Patrick Mutz, managing director of Australian uranium company Alliance Resources (ASX: AGS) told Mining 2009 delegates and investors, the Four Mile uranium project in South Australia "ticked alot of wonderful boxes."
Alliance owns a 25% participating interest in the project with Quasar Resources, affiliate of Heathgate Resources, which owns and operates the nearby Beverly uranium mine, owner of 75% of the project.
The mining convention in Brisbane learnt the JV planned to piggy-back on the back of as much of the Beverly uranium project as possible, which would reduce costs. The planned In Situ Recovery (ISR) technology, which is used in 29% of uranium production in the world was already a low cost proven technology for planned production at Four Mile.
Four Mile had a uranium grade seven times higher than the much vaunted highest grade ISR uranium mines in Kazakhstan.
Although typical recovery using ISR is about 70%, Mutz said "70% recoveries will be surpassed" in Phase II at Four Mile.
In situ leaching (ISL), also known as solution mining, or in situ recovery (ISR), involves leaving the ore where it is in the ground, and recovering the minerals from it by dissolving them and pumping the pregnant solution to the surface - where the minerals can be recovered.
Consequently there is little surface disturbance and no tailings or waste rock generated.
Cash costs at Four Mile were estimated at US$35/lb. This compared to a long term uranium contract price of US$65/lb, enabling a "very good margin for this project".
Project costs, while increasing to A$120 million from $90 million, (Alliance's share was $28 million) were still on the low side for a project that had one of the highest grade uranium deposits in the world and one of the largest producing mines, when on-stream.
In Australia, only Olympic Dam and Ranger Uranium mines were larger in tonnage, although Ranger had a lower grade at 0.24% than Four Mile's 28,000 tonnes @ 0.35%.
The project was still due on-stream in 2010, despite some delays. A State mining permit was still awaited.
Patrick Mutz said he was confident on additional uranium discoveries at Four Mile deposits, with more resource to come due to the geology of the area and source trending south from the ranges. The project had a possible 50,000 tonnes resource and more, the conference was told.