Uranium outlook goes bush

The South Australia uranium explorer is still in shock after the state government's decision last Friday to protect the Arkaroola region in the Flinders Ranges, home to the purple-spotted gudgeon, spidery wattle and yellow-footed rock wallaby.

Can we add endangered Premier? Mike Rann, visiting the area last August, was spellbound by the "compelling beauty" and ordered the ground to be given "unprecedented" protection.

Emerging from a trading halt yesterday, Marathon shares were smashed by 38 per cent. Chairman Peter Williams meets Resources Minister Tom Koutsantonis tomorrow for a robust exchange of views.

Arkaroola covers Marathon's flagship Mt Gee project, the country's fifth-biggest undeveloped uranium mine.

Marathon has spent $20 million on Mt Gee in capitalised costs and $10m in written-off direct costs and is on the books at $15.7m. Williams may care to ask the good minister why Marathon was invited to renew the lease in January (which it did) when moves to protect the area were in train.

Another issue is compensation, which Rann says the government will consider. If unsatisfied, Marathon will sprint to the courts.

It's been a bummer of a year all round for Marathon, which was trading at 80c before the Fukushima disaster in March. Until now, SA was seen as the one of the most mining- (and especially uranium-) friendly states.

Marathon didn't help its own cause, having been found guilty in 2008 of dumping radioactive waste.

In any event, uranium mines are notoriously hard to develop. Just ask Alliance Resources, which owns 25 per cent of the nearby Four Mile mine. Four Mile was meant to be Australia's next uranium mine, but Alliance and its US partners are in a nasty legal spat over native title.

Alliance yesterday said Four Mile would not be affected by the Arkaroola decision, although 38 per cent of the wider permit will be excised. We rate both stocks as avoids, although in the case of Marathon any compensation may eclipse its $13m market cap.

IMF Australia (IMF) $1.515

ARE Criterion's eyes deceiving him, or has the constant volley of legal potshots in the corporate sector abated? Hmmm -- it's off to the optometrist.

The litigation funder's update yesterday certainly suggests a slowdown: work in hand (as measured by the value of claims) stood at $1.77bn as of June 30, short of the targeted $2bn. But as IMF's Hugh McLernon points out, it's more a case of timing with a slew of new cases yet to be signed off.

xo.sorcha.ox: The Yellow-footed Rock-wallaby.

30, Female. Book obsessed, day-dreaming Pisces. Law graduate. History nerd. BtVS tragic. Lives with partner (SJ) and dog-son (Bailey) in a tiny town located in one of the most magnificent places on earth: the Flinders Ranges. Will share experiences with vegetarian cooking, being creative, a love of reading and Jane Austen, written correspondence, travel, gardening, all things handmade/homemade, home renovations, and anything else encountered along the way. Thank you for taking the time to visit my blog. I really appreciate any suggestions, feedback and comments you may like to share, so please dont be afraid to leave them, and it'd be wonderful to see you return often. Feel free to browse as much as you like, but I do have just the one request: Please do not take any original content without my prior permission, but dont be scared to ask: I'm fairly generous. Email sorcha dot sidhe at gmail dot com.