Alliance dives on maiden resource

Tuesday, 8 May 2007Kate Haycock
ALLIANCE Resources has seen its share price fall by more than 25% or 72c after it announced an initial resource of 3.9 million tonnes at 0.37% uranium at the Four Mile West deposit with an estimated in-ground value of $4.4 billion.


The announcement of the initial inferred mineral resource of 32 million pounds or 15,000t of contained uranium at the Four Mile West prospect saw Alliance's shares fall to $2.13 in morning trading from $2.85, before gaining some ground to $2.30. Alliance holds a free-carried 25% interest in the project, with its joint venture partner Quasar Resources holding the remaining stake. Almost 8 million shares had changed hands shortly after midday, with one disgruntled investor offloading 100,000 Alliance shares at $2.20 each.Based on uranium's current spot price of $US113 per pound and an Australian dollar exchange rate of US83c, the current resource would only return a dollar value to Alliance shareholders of around $4.40 gross per share, the Dow Jones newswire said.However, Alliance was quick to point out in its statement to the market that the resource was only an inaugural one and covers only 1 square kilometre within a broader 5sq.km area of potential mineralisation. "The initial inventory of contained U3O8 … has a very substantial in-ground value at current uranium prices, which we expect will continue to grow as the joint venture continues to drill out the broader extent of the deposit and establish resources at the Four Mile East deposit," Alliance chairman John Dunlop said this morning. Representatives from Alliance Resources were unavailable for further comment this morning. The Four Mile West discovery is 8km west of the Beverley uranium mine in South Australia and forms part of the Arkaroola joint venture between Alliance and Quasar, which has begun a scoping study to evaluate mining and processing options at the project.
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