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Junior explorer Alliance Resources says a scoping study will be conducted over the Four Mile uranium project in South Australia immediately following the release of an inaugural resource estimate.

Alliance said the scoping study is expected to take about eight weeks to complete and would lead to a pre-feasibility study and mining lease applications in 2007.

The news pushed Alliance shares to a twelve month high of $2.57 before the stock pulled back to $2.32, or 13.17 per cent higher by 1159 AEST.

The Four Mile project is part of the Arkaroola joint venture between Alliance, which holds a 25 per cent stake, and Quasar Resources, which holds the balance.

Four Mile is located about 8km west of the Beverley uranium mine in South Australia.

"We have been advised by Quasar that the mineral resource estimate for the higher-grade mineralisation at Four Mile West is well advanced, with drilling continuing on the large, lower-grade Four Mile East deposit," Alliance chief executive Steve Johnston said.

"Highlighting its commitment to the project, Quasar has commissioned a consultancy firm to conduct a scoping study following the release of the inaugural resource estimate.

"Once underway, this scoping study is expected to take approximately eight weeks to complete and will lay the foundations for a pre-feasibility study to assess in detail mining and infrastructure options, engineering and process options and to progress environmental and other approvals."

Quasar Resources is an affiliate of Canadian outfit Heathgate Resources, the operator of the Beverley uranium mine.