Wednesday 22 February 2006
ABC NT Country Hour

Report by Adrienne Francis

Construction of a mining camp near Batchelor could begin within three months.

If approved, Compass Resources will begin cobalt, nickel and copper mining, as part of the Brown's Oxide Project. Beneath these deposits, lies the Browns Sulphide Project, which would add lead to the mining haul. But will there be uranium in there as well? Certainly historic deposits are nearby at the abandoned Rum Jungle Uranium Mine, which closed in 1962, and Malcolm Humphreys, Compass executive director, says uranium is something they are interested in.

"We are looking at drilling out uranium resources in 2006, with success in that, and follow up drilling, then we would develop a mine plan and go through a lengthy permitting operation. It wouldn't be unreasonable to think you could be in uranium production within 5 years time. We are also drilling for uranium to establish a resource for capital raising purposes. The sizes of the deposit could vary. But in general we would be looking for projects that have about 10 to 20 or 30 million pounds of contained uranium. Bearing in mind that uranium price in Australian dollars is about $50 per pound. So a 30 million pound uranium deposit has potential value in the ground of $1.5 billion."

"The oxide and sulphide Browns deposits do not overlap currently with the nearby uranium deposits, but they come in close proximity in some locations. We know that we do not have uranium in those ores and we know that if we were producing concentrate for sale overseas, that the level of uranium is very low and could be shipped overseas without any trouble. We would be ready to commence construction at the Browns Oxide Projects by May, but that is still subject to the environmental and regulatory approvals and we are a long way towards that. These Browns Oxide and Sulphide projects are independent operations. We are looking for a stand alone uranium project but infrastructure could be shared. We are not trying to hood wink anyone we are trying to earn money for our shareholders. The Browns Projects are located 1km from the old Rum Jungle Uranium Mine, which has already had a reclamation program of $20 million carried out. Old mining practices left that site severely degraded. At any old mining site there are issues, so reclamation carried out after the original operations will continue to have potential environmental impacts. The developments which we do will have no impact on that old uranium area at all."