bhp takeover, page-10

RIO Tinto subsidiary ERA has flagged a big resource upgrade at the Ranger uranium mine.

The upgrade will kick off what is expected to be a series of exploration updates as it fends off BHP Billiton's takeover bid.

ERA, which is 68.4 per cent-owned by Rio Tinto, said it was exploring a target, Ranger Deeps, to the east of the mine that could yield up to 40,000 tonnes of uranium, worth about $US4.2 billion. ($6.4billion).

The traditionally conservative Rio is understood to have told its global exploration teams to shore up information on deposits as the company prepares for BHP's $US90 billion bid to go live in January if approved by EU regulators.

The deposit at Ranger has been drilled over the past two years but this year an extension, which is not as deep, was found, ERA said. ERA said it would continue drilling this year until it had enough information to form a mineral resource in accordance with Australian standards.

An ERA spokeswoman said the company was aiming for a resources statement by the end of the year.

She said it was too early to say whether the resource, which could be developed as an open pit or underground mine, would be used to boost production or extend the life of the mine.

Ranger, which is in Kakadu National Park in the Northern Territory, is currently scheduled to finish in 2020.