urg::: Honeymoon may start next year

[Len Kanaar - FoE Sydney]

Adelaide Advertiser

SA uranium mine close to starting
By CAMERON ENGLAND
24sep05

AUSTRALIA'S fourth uranium mine could soon get the go-ahead with the 
high price of uranium pushing the South Australian Honeymoon project 
towards viability.

A decision on whether to start production at the fully-approved mine 
in the state's northeast is expected early next year.

Speaking from the U.S. this week, Southern Cross Resources executive 
chairman Mark Wheatley said work was being done to determine how much 
uranium the company could retrieve from the project.

"We are doing more work at Honeymoon as we speak to gather more data 
and the new board will consider that," Mr Wheatley said.

Southern Cross Resources recently merged with a South African company 
called Aflease and the board of the merged entity has to be briefed 
before a decision can be made.

Mr Wheatley said the merged company had a much bigger project in 
South Africa as well.

"The new board will have to decide whether it wants to develop both 
projects together or whether it will do one first and then another 
one after that," he said. "But I'm pretty sure that a decision of 
some sort will be made on Honeymoon, certainly within the first 
quarter of '06."

Work is currently under way to determine how much of the known 
resource is recoverable.

"We've made certain assumptions at this stage when we run our 
economic models but we've decided we need to do more work," Mr 
Wheatley said.

"Because it's only a small project . . . it's marginal at (current) 
prices. We've got a resource of nine million pounds but it's quite 
significant if we get six million pounds, or seven million pounds, 
out of that in terms of the economics.

"Honeymoon will get going, but do you try and get it going now at $30 
(per pound) or do you wait for uranium to hit $40 because I do think 
it will go to $40 within a year or two."

Mr Wheatley said SA was "the best place to be" in Australia because 
its Labor Government "is supportive of uranium mining".

Market interest in uranium was clearly shown yesterday when Resolute 
Mining shares surged 21.9 per cent after the company said it would 
spin out a uranium exploration company in a $7 million initial public 
offer.

Australia's existing three operating uranium mines are BHP Billiton's 
Olympic Dam and Heathgate Resources' Beverly, both in SA, and Energy 
Resources Australia's Ranger mine in the Northern Territory.


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