Alliance takes Four Mile partner to court

Monday, 12 July 2010

Australia's Alliance Resources has taken Quasar Resources and Heathgate Resources to court over their failure to disclose information related to the exploration of the Four Mile uranium project in South Australia. The company is also considering constructing a standalone processing plant at Four Mile. 

 

Exploration activities at Four Mile (Image: Quasar)

Alliance announced that its wholly-owned subsidiary Alliance Craton Explorer (ACE) had instituted proceedings in the Federal Court of Australia against Quasar and Heathgate, both subsidiaries of US-based General Atomic Technologies Corp.

 

Quasar is party to a joint venture agreement with ACE under which exploration and more recently development work has been undertaken at the Four Mile project. Heathgate is also a subsidiary of General Atomic Technologies.

 

ACE said that it is seeking damages and the return from Quasar of its 75% interest in the exploration licence over the Four Mile property arising from Quasar's and Heathgate's "failure to disclose information concerning the prospectivity of part of that tenement."

 

Alliance contends that Quasar "engaged in misleading or deceptive conduct" in contravention of Australian trading laws and that Heathgate "assisted or participated in the contraventions committed by Quasar."

 

In addition, ACE claims that Quasar - with the assistance or participation of Heathgate - "breached its obligations under the joint venture agreement, its fiduciary obligations owed to ACE and misused confidential information when Quasar sought, and obtained, a one-year extension of the earn-in period and, subsequently, the transfer of a 75% interest in the exploration licence."

 

ACE said that it was taking the action "in order to protect its rights and the longer-term interests of its stakeholders including Alliance's shareholders, the Australian and South Australian governments and indigenous Native Title holders." The company says that, once in operation, Four Mile will "rank amongst the top ten producing uranium mines in the Western world and deliver outstanding benefits to South Australia and the nation."

 

In Janaury, Alliance announced a 16% increase to its mineral resource estimate for the Four Mile project. The resource now stands at some 71 million lb U₃O₈ (27,136 tU) at an average ore grade of 0.33%.

 

Four Mile is being developed as an in situ recovery (ISR) project through a joint venture of Alliance (25%) and Quasar (75%), with plans for a satellite ion exchange plant to carry out initial uranium recovery at Four Mile. The uranium-loaded ion exchange resin would then be trucked to Australia's only existing operational ISR uranium project, the nearby Beverley plant, for further processing.

 

Scoping study 

 

Alliance said that, in order to maximize the full benefit of the Four Mile project for its stakeholders, in 2009 it commissioned an independent scoping study to estimate the capital costs of the design, procurement and construction of a stand-alone ISR uranium processing facility at the project.

 

The newly-released study - conducted by Como Engineers and Adelaide Control Engineering - indicates that the Four Mile project offers a significantly greater return if developed as a standalone project with a production rate of 5 million pounds per year.

 

Based on the results of the study, Alliance is commissioning an optimization study for the design, capital and operating cost estimates for a standalone ISR plant at Four Mile.

 

Researched and written 

by World Nuclear News