Alliance Resources (ASX: AGS) unveiled the news the market was waiting for, and the shot in the arm the uranium market needed.
The Four Mile uranium joint venture project in South Australia will become the next major global uranium producer in January 2010. Alliance shares were up 10%.
At the Four Mile Project, the inferred mineral resource estimate has increased to 61 million pounds of uranium oxide grading 0.35% or 3500 parts per million uranium oxide - an increase of 90%.
The reason for the large increase? A maiden resource estimate for the Four Mile East deposit. It has an initial resource of 4.1 million tonnes grading 0.31% uranium oxide for 29Mlb of uranium oxide.
Alliance has a 25% interest in the project and will provide $22.5 million in funding. The combined grades from Four Mile East and Four Mile West have the potential to make the Four Mile uranium project the highest-grade operating uranium mine in Australia.
Alliance managing director Patrick Mutz said that the project had the potential to be the highest grade and largest in-situ recovery operation in the world.
Drilling at Alliance Resources' Four Mile uranium joint venture with Quasar Resources.
Production at Four Mile in January 2010 will commence at an initial rate of 2.6Mlb per annum, before increasing to 3Mlbpa within three months.
The project has estimated development costs of $A90 million.
Quasar Resources, affiliate of Beverley uranium mine owner Heathgate Resources, holds the remaining stake in Four Mile and is the manager of the JV.
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