Start-up plan for Four Mile

Thursday, 25 October 2012

The Four Mile uranium project in South Australia will start up by mid-2013 under a plan approved by majority owner Quasar Resources - but contested by minority owner Alliance Resources.

Alliance holds 25% of the Four Mile project, which has total indicated and inferred resources of 32,000 tonnes U3O8 (27,000 tU) at an average ore grade of 0.33%. The project is managed by Heathgate Resources affiliate Quasar, the registered holder of the remaining 75%. Quasar and Heathgate are both subsidiaries of US-based General Atomic Technologies Corp.

Quasar has now unilaterally approved a plan to recommence development of Four Mile, with ISL production from the east orebody starting in the second quarter of 2013, using its nearby Pannikin satellite plant and trucking the loaded resin to Heathgate's main plant about 8km away for product recovery. The cost estimate is A$98 million ($102 million), with production in the first year about 970 tonnes U3O8. First uranium sales are scheduled for the third quarter of 2013.

Quasar has described the start-up plan as "a staged commencement of mining operations, the purpose of which is to permit actual production rates to be considered before full-scale production facilities are constructed."

However, Alliance would prefer not to ship resin to Heathgate's plant, saying it "still considers the construction of an appropriately sized stand-alone plant at Four Mile to produce a better outcome" for the company.

Quasar's decision appears to short-circuit on-going Federal Court proceedings by Alliance seeking restitution of its full ownership of the deposit due to delays and disagreements.

In May, Alliance announced that it had agreed to form a strategic alliance with Japanese trading house Itochu Corporation. Under the terms of the alliance, Itochu will have the right to acquire a 14.9% shareholding in Alliance within six months of all litigation in relation to the Four Mile project being finally determined. Furthermore, within 12 months of that final determination, Itochu will have an option to acquire a further 25.1% shareholding in Alliance.

If Itochu exercises both options, Alliance said that the funds raised would be sufficient to fully fund the construction of a stand-alone ISL and uranium processing plant at Four Mile, independently of Heathgate Resources and removing the need for toll treatment at Heathgate's adjacent Beverley plant.

Researched and written
by World Nuclear News