11th SEPT.2007 BELL POTTER SECURITIES LTD. LATEST RESEARCH...

11th SEPT.2007 BELL POTTER SECURITIES LTD. LATEST RESEARCH REPORT.
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ALLIANCE RESOURCES (AGS) ---- Speculative Buy
Making progress at the Four Mile uranium project.

Focus moves to the Four Mile East Zone.
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During the June quarter uranium explorer AGS shifted its drilling focus to the Four Mile East Zone, utilising up to four drill rigs, with the aim of delineating a mineral resource during 2007. Drilling continues to deliver spectacular intersections of high grade uranium mineralisation over a 1200m strike length, with mineralisation open along the north-west and south-east trend of mineralisation. Intersections include 5.4 metres grading 0.85% pU308, 1.2 metres grading 1.11% pU308 and 2.4 metresgrading 0.62% pU308.


Initial resource announced at the Four Mile West Zone.
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Quasar Resources Pty Ltd and AGS have announced an initial resource of 15,000 tonnes of uranium oxide (U308), at a stunning grade of 0.37% U308. In our view, this number represents a high grade core within a substantially larger lower grade resource and may represent that part of the resource potentially amenable to extraction by insitu leaching (ISL) (amenability to ISL has not been determined or disclosed at this stage.


A real chance of development at Four Mile.
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We continue to regard AGS as one of the more promising emerging uranium companies, with a real possibility of development at the Four Mile (Arkaroola) project in South Australia.
The project has the advantages of location adjacent to the operating Beverley ISL uranium mine (operated by Quasar) and within the uranium mining supportive state of South Australia.


Maintain Buy (Speculative) recommendation with a revised price target of $2.17
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We maintain our Buy (Speculative) recommendation with a revised assessed value of $1.45

(previously $1.70) and set a price target at $2.17

(previously $3.40), where we use a 50%

premium to assessed value in determining target price. Our modelling now assumes potential ISL extraction at the Four Mile East Zone and our revised target reflects the lower trading levels relative to assessed value now seen in AGS’ uranium peer group.
In view of the early development stage of the Four Mile uranium project, where ongoing work continues to delineate resources but has not yet determined amenability to ISL extraction, an investment in AGS remains speculative in nature and more suitable for investors with a higher tolerance for risk.

Cheers To All AGSers

ITS A BUY :)