

 

Alliance Resources has announced, as expected, an increase in known resources to 28,000 tonnes of U3O8, at relatively high grade (average 0.35%).  This is JORC-compliant inferred resource category. Four Mile consists of two orebodies about two kilometres apart, and both remain open, with potential for further resource upgrade. There are three mineralised layers between 190 and 210 metres deep, ranging from 1.1 to 7.3 metres thick and with grades up to 1.74% U3O8.

 

Patrick Mutz, managing director of Alliance, said the results had exceeded expectations: "The combined grades from Four Mile East and Four Mile West have the potential to make the Four Mile Uranium Project the highest grade operating uranium mine in Australia and as we move toward first production early next year, the highest grade and largest ISR operation in the world, with likely favourable affects on project economics."

 

The Four Mile project is 550 kilometres north of Adelaide, and contiguous with Heathgate Resources' Beverley mine leases. Beverley has been operating for nine years as Australia's only in-situ leach (ISL) mine. Four Mile's two orebodies have been explored by Quasar Resources, an affiliate of Heathgate Resources. Quasar has thus earned a 75% interest in the joint venture and is manager of the project.

 

Quasar applied for a mining lease in May 2008 and made a decision to proceed with ISL mining and provided Alliance with a feasibility study in September that year. An environmental assessment was published in January 2009. Subject to permits, it is planned to commence production in January 2010, ramping up to 1360 tonnes U3O8 per year within three months. Uranium recovery will be through a satellite ion exchange plant at Four Mile, then trucking the loaded resin to the main Beverley plant for stripping (elution) and precipitation.

 

Early this year, Alliance published estimated project costs of A$90 million as determined by Quasar in its feasibility study.  Forecast total cash costs, including royalties, were A$38.80 per pound U3O8 (about $25/lb U3O8).

 

On the other side of Lake Frome, Uranium One in joint venture with Mitsui (49%) is planning to start mining the long-delayed Honeymoon ISL deposit in mid 2010.  It has indicated resources of 2900 tonnes U3O8 at 0.24%.  Commercial production at 400 tonnes per year is envisaged in 2011, with project capital cost of A$118 million ($95 million). However, the plant, including pulsed column solvent extraction circuit, is modular and can later be relocated to the company's other deposit at Gould's Dam if required. 

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