Uranium miner Energy Resources of Australia Ltd. (ERA.AU) on Thursday said it will spend about A$120 million exploring an untapped deposit that could extend the life of its Ranger mine in Australia's Northern Territory.

ERA also said it has decided not to proceed with construction of a heap leach facility, which would have used acid filtration to process low-grade ore. While technically viable, ERA said the facility's high capital cost and present economic assumptions limit its value.

One of the world's biggest uranium mines, Ranger is close to running out of ore. ERA said construction of an exploration decline at the untapped Ranger 3 Deeps resource is expected to commence in May next year, subject to regulatory approvals.

The company, which counts Rio Tinto Ltd. (RIO.AU) as its majority shareholder, also reported a A$121.7 million first-half loss after heavy rains shut down Ranger for months.

ERA forecast full year uranium output in 2011 of 2,600 metric tons, in line with recent guidance.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

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