Work is set to commence on the construction of the boxcut and decline for an exploration project that could eventually see Energy Resources of Australia's (ERA) Ranger uranium mine become an underground operation.

ERA has awarded a A$50 million ($52 million) contract for the boxcut, portal establishment and 2.2 km decline in preparation for its own drilling program at Ranger 3 Deeps to Macmahon Holdings. The decline will reach a depth of 400-500 metres. Work on the project is due to begin in May 2012. Macmahon's portion of the work is scheduled for completion in early 2014.

Ranger 3 Deeps is an extension of the Ranger 3 orebody and contains an estimated resource of 34,000 tonnes U3O8 (29,000 tU), described by ERA as one of the most significant uranium discoveries in the world. The results of the exploration drilling will be used to further studies into the potential development of an underground mine for which ERA has allocated a further A$55 million ($57 million). In total the company plans to spend A$120 million ($127 million) on the decline project, which the Northern Territory government approved in September 2011.

ERA CEO Rob Atkinson said the Ranger 3 Deeps exploration decline project formed a very important component of the company's future plans, and was a significant step in determining the viability of an underground mine at Ranger where operations in in the present open pit are nearing completion. "In addition to investing in the Ranger 3 Deeps Exploration Decline Project, we have also invested in a three year drilling programme at a cost of $40 million to define and determine other resources at Ranger," he said.

Mining began at the first open pit at Ranger, some 230 km east of Darwin in the Northern Territory, in 1981. Mining of the present pit, Pit 3, began in 1997.