25 November 2009 ASX Code: AGS No. of pages: 54 PRESENTATION TO THE 2009 ANNUAL GENERAL MEETING TO BE HELD AT 11:00AM ON WEDNESDAY 25 NOVEMBER 2009

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1 ASX ANNOUNCEMENT 25 November 2009 ASX Code: AGS No. of pages: 54 PRESENTATION TO THE 2009 ANNUAL GENERAL MEETING TO BE HELD AT 11:00AM ON WEDNESDAY 25 NOVEMBER 2009 Please find attached a copy of the Company s presentation to be made at the Alliance Annual General Meeting on 25 November 2009 by the Managing Director, Mr Patrick Mutz. For a colour version of the attached presentation, please go to our website For and on behalf of the Board. Ian Pamensky Company Secretary For further information regarding this announcement, contact: Patrick Mutz Managing Director Alliance Resources Limited info@allianceresources.com.au About Alliance Resources Further information relating to the Company and its various exploration projects can be found on the Company s website at Suite 3, City Road Southbank, VIC, 3006 P F info@allianceresources.com.au ABN

2 ALLIANCE RESOURCES L I M I T E D ANNUAL GENERAL MEETING WEDNESDAY 25 NOVEMBER 2009 HWL Ebsworth Level 41, 600 Bourke Street Melbourne

3 Presentation Outline 2009 Financial Year Progress Corporate snapshot Projects Strategy and focus Four Mile project development Uranium mineral resource estimates Capital raising programme Maldon Resources Share price and U price Subsequent Events (post 30 June 2009) Grant of environment permit Filing of Native Title Mining Agreement Four Mile legal issues 2

4 Corporate Snapshot Corporate ASX code AGS Shares on Issue 341M Market Capitalisation ( ) ~A$210M Unlisted Options 8.63M Net Cash ( ) unaudited A$45.6M Board & Management John Dunlop Patrick Mutz Ian Gandel Tony Lethlean Steve Johnston Ian Pamensky Chairman Managing Director Director Director General Manager Company Secretary Major Shareholders Abbotsleigh 25.8% Top 20 shareholders 56.7% Board & Management 30.5% No debt & strong shareholder support 3

5 Project Locations 4

6 Focus on Uranium 4 th Quarter 2008 Alliance focuses its efforts and resources on the development of its joint venture interest in the Four Mile Uranium Project in South Australia, with production scheduled to begin (then) in early

7 Four Mile Uranium Project Joint Venture

8 JV Partner - Quasar Resources Pty Ltd Quasar Resources Pty Ltd 75% JV partner and manager of Four Mile Project Joint Venture (Alliance 25%) Australian-based private exploration company Affiliate of Heathgate Resources Pty Ltd; owner and operator of the Beverley Uranium Mine Parent company is General Atomics located in San Diego, California (also Heathgate s parent) Assumed 100% of exploration costs on Four Mile Project up to decision to mine to earn 75% interest Alliance remains free-carry outside FM Mine Development Area 7

9 Four Mile Uranium Project JV Quasar decision to mine Sep 2008 Alliance contributing to project development costs incurred from 22 October 2008 In-Situ Recovery (ISR) mining proposed Lower cost mining option Lower environmental impact Mining and concentrate production to commence 2010 * 3.0 Mlb (1.4Kt) U 3 O 8 annual production target [100%] *as advised by Quasar adjacent to Beverley Uranium Mine and existing infrastructure 8

10 Four Mile Processing Proposal Quasar mining proposal Construction of satellite resin loading plant at Four Mile Transport of loaded resin by truck to Heathgate s Beverley Plant for: resin stripping U precipitation, and drying, packaging and storage of uranium concentrates Return stripped resin by truck to Four Mile satellite plant 9

11 In Situ Recovery (ISR) Technology Used at nearby Beverley uranium mine since 2000 Mining method for 28% of global U 3 O 8 production (1) Lower cost compared to conventional mining methods Typical ISR recovery ~70% in 12 months Ultimate recovery likely higher with higher grade ores & higher U price (1) production statistic; WNA Image courtesy Heathgate Resources Pty Ltd low environmental impact 10

