Thursday, 27 September, 2007

by Andrew Nelson
Egoli

Energy Resources of Australia Limited (ERA) announced it has extended reserves and the life of its Ranger uranium mine in the Northern Territory to 2012. Without the pushback, production at the mine would have ended in 2009.

The extension of the operating pit follows a detailed feasibility study, which was announced in February 2007.

The company said that together with optimisation work, the extension would add about 4,857 metric tons to its contained uranium reserves, taking total reserves to 51,755 tons.

ERA said that the cost of the extension is estimated to be $57 million predominately comprising expenditure for additional mining equipment and associated infrastructure.

The majority of the additional production from the extension will occur in 2011. Processing at Ranger is due to cease in 2020, ERA said.

The company advised that it had also approved $10 million for a pre-feasibility study on further extensions. The study will commence immediately and continue in 2008.

The uranium miner also said that it had been successful in implementing a number of mitigation strategies following the heavy rainfall event in late February 2007.

"This will allow mining of ore at the bottom of the pit and, subject to experiencing a normal wet season, should allow production in 2008 to be restored to normal level," the company said.

However, force majeure will continue to apply to sales contracts in the first half of 2008 as the backlog of deliveries is cleared, the company concluded.

Yesterday, shares in Energy Resources of Australia finished 43c lower at $17.32.