Published on Thursday October 25 2012 (AEST)
It will be Australia's fifth uranium mine and comes as the Gillard government begins work on agreements to sell uranium to India.
Shares in Alliance, 25.8 per cent owned by Ian Gandel's Abbotsleigh, shot 55 per cent higher to 29.5c on news of the go-ahead. That was despite plans for Four Mile to start at a much smaller scale than Alliance would have preferred - a situation that underpins ongoing litigation between the partners in the joint venture.
Four Mile is one of the best uranium discoveries in recent times, at 32,000 tonnes, and was given environmental clearance by former anti-uranium activist Peter Garrett when he was federal environment minister in 2009. Squabbling between the partners over the best way to develop the resource delayed a go-ahead decision.
Heathgate's operating subsidiary Quasar wanted to use its processing facilities at the nearby Beverley uranium operations, while Alliance pushed for a stand-alone operation on a larger scale. Litigation continues but Quasar, the project operator, has used its 75 per cent vote to push the button on a "start-up" proposal which will see Four Mile producing 2.12 million pounds of uranium a year from the third quarter of next year, using existing Beverley plant and equipment.
Alliance has previously made the case for a 5 million pound-a-year stand-alone operation on the basis that it would generate greater returns, as well as giving it an ownership stake in a processing plant. But since it was out-voted by Quasar it will now contribute its $24.45 million share of the $97.8m development cost. Quasar has given Alliance reason to believe the initial project will in fact be a stage one development, the purpose of which is to allow production rates to be considered before full-scale facilities are constructed.
According to Quasar, the cash operating cost at Four Mile will be $40.33 a pound. Despite the Fukushima disaster, Japanese trading group Itochu emerged earlier this year as a backer of Alliance in Four Mile. It struck a deal under which it could own about 40 per cent of Alliance's stake in the project once legal action in the joint venture is completed.
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