12 FM Project Development Budget Initial estimate by Quasar - $90M (total project) $22.5M Alliance s 25% share Alliance contends budget and cash calls not in accordance with EJVA and objects to payments to Heathgate for modification of Beverley Budget revised by Quasar to $112M (total) $28M Alliance s share Alliance objects to increase Majority interpreted as unnecessary and unjustified change of scope (new capital at Four Mile West) Disclaimer: Alliance Resources was not involved with the generation of Four Mile Project development and operating costs and does not endorse or accept Quasar s estimated costs as correct and accurate as those costs were generated internally by Quasar and affiliate Heathgate Resources Pty Ltd and lack independent verification by Alliance or its consultants. Alliance has commissioned an independent scoping study to review Quasar s estimated costs and project assumptions. Alliance reserves all its rights with regards to Quasar s proposed costs. 11

13 AGS Cash Contributions to FM JV Cash calls made on monthly basis by Quasar starting (effectively) 22 October 2008 Totals contributed by AGS $6.6M in 2009 financial year $11.8M P-T-D through 31 October 2009 AGS has reserved its full rights with each and every cash call made to-date 12

14 Four Mile Development Progress Public Environment Report completed and filed by Quasar in 1 st Quarter 2009 Project engineering and procurement GRD Minproc Installation of numerous test wells at Four Mile East To be used as production wells Additional exploration holes at Four Mile East and West 13

15 Four Mile Uranium Project Resource Estimate

16 Four Mile Uranium Resources Alliance commissioned an independent maiden uranium mineral resource estimate at Four Mile East in accordance with the JORC Code Results announced in June 2009 Total resource estimate for Four Mile increased by 90% Grade of resources at Four Mile East much higher than estimated by Quasar in Public Environmental Report 15

17 FM Uranium Mineralisation Footprint world-class, high-grade uranium deposit 16

18 FM Mineral Resource Estimate Deposit GT Cutoff m% Ore Mass Tonnes U 3 O 8 % U 3 O 8 Tonnes U 3 O 8 Mlb Four Mile West* (May 2007) ,900, , Four Mile East (June 2009) ,100, , TOTALS 8,000, , * - partial Expanded resource estimate for Four Mile West nearing completion 17

19 FM Uranium Mineralisation Footprint 18

20 Australian Uranium Mining Resources (U 3 O 8 ) K tonnes Grade(%) Olympic Dam, SA (Jun 2008) 2, Ranger, NT (Dec 2008) Four Mile, SA (partial) Beverley, SA (pre-mining; 1999) Honeymoon, SA Production Tonnes (U 3 O 8 ) Ranger, NT 5,273 ( ) Olympic Dam, SA 4,115 ( ) Four Mile, SA 1,360 (from 2010) Beverley, SA 707 ( ) Honeymoon, SA (from 2010) Ranger Olympic Dam Four Mile JV Beverley Honeymoon Well Sources: World Nuclear Association 1 Uranium One 19

21 Growth Target - Resources Australian Uranium Resources 0.60 Uranium Resources (Ktonnes U 3 O 8 ) Targeting 50,000 tonnes Average Grade (% U 3 O 8 ) Excludes Olympic Dam due to scale 20

22 Growth Target - Production At scheduled production, Four Mile will rank amongst Top 10 producing uranium mines in the Western world Uranium Production (tonnes per annum) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0? Source: WNA, 2007 statistics 21

23 Capital Raising

24 Capital Raising Programme Placement of 15% of issued capital in May-June 2009 at 68 cents per share 1:12 Rights Issue in June 2009 at 60 cents per share Placement of Rights Issue Shortfall in July 2009 at 68 cents per share Total funds raised: $44.7M 23

25 Capital Raising Programme Issued Capital (pre Placement) Placement (1) Total Shares on Issue Rights Issue (1 for 12) (2)(3) Shares on Issue (post Rights Issue) (3) 274M 41M 315M 26M 341M Net Cash (31 Mar 09) audited $ 12.4M Placement Proceeds (net) $ 26.9M Net Cash (3-Jun-09 ) unaudited $ 39.3M Rights Issue Proceeds (gross) (3) $ 15.7M Margin for placement of shortfall (net) (4) $ 0.8M Projected Cash (post capital raising) (5) ~$ 52.0M Notes: 1. Allotment date 3 June Price A$ Record date 4 June Price A$ Assumes Rights Issue (RI) fully subscribed. Closing date 25 June Additional funds from placement of RI shortfall at $0.68 less costs. 5. Includes capital raising expenses and ongoing business expenses thru July

