Impressive uranium results from Four Mile ahead of long-awaited resource statement Recommendation Buy for ongoing re-rating as uranium resources grow Event Further impressive uranium results received from drilling at the Four Mile prospect of the Arkaroola project Latest drilling results at the Four Mile West include 9.1m grading 1.84% U3O8 Mineralisation at the Four Mile West prospect is still open to northwest Further drilling results at the Four Mile East include 2.0m grading 1.37% U3O8 Long-awaited initial resource statement being finalised
Impact In its latest exploration update on the Four Mile uranium prospect in South Australia, where Alliance Resources (AGS) has a 25% free carried interest through exploration in the Arkaroola uranium-copper-gold project, which is being funded and operated by Quasar Resources Pty Ltd (Quasar), AGS has announced further impressive results. A total of 38 holes were drilled for an aggregate of 7,589m in the Four Mile prospect during March. The drilling at Four Mile West was undertaken to validate the prompt fission neutron (PFN) calibration. This involved the drilling of five twin holes near holes of the initial infill drilling completed in 2006. The best intercept of this latest confirmatory drilling was 9.1m grading 1.84% U3O8 but there were other strong results in the other holes which generally confirmed the previous results. The uranium mineralisation at Four Mile West remains open to the northwest. Drilling at the Four Mile East prospect was undertaken as part of a major stepout drilling program to define the limits of mineralisation, which involved 31 holes. The best intercept from this drilling was 2.0m grading 1.37% U3O8. The Four Mile East mineralisation remains open in several directions, particularly to the north. The Four Mile uranium prospect is continuing to shape up as the best undeveloped uranium project in Australia and we would expect that the release of the long-awaited resource statement for the Four Mile West ara would confirm this position. At this stage it is not possible to know when the resource statement might become available and while there are suggestions in the market that it might be in a matter of weeks, given the nature of the doubt over the assay correlations and the significance of the statement, we think it might not be available until later than that. With dimensions of over 1km in length and at least 300 to 600m in width, we estimate there could ultimately be a very substantial resource defined at the Four Mile West area, possibly as much as 75,000 tonnes of U3O8 , but we would expect the initial resource statement might contain about half this amount given the incompleteness of the work and uncertainty of some of the assays. Our very preliminary estimate of the economic significance of the total potential resources at the Four Mile prospect indicates they could have a Net Present Value to AGS of the order of $3.20 to $4.40. With ongoing exploration and evaluation, we would expect the resources at Four Mile to continue to grow over the next year or so. Quasar has appointed and engineering and environmental firm to conduct a scoping study following the release of the pending Four Mile West mineral resource estimate. Quasar has advised that the scoping study may take about eight weeks to complete and it will be followed by a pre-feasibility study to assess in detail mining and infrastructure and related options.
AGS Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held