ADELAIDE-based exploration company Quasar Resources has announced it will resume development at the Four Mile uranium project in South Australia despite a key shareholder voting against the proposed start-up plan.
Quasar, which holds a 75 per cent interest in the project, voted in favour of a 16-month program that will see in-situ recovery mining operations begin at the prospect in the second quarter of 2013, with first uranium sales scheduled for the third quarter.
As part of the plan, uranium capture and processing will take place at facilities operated by Quasar affiliate Heathgate Resources, which owns the adjacent Beverly uranium mine.
Alliance Resources, which owns the remaining 25 per cent interest in the Four Mile project, voted against the start-up plan, which will see the production of 2.1 million pounds of uranium oxide for sales of 1.306mlb.
The plan estimates that cumulative cash expenditure for the year ending 2013 will be $97.8 million, of which Alliance’s share will be $24.45 million.
Quasar will also invest $12 million in regional delineation drilling next year.
Cash operating costs are expected to be about $25.46 per pound of uranium oxide, excluding wellfield development, or $40.33 inclusive.
Sale prices are forecast to be US$62.58 per pound for 2013.
Alliance stated that it still considered the construction of a standalone plant at Four Mile would produce a better outcome for the company.
“Quasar has described the start-up plan as a staged commencement of mining operations, the purpose of which is to permit actual production rates to be considered before full-scale production facilities are constructed,” Alliance said in a statement.
Ongoing legal action against Quasar and Heathgate by Alliance will continue, and will not be affected by the development.
Quasar, which also holds tenements throughout the Northern Territory and WA, discovered the Four Mile uranium prospect 550km north of Adelaide in
April 2005. It has been actively defining the extent of the resource for the past five years.
The Four Mile project, which comprises the Four Mile West and Four Mile East deposits, is one of the most significant uranium discoveries made in Australian in the past 25 years.
In 2007, Quasar announced an inferred mineral resource at the project of 3.9 million tonnes grading 0.37 per cent uranium containing 15,000t of uranium.