Alliance Resources AGS Thursday, 3 May 2007Impressive uranium...

Alliance Resources AGS Thursday, 3 May 2007

Impressive uranium results from Four Mile ahead of long-awaited resource statement
Recommendation Buy for ongoing re-rating as uranium resources grow
Event
�� Further impressive uranium results received from drilling at the Four Mile
prospect of the Arkaroola project
�� Latest drilling results at the Four Mile West include 9.1m grading 1.84%
U3O8
�� Mineralisation at the Four Mile West prospect is still open to northwest
�� Further drilling results at the Four Mile East include 2.0m grading 1.37%
U3O8
�� Long-awaited initial resource statement being finalised

Impact
In its latest exploration update on the Four Mile uranium prospect in South
Australia, where Alliance Resources (AGS) has a 25% free carried interest
through exploration in the Arkaroola uranium-copper-gold project, which is being
funded and operated by Quasar Resources Pty Ltd (Quasar), AGS has
announced further impressive results. A total of 38 holes were drilled for an
aggregate of 7,589m in the Four Mile prospect during March. The drilling at Four
Mile West was undertaken to validate the prompt fission neutron (PFN)
calibration. This involved the drilling of five twin holes near holes of the initial
infill drilling completed in 2006. The best intercept of this latest confirmatory
drilling was 9.1m grading 1.84% U3O8 but there were other strong results in the
other holes which generally confirmed the previous results. The uranium
mineralisation at Four Mile West remains open to the northwest.
Drilling at the Four Mile East prospect was undertaken as part of a major stepout
drilling program to define the limits of mineralisation, which involved 31
holes. The best intercept from this drilling was 2.0m grading 1.37% U3O8. The
Four Mile East mineralisation remains open in several directions, particularly to
the north.
The Four Mile uranium prospect is continuing to shape up as the best undeveloped
uranium project in Australia and we would expect that the release of
the long-awaited resource statement for the Four Mile West ara would confirm
this position. At this stage it is not possible to know when the resource
statement might become available and while there are suggestions in the market
that it might be in a matter of weeks, given the nature of the doubt over the
assay correlations and the significance of the statement, we think it might not be
available until later than that.
With dimensions of over 1km in length and at least 300 to 600m in width, we
estimate there could ultimately be a very substantial resource defined at the Four
Mile West area, possibly as much as 75,000 tonnes of U3O8 , but we would
expect the initial resource statement might contain about half this amount given
the incompleteness of the work and uncertainty of some of the assays. Our very
preliminary estimate of the economic significance of the total potential resources
at the Four Mile prospect indicates they could have a Net Present Value to AGS
of the order of $3.20 to $4.40. With ongoing exploration and evaluation, we
would expect the resources at Four Mile to continue to grow over the next year
or so.
Quasar has appointed and engineering and environmental firm to conduct a
scoping study following the release of the pending Four Mile West mineral
resource estimate. Quasar has advised that the scoping study may take about
eight weeks to complete and it will be followed by a pre-feasibility study to
assess in detail mining and infrastructure and related options.