Not sure if this has been posted yet...so many posts on AGS! -...

Not sure if this has been posted yet...so many posts on AGS! - Pie

Source: www.mineweb.net

JUNIOR MINING
IN-GROUND VALUE OF US$3.6B

Four Mile uranium resource excites Alliance but not market speculators

The announcement by Alliance Resources of an initial official resource estimate for the Four Mile West uranium disappointed the market despite a euphoric appraisal by the company.

Author: Ross Louthean
Posted: Wednesday , 09 May 2007

PERTH -

This week's declaration of an initial resource for the Four Mile uranium discovery in South Australia had 30% owner Alliance Resources describing the deposit as "one of the most substantive uranium discoveries in Australia since 1985."

But pending and post announcement, Alliance's share price slipped from near $A2.90 ($US2.40) finishing at trade end today at $A2.11 ($US1.75) and this, no doubt, was due in part to some speculators thinking all their Christmases would come at once.

The first resource figure covers only part of the Four Mile West deposit and not the less-advanced but similarly dimensioned target of Four Mile East, and was 3.9 million tonnes grading 0.37% U3O8, for 32 million pounds of contained U3O8.

What may have deflated some not comprehending that a study late last year by the Lonsec group for Alliance actually incorporated a projection of the likely resources in both the East and West deposits. It was a guesstimate of 20.5 Mt at 0.26% U3O8for a contained 116 M lbs.

Alliance said the initial resource represented an in-ground value of $US3.6 billion ($A4.4 B) for the resource using a spot price for uranium of $US113/lb and $US=$A exchange rate of 0.83 without allowance for metallurgical extraction.

The joint venture has a scoping study underway on Four Mile West to evaluate mining and processing options. Managing the study is 75% project owner Quasar Resources, subsidiary of Heathgate Resources which operates the in-situ leach (ISL) Beverley mine, only 8 kilometres away.

Alliance's chairman, John Dunlop, said the area of the mineral resource estimate had been drilled to an approximate 100 metre square grid, with the uranium mineralisation demonstrating good continuity between holes, and the deposit having an average thickness of 2.2m and grade-thickness of 0.82m% U3O8.

Dunlop said it is important to emphasise the area of about 1km2 covered by this resource statement is within more than 5km2 of potential mineralisation.

"This highlights the potential for the Four Mile project to continue to develop as one of the most significant uranium discoveries in recent exploration history in Australia."

Superlatives have been used by many people to describe this project including normally conservative senior geoscientists and top bureaucrats not noted for effusive statements. For those not aware of this project, then the statement by South Australia's Premier Mike Rann at Paydirt's South Australian Resources & Energy Investment Conference this month that it was "the best (uranium) discovery in the past 25 years" certainly raised the attention level.

While this is only the first resource assessment, the project has a long way to travel to achieve the Lonsec view that it will be rated ahead of any undeveloped uranium project in Australia including Jabiluka in the Northern Territory.

At a recent technical conference in Broken Hill Quasar's exploration manager Geoff McConachy said Four Mile could open up a new geological play in the Lake Frome-North Flinders region of SA.

QUALIFICATION: A member of the writer's family holds Alliance shares.

Ends.

Cheers, Pie