26 Maldon Resources

27 Sale of Maldon Resources Alliance enters into Heads of Agreement with A1 Pty Ltd in March 2009 to combine resources and float a new public gold company Alliance and A1 enter into Heads of Agreement with Drummond Gold Limited in May 2009 to combine resources and use Drummond as the listed vehicle A1 pulls out of Agreement in June 2009 Alliance signs Share Sale Agreement with Drummond in October 2009 to sell 100% of Maldon in exchange for 88 million Drummond shares Expiry of agreement extended to 15 January

28 Alliance Share Price & Uranium Price

29 AGS Share Price Graph (2 year) 28

30 AGS Share Price Graph Comparison 29

31 AGS Share Price Graph Comparison 30

32 AGS Share Price Graph Comparison 31

33 AGS Share Price Graph Comparison 32

34 AGS Share Price Graph Comparison 33

35 Uranium Market Price AGS Share Price Graph $130 $110 $90 $70 $50 $30 Spot Price Long-term Price 34

36 Uranium Market Price $160 $140 $120 $100 $80 $60 $40 $20 Uranium Market Price Current market prices: Spot price US$43/lb Long-term US$64/lb Gap between spot price and longterm price remains excessive Spot market thin and not reflective of strength of current market Long term market applicable to projects with long mine life $0 UxC EOM Spot Price Tradetech EOM Long-term Price Four Mile Project production fits long term pricing model Current spot price not indicative of Four Mile project economics 35

37 Environmental Approval & Native Title Agreement

38 Four Mile Project - Timeline 2008 May Application for Mining Lease filed September Quasar decision to mine October Effective date of Alliance contributing to JV 2009 January Quasar issued Public Environmental Report (PER) February PER Public comment period closed July Environmental Approval ?? Grant of State Mining Permit 2010 Post April Scheduled completion of construction Post April Mine Commissioning & Start up 37

39 Native Title Mining Agreement Quasar negotiated and executed a Native Title Mining Agreement (NTMA) for Four Mile Alliance was not allowed to participate in the negotiations and was not informed of the progress of the negotiations Quasar submitted the NTMA to PIRSA for registration on 12 June 2009 On 26 June 2009 PIRSA informed Alliance the NTMA could not be registered in its current form as Alliance was not named as a party to the agreement Quasar then provided a copy of the agreement to Alliance and Alliance found existing Heathgate agreement subsumed into Four Mile agreement 38

40 Native Title Mining Agreement Alliance attempted to negotiate appropriate deed polls with Quasar to allow Alliance to ratify the NTMA as executed, but which also; eliminates potential cross liabilities between the parties, clarifies Heathgate s approval authority with respect to Four Mile, and places Alliance, as much as possible, in the position it would have been, had the agreement covered only the Four Mile project. Alliance s attempt to reach a negotiated position with Quasar and Heathgate was unsuccessful 39

41 Legal Actions Summary and Outlook

42 Legal Actions Summary Alliance has recently instituted three court actions in South Australia relating to the Four Mile Joint Venture 1. Seeks a declaration that a ruling by the JV Management Committee Chairman, prohibiting Alliance from recording joint venture meetings, is invalid 2. Seeks a declaration that Quasar exceeded its authority as JV Manager in executing the native title mining agreement 3. Application for pre-action discovery and access to joint venture books and records 41

43 Legal Actions Summary Recording Joint Venture Meetings Action commenced 13 October 2009 in SA Supreme Court Action relates to a ruling by the Chairman of the JV Management Committee, Neal Blue (representing Quasar), that Alliance must not record joint venture meetings Alliance does not consider that the minutes that have been taken and approved by Quasar are complete and reflect accurately the tenor and content of the conversations at JV meetings JV Chairman will not convene a meeting of the Management Committee unless Alliance undertakes not to record meeting Directions hearing scheduled for 15 December 2009, at which it is expected that a hearing date will be set Hearing expected to last 1 to 2 days 42

