The Four Mile uranium mine in South Australia was officially opened on 25 June, but its minority owner wants to sell its stake and is preparing a legal battle against the project operator.
|Government and company officials at the opening ceremony for the Four Mile mine (Image: South Australian Government)
The state has four of Australia's five active uranium mines, including Four Mile, which started operations in April. The others are Beverley, Honeymoon and Olympic Dam. The fifth mine is Ranger in the Northern Territory. But amid low uranium market prices, in the wake of the Fukushima accident, expansion of Olympic dam has been put on hold, Honeymoon has been mothballed and the workers at Beverley have been moved on to the Four Mile project.
South Australia Premier Jay Weatherill, who headed the opening ceremony, said the new mine was a "very welcome development and secures the future of 140 jobs."
Weatherill congratulated the project's owners – Quasar Resources and Alliance Craton Explorer (ACE) – and said the high grade and scale of the Four Mile uranium deposit is of world-wide significance.
But Edward Sterck, a senior mining analyst at London-based BMO Capital Markets, said he did not think there was "any huge significance" in the opening of Four Mile. "It appears that they are using the existing Beverley plant which suggests that production from Four Mile is replacing production at Beverley," Sterck told World Nuclear News.
Quasar Director Dave Roberts said there is remaining ore at the Beverley mine that "can and will be" extracted at a future point in time. "But today, we are dedicating the full processing capacity of Beverley to the production of Four Mile uranium," Roberts said during TV coverage of the opening ceremony.
ACE's parent company Melborne-based Alliance Resources announced last week it had appointed Deloitte Corporate Finance to lead the sale of its 25% stake in the project. Alliance said the sale would "free up funds" for the company to develop its exploration portfolio.
In the meantime, the court case is looming for ACE's 2010 filing against Quasar Resources - on the basis of "misleading and deceptive conduct" – having been set for 30 June.
ACE has said it is "seeking restitution for the 75% interest in the exploration licence for Four Mile, citing, among other issues, Quasar’s failure to disclose information relating to the prospectivity of part of the tenement." ACE also contends that Quasar, "with the assistance or participation of" its affiliate Heathgate Resources, breached its obligations under the joint venture agreement.
"Disputes happen in business and the courts are there to resolve them," Roberts said during the TV broadcast.
ACE said in January it had elected to vote against Quasar's revised start-up plan for the Four Mile project, which would see uranium capture at Heathgate's Pannikan plant, and precipitation, drying and packing at Heathgate's Beverley processing plant. ACE said the parties should instead construct a stand-alone plant at Four Mile in order to reduce operating costs. Heathgate Resources, which like Quasar is based in Adelaide, is the owner and operator of the Beverley uranium mine in the Northern Flinders Ranges.
First discovered in 2005, the Four Mile uranium deposit is 550 km north east of Adelaide in the Frome Basin. State and federal regulators approved the mining lease for the project in April 2012 and more than AUD 120 million ($113 million) has been invested so far, the government said. The mine's owners expect to produce up to 1.6 million pounds from the mine this year, it said.
Researched and written
by World Nuclear News