decision to mine, page-2

FOUR MILE URANIUM PROJECT - DECISION TO MINE
„X Feasibility Study recommends development of the Four Mile project using In-Situ Recovery (ISR) methods as the optimum basis for development.
„X Uranium concentrate production proposed to commence in January 2010, ramping up to 3M lbs U3O8 per annum within three months.
„X It is proposed to construct a satellite pre-processing plant close to the Four Mile deposits to recover uranium from ISR mining solutions for transport to the existing Beverley uranium processing facility for further processing, drying and packaging of uranium concentrate.
The Directors of Alliance Resources Limited (Alliance) are pleased to announce that the Four Mile project joint venture partner and manager, Quasar Resources Pty Ltd (Quasar), has given notice of a decision to mine in accordance with the exploration joint venture agreement between Alliance and Quasar. The decision will have effect on 22 October 2008. Quasar has provided Alliance with a feasibility study performed by Heathgate Resources Pty Ltd (Heathgate) and compiled by URS Australia Pty Ltd based on information provided by Heathgate and Quasar, including a preliminary program and budget prepared by Quasar. Subject to obtaining all necessary regulatory approvals, the feasibility study recommends initial development of the Four Mile project using ISR methods, involving the construction of a satellite pre-processing plant close to the Four Mile deposits to recover the uranium, and utilizing the existing Beverley uranium processing facility for further processing, drying and packaging of uranium concentrate. Use of the Beverley plant is subject to an appropriate agreement on commercial terms with Heathgate Resources Pty Ltd, the owner/operator of that plant, and the Quasar-Alliance joint venture. Uranium concentrate production is proposed to commence in January 2010 at a projected production rate of 2.6M lbs U3O8 per annum and increasing to 3M lbs U3O8 per annum within three months. The feasibility study assumes the production licence applicable to the Beverley plant will not need to be increased in order to accommodate Four Mile production. Alliance will now commence a detailed consideration of the feasibility study and other available information in order to make an informed decision in relation to participating in the project.