Alliance Resources uranium focus is on the Arkaroola project (Mt painter area in SA), where the company has a 25% ownership of the Beverley 4 Mile uranium deposit. Quasar Resources a subsidiary of North American Heathgate Resources controls 75% of the project and have committed a $14m exploration budget for the deposit and surrounding area. The 4 Mile project consists of 4 Mile West (most intensively drilled) 4 Mile East (400m x 400m drill spacing) and 4 Mile South. While the company was expecting to release a resource statement for the 4 Mile West deposit, this is not expected for a further few months. The issues with the resource are based on calibration issues with the Quasar calculations. The company suggested that the current deposit has a 3m - 9m thickness and commences at 140m at its shallowest point below surface and is at 210m below surface at its deepest point. Given these attributes the company indicated that at current prices and the +1% U3O8 grades an open pit would not be unfeasible, insitu leaching is also a well tried technology currently being adopted at Beverley. Alliance highlighted that the 4 Mile East deposit was very leachable and would also extend the resources and mine life.
While not stating a resource figure Alliance indicated that a figure within the 44,000t – 52,000t band would not be unexpected. The resource when it is finally released will only represent some 20% of the mineralized area.
View: It is clear the 4 Mile resources are very large and very high grade, given the association with Quasar and the expenditure we would expect a solid resource statement albeit one that only represents a portion of the mineralization. This deposit has a high likelihood of becoming one of the next developed uranium mines in Australia.
AGS Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
