Name and Location
Four Mile uranium project, Australia.

Client
The project is a joint venture (JV) between Quasar Resources (75%), an affiliate of Heathgate Resources, and Alliance Resources (25%).

Project Description
The Four Mile project could become the highest-grade and largest operating in situ recovery (ISR) mine in the world. The project is located 550 km north of Adelaide, in South Australia. The sandstone-hosted deposit is defined by two mineralised zones within tertiary sediments, Four Mile East and Four Mile West, which occur within laterally extensive sands 140 m to 210 m deep.

It is envisaged as an on-site recovery-style mining operation, with uranium to be captured at Heathgate Resources’ Pannikan satellite plant, and elution, precipitation, drying and packing to take place at Heathgate’s Beverley processing plant.

The project is estimated to host a total mineral resource of 9.8-million tonnes, grading 0.44% uranium oxide (U₃O₈) for 71-million pounds of U₃O₈.

The project is expected to produce about 2.12-million pounds of U₃O₈.

Net Present Value/Internal Rate of Return
Not stated.

Value
A$97.8-million.

To date, about A$120-million has been invested in the project.

Duration
South Australian Premier Jay Weatherill officially opened the Four Mile uranium mine on June 26, 2014.

Latest Developments
Alliance Resources has rejected a A$57.6-million offer from its JV partner Quasar that will enable Quasar to gain full control of the Four Mile uranium project.

The offer was made for Alliance’s 25% share of the project and for its share of the U₃O₈ concentrate already produced at the mine.

However, Alliance has said that internal and external valuations hadve estimated the value of its share of U₃O₈ concentrate, mined to the end of December, to be about $20-million. It therefore regards Quasar’s offer as significantly below fair market value.

Quasar has indicated that it is not prepared to increase its offer price.

Alliance has said that the company remains open to selling its interest in the project, should an appropriate offer be made.

In November last year, Alliance decided not to contribute to the 2015 capital expenditure planned for the Four Mile project, after the budget had been passed without its support, and after Quasar had refused to sell Alliance’s share of the Four Mile product, depriving the company of funds it would have used to defray its share of expenses.

As a result of the decision, Alliance will have no outgoing association with the Four Mile project until January 2016, and the company’s interest in the Four Mile project will be reduced from 25% to about 15% by the end of December 2015.

Key Contracts and Suppliers
Heathgate Resources (feasibility study); and Adelaide Control Engineering (final optimisation study).

On Budget and on Time?
The project has been delayed, owing to legal disputes between Alliance, Quasar and Heathgate.

Contact Details for Project Information
Alliance Resources, tel +61 3 9697 9090, fax +61 3 9697 9091 or email info@allianceresources.com.au.
Quasar Resources, tel +61 8 8110 0500, fax +61 8 8212 5559 or email info@quasarresources.com.au.