New Australian mine project for fast track

29 April 2008

In the light of recent "outstanding exploration success" this year and encouraging metallurgical test work, Quasar Resources has decided to proceed directly to mining its Four Mile East deposit in South Australia. The first stage of mining will commence as soon as a lease is granted, probably in late 2009.

Beverley Four Mile comprises two deposits 5-10 km northwest of the Beverley mine and is being explored by Quasar Resources (affiliated with Heathgate Resources). Alliance Resources is a 25% free carried joint venture partner in the Four Mile Uranium Project. An "initial resource estimate" of 15,000 tonnes uranium oxide (U3O8) at 0.37% was announced in May 2007 for the west deposit. This subsequently became classified as 'inferred resources' under the JORC code. Alliance Resources announced in January preliminary indications of a similar resource is in the east deposit.
Alliance also announced a concept study for the project with in-situ leach (ISL) mining commencing in 2010, if resources in the eastern deposit materialised in an initial JORC resource estimate. This estimate is expected in the third quarter of 2008.

However, the concept study has been overtaken by "outstanding" - but not yet properly quantified -drilling results on the east deposit.

Quasar has decided to apply for a mining lease and proceed as soon as possible - probably in late 2009 - on the east deposit. A feasibility study for the mine was brought forward, making the planned field leach trial on the west deposit redundant. First stage production is envisaged as 680 tonnes per year U3O8, rising to 2000 tonnes per year by stage three.
The proposed initial mining area now has over 50 drill holes at production spacing, and grades are being measured with a prompt fission neutron (PFN) tool, giving much more confidence than gamma logging. 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.
Two possibilities for uranium recovery are piping the loaded solution six kilometres to the Beverley plant for recovery, or having an ion exchange plant at Four Mile and trucking the loaded resin to Beverley for stripping (elution) and precipitation. Remote ion exchange such as this is being used in Wyoming and Texas in the USA, in the former as toll milling.