Melbourne, May 30, 2006 (ABN Newswire) - The Directors of Alliance Resources Limited (ASX: AGS) are pleased to announce that Stage 1 of the Alliance South underground development contract has been awarded to Deckoss Mining Ltd, which recently completed the underground contract at Mineral Hill in New South Wales. The contract is scheduled to commence in June 2006.

Highlights:

- Maldon exploration decline awarded to Deckoss Mining Pty Ltd.

- Mobilisation and mining scheduled for June 2006.

- Decline budgeted to cost $7 million over 15 months.

- This announcement follows previously reported high-grade uranium intercepts from cored drilling at Beverley 4 Mile prospect earlier this month:

0.7 metres grading 1.070% pU3O8
2.1 metres grading 0.390% pU3O8
1.3 metres grading 0.335% pU3O8


Stage 1 involves the development of 1,900 metres of exploration decline and 460 metres of access & sill drives to permit close-spaced drilling and bulk sampling of the Alliance South mineralisation for trial processing through the Company's Maldon treatment plant. Stage 1 development is budgeted to cost $7 million over 15 months. In addition, a $1.5 million dam is to be constructed adjacent to the treatment plant to manage the mine water from dewatering the decline route.
The decline is an extension of the existing decline at Union Hill and is designed to parallel the Eaglehawk Reef, the main producing reef at Maldon. The decline will also be used as a platform for underground drilling for possible remnant mineralisation to the east in the vicinity of Union Hill, Union Hill South and Alliance lodes as well as testing the Day Dawn target to the west.

If successful, the Company will be well placed for Stage 2 development of a ventilation rise, internal decline and further horizontal development to permit production mining. The decision to recommence development at Maldon comes just 2.5 years after the Company commenced a detailed geologic review of the historic high-grade goldfield, which produced 1.7 million ounces of gold between 1856 and 1926 at an average recovered grade of 28 g/t.

Compliance Statements:
The information in this report that relates to Exploration Results for the gold is based on information compiled by Mr Stephen Johnston. Mr Johnston is employed full-time by Alliance Resources Ltd and is 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 publication of this information in the form and context in which it appears.

The information in this report that relates to Exploration Results for uranium is based on information compiled by Mr Andrew Bowden. Mr Bowden is employed part-time by Alliance Resources Ltd and is a Competent Person as defined in the 2004 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Bowden consents to the publication of this information in the form and context in which it appears.