high grade drilling results, page-27

Market malaise fails to budge Alliance Resources despite high grade uranium hits

The Four Mile uranium project in South Australia, already ranked as the best new uranium discovery in Australia this year, failed to provide share price impetus for its junior partner despite the spectacular nature of the new intersections.

Author: Ross Louthean
Posted: Monday , 08 Dec 2008

Link:

PERTH -

The share price of Alliance Resources Ltd (ASX: AGS) failed to budge today despite the 25% partner in the Four Mile project announcing a series of high grade intersections.

Drilling on the Four Mile West deposit included intersections of 2.5 metres grading 0.33% pU3O8, 0.9m @ 1.00% p U3O8, 1.1m @ 0.47% p U3O8, 7m @ 1.27% p U3O8 and 0.8m @ 0.91% p U3O8.

Had these results been announced early this year the market reaction would have been dramatic. Instead the price stagnation reflects how tough times have hit Australia's uranium juniors.

Alliance's new managing director, Patrick Mutz, said the results reinforce the Four Mile project as a high-grade mineralised system with potential for significantly increasing the uranium resource base.

"Mineralisation at Four Mile West remains open to the north, north-east, west, and south-west," he said.

Meanwhile the mineral resource estimate for "a part" of the Four Mile East deposit is in progress and should be completed in January 2009.

The project sits within the shadow of the Flinders Ranges, 550 kilometres north of Adelaide, and is being brought into production by Alliance's 75% partner Quasar Resources, an affiliate of Heathgate Resources which runs the Beverley in situ recovery (ISR) uranium mine only 8 km away. Heathgate in turn is controlled by the big American conglomerate General Atomics.

The Four Mile Uranium Deposit consists of two mineralised zones; Four Mile West and Four Mile East. FMW has an inferred JORC Code resource of 32 million pounds p U3O8. Estimation of the mineral resource for a portion of Four Mile East is in progress.

Less than three months ago Quasar Resources notified Alliance of its "decision to mine" and provided Alliance with a feasibility study recommending uranium mining using ISR technology, with production commencing in January 2010 at a projected rate of 2.6 M lbs p U3O8 per annum and increasing to 3 M lbs within three months of commissioning.

Mutz said the latest drilling followed up on significant drilling results intersected at FMW from July to September and focussed on high-grade uranium mineralisation in the western and northern portions of the deposit.

A total of 18 holes for 3,204m were drilled in October, including 4 diamond holes. Drilling has begun in the north-east of the deposit where the aim is to close off or extend mineralization.
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Cheers to all AGS Holders :)
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