URANIUM deposits in Alice Springs are a step closer to being developed.

Paladin Energy and its Canadian joint venture partner has been granted an exploration licence to further examine the land once fought over by 30 hopefuls, including one claim by a midnight pegger.

The Northern Territory Government has given the green light to Paladin and Cameco Australia to plan and undertake exploration work on the Angela and Pamela uranium prospects, which are said to contain more than 12,000 tonnes of uranium oxide worth up to $2.5 billion.

Perth-based Paladin Energy and Cameco, the world's largest uranium producer, had won the right to apply for the exploration licence early last year.

In December 2006, the Reservation from Occupation over the sites was lifted and 37 exploration licence applications were lodged with the Department of Regional Development, Primary Industry, Fisheries and Resources.

But it quickly became a controversial process after prospector Norm McCleary hammered pegs into the tenements, 25km south of Alice Springs, under a full moon one night, believing he had beaten to the post the Chinese corporations and other hopefuls eyeing the deposits.

Crown land reservations on the deposits near Alice Springs officially ended at midnight on December 7, 2006, and Mr McCleary thought he had the upper hand by using the old-school method of pegging, rather than submitting an official application.

But the Northern Territory Government argued Mr McCleary did not get permission from the mining warden before entering the land and staking his claim.

Paladin managing director John Borshoff said the Government had been through a thorough process when assessing the 37 applications for the deposits.

With the land in a sensitive area both socially and politically, Mr Borshoff said the Cameco-Paladin ticket was a strong one.

"We both have experience in building modern, commercial uranium mines and have full credentials and offer confidence that we can do things properly," he said.

Mr Borshoff added that the 50-50 joint venture with Cameco further strengthened the Perth-based miner's uranium position in Australia, with key projects now in Queensland, Northern Territory and Western Australia.

"Over and above its present substantial production, Australia is destined to further expand its uranium output and become one of the cornerstone uranium suppliers of the world," he said.