With us today is Frank C. Smeenk President & Chief Executive Officer of KWG Resources Inc. Mr. Smeenk discusses recent conversation with Noront Resources after proposed acquisition of Cliffs Chromite was announced.
JOHANNESBURG (miningweekly.com) – Uranium and gold producer Alliance Resources’ $90-million Four Mile uranium project, in South Australia, could evolve into the first in the world to be powered by a renewable energy source, MD Patrick Mutz said on Monday.
The project, discovered in 2005, is due to be commissioned in early 2010.
Mutz said that the opportunity to go green at Four Mile stemmed from a memorandum of understanding, signed in 2005 between Heathgate Resources and geothermal energy producer Petratherm to take power for the mine from Petratherm’s planned nearby hot-rocks pilot plant.
“Petratherm’s Paralana project is located 5 km to the east of the Four Mile project, with the deep-well heat exchanger drilling at Paralana to start in June,” Mutz said at the Paydirt 2009 South Australian Resources & Energy Investment Conference.
“We believe the hot-rocks pilot plant will have the capacity, if proven commercial, to provide Four Mile’s total power needs. If that eventuates, it would be the first uranium mine in the world to source its electricity requirements from a renewable energy source.”
Alliance is a 25% joint-venture partner in Four Mile’s development along with the privately owned Quasar Resources, the project’s operator.
The Four Mile mine’s construction was expected to be completed in December, along with all outstanding environmental approvals and mining permitting, allowing commissioning and mining to start next January as an on-site recovery operation.
Mutz said that initial production rates from Four Mile, which was Australia’s largest uranium discovery in 25 years, were forecast to be around three-million pounds of uranium oxide, or about 1 400 t of contained uranium oxide a year.
A resource update is expected within two to three months, and Mutz noted that there was considerable upside for an expanded resource base.
“We expect initial cash costs to be around A$38,80 a pound or about $25/lb. At the current spot price of $44/lb, the margin is significant and of course the long-term uranium price is much higher. I believe the majority of Four Mile production will be sold on long-term contracts.”
Mutz said that Four Mile will emerge as the third-largest Australian uranium mine, and will rank within the top ten uranium mines in the world.