44 Legal Actions Summary Native Title Mining Agreement Native title mining agreement covering Four Mile subsumes existing agreement for Beverley Mine and gives Heathgate Resources rights to make decisions pertaining to Four Mile Alliance sought, by negotiation, to place itself in the position it would have been in had the agreement only related to Four Mile but was unable to reach an agreement with Quasar and Heathgate Action commenced 12 November 2009 in SA Supreme Court Action seeks a declaration that Quasar acted in excess of its authority and in breach of its fiduciary duty and seeks orders requiring Quasar and Heathgate to execute deeds which place Alliance, as nearly as possible, in a position it would have been in had the agreement only covered Four Mile No date for a hearing has been set 43

45 Legal Actions Summary Pre-Action Discovery; Access to JV Books and Records Alliance is unable to verify whether all the expenditure included in the program and budget to which it has been contributing is properly chargeable to it under the joint venture agreement To-date Quasar has only provided Alliance with limited information Action commenced 16 November 2009 in Federal Court of Australia (South Australia) Action seeks a court order that Quasar and Heathgate give Alliance access to joint venture books and records Directions hearing scheduled for 15 December 2009, at which it is expected that a hearing date will be set Hearing expected to last 2 to 3 days 44

46 Four Mile Regional Exploration Joint Venture

47 Four Mile Exploration JV Alliance: 25% Quasar Resources: 75% Strategic tenement position 1248 km 2 Alliance free carried to decision to mine Outside Four Mile Project Area Limited exploration for coppergold by Quasar to-date substantial exploration potential 46

48 Four Mile Exploration JV Mining Lease Application Area Mining Lease Application Area ~150 km 2 Potential for sedimentary-hosted uranium throughout 47

49 Summary & Conclusions

50 Four Mile Project Strengths Large, high-grade deposit Amenable to lower cost, lower environmental impact In-Situ Recovery (ISR) mining technology Close to existing infrastructure and established ISR mine Access to highly experienced ISR mining team 49

51 Four Mile Project Strengths Positive support for Four Mile Project by SA government Long project life of 15+ years Uranium production near-term Highly prospective exploration tenement with potential for further expansion of uranium resource base 50

52 Conclusion The Four Mile Uranium Project: Australia s newest uranium project Potential to be the largest producing and highest-grade ISR uranium mine in the world 51

53 Cautionary & JORC Statements Cautionary Statement This presentation has been prepared by Alliance Resources Limited ( Alliance ). The information contained in this presentation is of a general nature only and does not constitute and offer to issue, or to arrange an issue, of securities or the financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision on the basis of this presentation, the investor needs to consider, with or without the assistance of a financial advisor, whether the investment is appropriate with due regard for their particular investment needs, objectives and financial circumstances. This presentation is based on internal company and joint venture partner reports, stock exchange announcements, stockbroker research and technical information believed to be reliable. To the maximum extent permitted by law, none of Alliance s directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault of negligence, for any loss arising from the use of the information contained in this presentation nor is any obligation assumed to update such information. In particular, no representation or warranty, express or implied, is provided as to its accuracy, completeness or currency of the information contained in this presentation. Alliance accepts no obligation to correct or update the information or opinions expressed in it. Opinions expressed are subject to change without notice and reflect the views of Alliance at the time of presenting. JORC Compliance Statement The information in this report that relates to uranium Exploration Results and Mineral Resources is based on information compiled by Mr K Bampton who is a Corporate member of both the Australian Institute of Geoscientists and The Australasian Institute of Mining & Metallurgy. Mr Bampton trades as Ore Reserve Evaluation Services. Mr Bampton has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bampton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. All other information in this report relating to Exploration Results, Mineral Resources or Ore Reserves for copper and gold is based on information compiled by Mr Stephen Johnston who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Johnston is a full-time employee of Alliance Resources Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Johnston consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 52

54 Contact Details Patrick Mutz Managing Director Alliance Resources Limited Suite 3, City Road Southbank Victoria 3006 T F info@allianceresources.com.au Website: 53