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http://www.adelaidenow.com.au/business/sa-uranium-miner-alliance-resources-looks-to-snub-its-partner-on-four-mile-project/story-e6frede3-1225894473470

ALLIANCE Resources is investigating building a $168 million uranium processing plant at Four Mile, as the stalemate between the project's joint venture parties shows no sign of resolution.

The announcement comes as Alliance launches further legal action against Quasar and affiliate Heathgate, accusing it of misleading practices under the Trade Practices Act.

The two parties had been developing a $110 million uranium mine near Beverley, which was expected to be in production this year as the state's next major mine.

The new mine was to be a "satellite" operation connected to the Heathgate-owned Beverley uranium mine, but last year the development was shelved because of a legal dispute over native title registration.

Alliance, which is the 25 per cent joint venture partner with Quasar Resources and affiliate Heathgate, has now announced it is investigating spending $168 million to proceed with a five million pound-a-year mineral processing plant of its own.

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Quasar had estimated a satellite uranium processing plant for Four Mile connected to the existing Beverley operation would cost $98 million and would be able to process three million pounds of uranium oxide per annum.

Alliance says an additional $33 million would be needed for a similar sized stand-alone processing plant, requiring an additional 11 months for payback.

However, Alliance says it is also interested in pursuing a larger operation, capable of processing five or seven million pounds a year.

"In relation to the five million and seven million pound per annum stand-alone plant options, Alliance anticipates significant decreases in respective operating costs, representing further savings," Alliance chief executive Steve Johnston said.

"(The scoping study's) estimates of capital and operating costs indicates to Alliance that the Four Mile project offers a significantly greater return if developed as a stand-alone project with a production rate of 5 million pounds per annum."

The company said it would proceed with an optimisation study for the design, capital and operating cost estimates for the new plant.

Coinciding with the announcement, Alliance also announced it was seeking damages and restitution from Quasar of the 75 per cent interest in the exploration licence over the Four Mile area.

"(Alliance) contends that Quasar engaged in misleading or deceptive conduct . . . (and) also contends that Quasar - with the assistance or participation of Heathgate - breached its obligations under the joint venture agreement," it said.

The company said it was taking action "to protect its rights and the longer-term interests of its stakeholders, including Alliance's shareholders, the Australian and South Australian governments and indigenous native title holders."

As the stoush continues, the "outstanding" mineral deposit at the site - which is expected to rank among the top-10 producing uranium mines in the Western world - remains unexploited.

Quasar said it would respond in due course to Alliance's statements.