ERA Boosts Uranium Output

Energy Resources of Australia (ERA) has reported a big rise in uranium oxide production in the June quarter, thanks to a lack of wet weather around the mine in the Northern Territory.

The lack of wet weather and flooding in the early part of the quarter meant earlier and longer access to the mining pit and higher production resulted.

The company reported a 44% improvement in uranium oxide production to 1,481 tonnes for the June 2009 quarter, compared to the June quarter of 2008 when 1,030 tonnes were produced.

That was also 22% up on the March quarter on this year.

Uranium produced for the first six months to the end of June was 2,695 tonnes, or 5,942 pounds, up 14% on the prior first half.

That puts ERA in a solid position to report higher earnings in next month’s interim results.

Ore milled for the June quarter was 21% higher, at 597,000 tonnes, than the March quarter and 7% above the June 2008 quarter, due to improved utilisation and milling rates.

Ore grade processed was 0.28% uranium oxide in June, down from 0.29% in March but up 29% on the June 2008 quarter.

ERA says work continued on the Ranger mine expansion project, including the development of a heap leach facility for the extraction of 15,000 to 20,000 tonnes of uranium oxide in low grade mineralised material on stockpiles and ore yet to be mined.

Studies are also continuing on the Ranger Deeps ore body, with a current resource of about 34,000 tonnes of uranium oxide.

"Work continued on the Ranger Expansion Project, involving the development of a heap leach facility at the Ranger operations for the extraction of 15,000 to 20,000 tonnes of uranium oxide contained in low grade mineralised material currently on the stockpiles and yet to be mined," the company said.

"On 19 May 2009, ERA announced that the proposed heap leach facility would be subject to environmental assessment under the Northern Territory Environmental Assessment Act and the Commonwealth of Australia Environmental Protection & Biodiversity Conservation Act (EPBC Act), at the level of an Environmental Impact Statement.

"The Northern Territory and Commonwealth governments have not yet released the draft guidelines for the Environmental Impact Statement for public comment.

"Studies are continuing regarding the Ranger 3 Deeps ore body, with a current resource of around 34,000 tonnes of uranium oxide.

"On 19th May 2009, ERA announced that the Commonwealth government had determined that the proposed exploration decline project, to conduct close spaced underground exploration drilling to further evaluate the extent and continuity of the Ranger 3 Deeps ore body, would not be subject to environmental assessment under the Commonwealth EPBC Act.

"ERA has not yet been notified by the Northern Territory government whether this project will be subject to further environmental assessment under the Northern Territory Environmental Assessment Act."

ERA said in April that construction of the Ranger 3 Deeps underground operation may start in the first half of next year.

The estimated 34,000 tonnes of uranium oxide resources at Ranger 3 Deeps helped more than double total resources at Ranger to 115,000 tonnes in 2008.

ERA said it spent $4.9 million on exploration in the quarter, compared with $5.4 million in the March 2009 quarter, for a total of $10.3 million in the June 2009 half year, which has been expensed.

"During the June 2009 quarter, 12 exploration drill holes were completed for 3784 metres.

"Exploration expenditure for the June 2009 quarter was $1.5 million (June 2008 quarter: $4.2 million), compared with $2.2 million in the March 2009 quarter, for a total of $3.7 million in the June 2009 half year (June 2008 half year: $8.0 million), which has been expensed." 

ERA shares were up 57 cents at $21.57, at the close yesterday.

ERA’s parent, Rio Tinto, produces its second quarter and first half production reports later today.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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