Mine extention and production outlook for Ranger

Thursday, 27 September, 2007

by ERA
ASX

Energy Resources of Australia Ltd has approved an extension of the Ranger operating it. The extension of the operating pit follows a detailed feasibility study which was announced in February 2007. The pit pushback, will extend mining at Ranger until 2012, and combined with optimisation of the existing pit, will add an additional 4,857 tonnes (10.7 million lbs) of contained uranium oxide. The majority of the additional production from the extension will occur in 2011. Processing at Ranger is due to cease in 2020.

The cost of the extension is estimated to be A$57 million predominately comprising expenditure for additional mining equipment and associated infrastructure. The extension will create 45 new permanent jobs at the site. The project is subject to the normal regulatory process but approval has been given to commence preliminary mining.

ERA has also approved expenditure of A$10 million for a pre-feasibility study to examine options to extend the mine further and increase production from the processing plant. The study will commence immediately and continue in 2008.

As previously advised, ERA has been successful in implementing a number of mitigation strategies following the heavy rainfall event in late February 2007. It is now expected that Pit 3 will be emptied of water by November 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 levels.

Force majeure will continue to apply to sales contracts in the first half of 2008 as the backlog of deliveries is cleared.