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Uranium price plunge costs SA uranium miner

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A global drop in uranium prices has hit the owner of a South Australian uranium mine, Heathgate Resources, with the company experiencing a $60 million loss over the last two years.

The miner, which has run Beverly uranium mine since 2000, posted a $34.5 million loss in 2012 as per its statements submitted to the Australian Securities and Investments Commission.

It suffered a $25.6 million loss in 2011, the AFR reported.

The losses come as uranium prices dropped by more than 50 per cent after the Fukushima nuclear plant suffered a meltdown in March 2011. Prices are yet to improve.

Beverly is one of four Australian uranium mines.

Heathgate Resources’ affiliate Quasar Resources received approval from the state government last week for the new $110 million Four Mile uranium mine in South Australia.

South Australian Mineral Resources Minister Tom Koutsantonis gave the final environmental approval.

Four Mile is said to have the most significant deposits discovered anywhere in the world over the last 25 years.

The initial resource at the mile site is 3.9 million tonnes at 0.37 per cent uranium oxide containing 15,000 tonnes of uranium oxide.

Koutsantonis gave the green light for the Program for Environmental Protection and Rehabilitation on condition the uranium mined at Four Mile will be processed at the Beverly site.  

US-based global nuclear company General Atomics owns Heathgate and Quasar Resources.

Quasar Resources has a 75 per cent stake in the Four Mile project. ASX-listed company Alliance Resources owns the remaining 25 per cent.

The two companies are locked in court action over conflict about how to go about developing the uranium.

Alliance Resources managing director Steve Johnston is optimistic about the recovery of uranium prices and other analysts expect it happen later in 2014.

“We are positive about the longer term,” he said.

“The timing as to when that happens is anyone’s guess,” Johnston said.

Two different legal cases are mentioned in the Heathgate financial statements. One refers to Alliance urging to get access to a few joint venture documents, which started in 2009.

The second action was about how Quasar was paid its interest in a joint venture tenement. This began in 2010.

Alliance Resources settled a native title legal dispute last year for the Four Mile project after being involved in legal issues on native title agreements.

Resources Minister Gary Gray said the Australian uranium industry needs to ramp up as demand is set to outdo supply.

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