Name and Location
Ranger 3 Deeps exploration decline project, Northern Territory, Australia.

Client
Energy Resources Australia (ERA), in which Rio Tinto has a 68.4% shareholding.

Project Description
In 2009, ERA announced the discovery of a significant uranium oxide orebody in an area known as Ranger 3 Deeps, located east of and adjacent to the current Ranger 3 operating pit.

The ERA board has since approved the construction of an exploration decline to conduct closely spaced underground exploration drilling and explore areas contiguous to the Ranger 3 Deeps resource.

Mining will be conducted through a series of stopes, accessible through a decline, allowing for the transportation of material in trucks to the surface. The decline, constructed as part of the Ranger 3 Deeps exploration decline project, will also serve as the primary access to the underground mine and is located adjacent to Pit 3.

The fixed ventilation system, constructed for the exploration decline project, will also be used for the proposed action and will be expanded to include additional ventilation shafts.

A paste fill plant, about 100 m3/h in capacity, will be constructed within the footprint of the existing operational area for backfilling the mined-out stopes.

The main mine operations will be more than 300 m below surface. Mineralised material will be transported to the surface and processed at the existing processing plant. Owing to the selective nature of the proposed underground mining method, only a relatively small quantity of waste rock – about 500 000 t – will be generated, compared with more than 80-million tons of waste from the mined-out Pit 3.

A brine concentrator will also be installed as part of a significant investment in process-water management and treatment at Ranger 3 Deeps. The concentrator uses thermal energy to evaporate water, which is then condensed and discharged as clean distilled water.

Net Present Value/Internal Rate of Return
Not stated.

Value
ERA has reported that it will raise about A$500-million to fund the construction of its Ranger 3 Deeps exploration decline and further the studies in the Ranger 3 Deeps mine.

The proceeds will be used to fund the construction of the A$220-million brine concentrator and other management initiatives, which will cost A$52-million.

The funds will also go towards the construction of the Ranger 3 Deeps exploration decline and associated exploration drilling, at a cost of A$120-million, with a further A$57-million being set aside for the completion of a prefeasibility study (PFS) on the development of the Ranger 3 Deeps mine.

A further A$40-million had been earmarked for an expanded exploration programme, targeting highly prospective areas on the Ranger project area from 2012 to 2014.

Duration
A decision on the viability of the Ranger 3 Deeps development is expected by late 2014.

Latest Developments
Three directors of ERA, including chairperson Peter McMahon, have resigned from the company’s board over differing views on the future of the Ranger 3 Deeps project.

In tendering their resignations, McMahon and the two other outgoing directors, Dr Helen Garnett and Dr David Smith, have said it is difficult for ERA to pursue its goals without the support of Rio Tinto.

ERA announced on June 11 that it had abandoned its planned Ranger 3 Deeps underground project, citing weak uranium prices. Rio Tinto subsequently announced that it did not support any further study or the future development of Ranger 3 Deeps, owing to the project’s economic challenges.

The outgoing directors have said that, while the ERA board has decided that the Ranger 3 Deeps project will not proceed to the final feasibility study at this time, the board believes that an extension of the Ranger authority will enable ERA to revisit the Ranger 3 Deep project’s economics over time.

The ERA board was handed the A$57-million Ranger 3 Deeps prefeasiblity study at the end of last year, and conducted a review of the study during the first quarter of 2015.

ERA has appointed Andrea Sutton as interim chairperson and has started a search for replacement independent nonexecutive directors.

The company is also assessing whether its assets might be impaired.

Rio Tinto has previously warned that it is assessing a potential noncash impairment charge of about $300-million in relation to its shareholding in ERA.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
ERA, tel +61 8 8924 3500, fax +61 8 8924 3555 or email info@era.riotinto.com.