Wednesday, 4 April, 2007

Herald Sun

TWO Australian uranium players have moved closer to mining as the price of yellowcake pushes towards $US100 a pound.

Paladin Resources, which is ramping up production at its new mine in Namibia, yesterday received environmental approval for a second mine in Africa, while Marathon Resources is moving towards development of an underground mine at its Mt Gee project in South Australia.

Marathon said interim results from its scoping study had found a 1000 tonne a year operation at Mt Gee was viable.

Chief Dr John Santich said an underground mine appeared to be the best option in the environmentally-sensitive Flinders Ranges.

The company is continuing to drill in a bid to improve the economics of its project and expects to release an updated resource in the next few months.

"Indications are that we already have a viable mine but we believe we have only scratched the surface," Dr Santich said.

Paladin is hoping to begin producing from its Kayelekera project in Malawi by mid-2008 at a rate of about 1000 tonnes a year.

The company is now waiting for the final nod from Malawi's mining minister.

The moves come as the uranium price surges towards $US100 a pound.

The Nuclear Market Review (NMR) said buyers were seeking more than three million pounds of the nuclear fuel at the end of March, with several utilities making preliminary inquiries about potential purchases.

Energy Resources of Australia, which produces about 11 per cent of the world's uranium, warned on Monday that recent wet weather would affect its production for at least a year.

NMR said the market remained tight and all eyes would be on the sale overnight of 100,000 pounds of uranium by a US producer.

The frenzy surrounding uranium was exemplified yesterday by a 133 per cent jump in Haddington Resources shares.

The company announced it had identified new uranium targets on its Northern Territory tenements after a review of historic literature.