News & Features, Resource News, Uranium
Energy Resources shares rise as output beats company forecast
By The Australian · January 12, 2012 · 12:21 pm · Leave a Comment
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By Ross Kelly
URANIUM miner Energy Resources of Australia today said the highest December rainfall on record has flooded its Ranger pit in the Northern Territory, impeding access to high-grade ore and potentially lowering production volumes this year.
The bad news was largely anticipated, however, and beaten down ERA shares were up 4.7 per cent amid a flat wider market after the miner said it exceeded its 2011 output forecast.
The subsidiary of mining giant Rio Tinto said it hasn’t been able to fully drain the Ranger pit and that access depended on the extent of rainfall over the rest of the wet season.
Ranger in 2010 was the second-biggest uranium mine in the world by production. But its uranium resource is just about spent and ERA has encountered lower-grade ore at the bottom of the pit, triggering a spate of production downgrades last year. Adding to its problems is the mine’s location in a tropical climate prone to intense seasonal rain. Ranger borders the heritage listed Kakadu National Park and has to meet stringent water-management conditions.
For the 12 months to December 31, 2011, ERA reported a 30 per cent drop in output to 2641 tonnes, ahead of guidance of about 2600t, after severe rain last year forced a closure of the mine. Production in 2010 was 3793t, and ERA registered 5240t for 2009.
“The delay in obtaining access to the high-grade ore located towards the bottom of Pit 3 may impact production of uranium oxide in 2012. However, the extent of this impact is presently uncertain,” ERA said in a statement.
ERA recently ditched plans to build a heap leach facility to process poorer quality ore and chose instead to pursue a possible expansion of Ranger through development of the adjacent Ranger 3 Deeps deposit.
Its board last year approved drilling of a large tunnel, technically called an exploration decline, through the deposit to allow for testing and closely spaced drilling. ERA today said that clearing work for the decline is continuing and that it expects to start the box-cut, a small open cut to provide access to the decline, in May.
