JOHANNESBURG (miningweekly.com) – Three directors of Energy Resources of Australia (ERA), including chairperson Peter McMahon, have resigned from the ASX-listed company’s board, over differing views on the future of the Ranger 3 Deeps project, in the Northern Territory.
In tendering their resignations, McMahon and the two other outgoing directors, Dr Helen Garnett and Dr David Smith, said it was difficult for ERA to pursue its goals without the support of Rio Tinto.
ERA, in which Rio Tinto holds a 68.4% stake, earlier this month announced that it had abandoned its planned Ranger 3 Deeps underground project, citing weak uranium prices. Rio Tinto had subsequently announced that it did not support any further study or the future development of Ranger 3 Deeps, owing to the project’s economic challenges.
The outgoing directors said that, while the ERA board had decided that the Ranger 3 Deeps project would not proceed to the final feasibility study at this time, the board believed that an extension of the Ranger authority would allow ERA to revisit the Ranger 3 Deep project’s economics over time.
“Given the differing views on the future of the Ranger 3 Deeps project, it is difficult for ERA to pursue its stated approach without the support of its major shareholder, Rio Tinto,” McMahon, Garnett and Smith stated.
The Ranger 3 Deeps project considered the development of an underground mine to recover uranium from the Ranger 3 Deeps mineral resource, with most of the mining occurring between 200 m and 500 m below the ground.
It was estimated that the mine would run for a period of five years, and first production had initially been targeted for late 2015, pending board and regulatory approval.
The ERA board was handed the A$57-million Ranger 3 Deeps prefeasiblity study at the end of last year, and conducted a review of the study during the first quarter of 2015.
ERA said in a statement that it had appointed Andrea Sutton as interim chairperson and that it had started a search for replacement independent nonexecutive directors.
The company was also in the process of assessing whether its assets might be impaired.
Rio Tinto warned earlier that it was assessing a potential noncash impairment charge of some $300-million in relation to its shareholding in ERA.