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- Alkane Resources (ALK) has summed up its quarterly activities at its Tomingley Gold and Dubbo projects
- Gold production at Tomingley for the quarter reach just under 7000 ounces – which is above the company’s forecast
- Gold sales also improved significantly from the previous quarter
- Drilling returned high-grade results at Roswell but there have been some delays at the San Antonio prospect
- Alkane’s Dubbo project in New South Wales is a rare earths project and considered the most advanced poly-metals project outside of China
- As part of a joint venture with Alkane’s subsidiary: Australian Strategic Metals and South Korean company: Zirchon Tech, a clean, sustainable pilot plant is being developed to produce high purity metals
- Planning for the demerger of Alkane’s subsidiary is ongoing and the company expects to lodge the documents before mid year
- Alkane is up 6.80 per cent and shares are trading for 78.5 cents each
Alkane Resources (ALK) has summed up its quarterly exploration activities at its Tomingley Gold and Dubbo projects.
Tomingley Gold Operations
Tomingley Gold Operations (TGO) is a wholly-owned subsidiary of Alkane. Mining focuses on four deposits including: Wyoming One, Wyoming Three, Caloma One and Caloma Two.
Operations at the Tomingley gold processing plant first commenced in 2014 and underground mining development commenced last year.
TGO reportedly performed well with a total of 6929 ounces of gold being poured for the quarter. The quarterly cash costs for the processing plant were $1024 per ounce with an all-in sustaining cost (AISC) of $1441 per ounce.
Guidance for the 2020 financial year is unchanged, sitting at between 30,000 and 35,000 ounces of gold.
For the December quarter, 9143 ounces of gold was sold, compared to 6997 ounces in the previous quarter. Total revenue generated was $19.1 million, representing roughly a $4 million increase.
Underground Mining Development
Development of the underground mine from the base of the Wyoming One pit is continuing on schedule, with both the main decline and vent portals progressing.
Surface drilling is currently ongoing to test ore extensions of the existing underground.
Project Extension
Encouraging results were received from an ongoing 60,000 metre drilling program at the San Antonio and Roswell deposits.
During the first phase of drilling at Roswell, a highlighted result included a grade of 139.5 grams per tonne of gold from 199 metres.
Alkane has started consulting key stakeholders and has applied for approval to develop an exploration drive. Additionally, it plans to seek approval for open cut and underground mining development
Regional Exploration
During the quarter, Alkane focused on increasing drilling density in the Roswell and San Antonio prospects as well as testing strike extensions.
A total of 23,812 metres of reverse circulation (RC) and core drilling was completed.
Results from the recently completed first phase at Roswell included 84 metres at 4.06 grams per tonne (g/t) of gold from 223 metres and 2.9 metres grading at 78.6 g/t of gold from 248 metres.
An initial Inferred Resource of 7.02 million tonnes grading 1.97g/t gold at Roswell was released earlier this week.
The resource will be converted to Indicated status once further drilling has taken place.
As San Antonio drilling is still continuing, results are still outstanding and the initial resource is now expected in March.
Corporate
On November 28, Alkane announced a capital raising which included a placement and a non-renounceable, non-underwritten 1 for 8 rights issue that was priced at $0.55 per share. In total, $40.7 million was raised.
Dubbo Project
The Dubbo project is located near Dubbo which is about 400 kilometres from Sydney, New South Wales.
It is considered a multi‐commodity asset with zirconium, niobium, hafnium and rare earths.
Outside of China, this project is thought to be the most advanced poly-metallic project and, therefore, can become a significant global producer of critical technology metals.
The project is construction ready, land rights and all necessary approvals are in place and a flowsheet has been established.
Last year, Alkane’s subsidiary, Australian Strategic Materials (ASM), entered a joint venture with Zircon Technology.
Zircon Tech is a South Korean company who is constructing a clean metals pilot plant to convert Dubbo Project metals to metals of high purity.
The company reports significant progress was made at the plant which is located near the Chungnam National University in South Korea.
The delivery and installing of equipment is well underway with arrival due this quarter. In the second quarter, the pilot plant is expected to be commissioned and produce between 10 and 20 kilograms of metals per day.
A number of trials are planned to produce different metals from the Dubbo project with zirconium and hafnium being the highest priorities.
As reported in the announcement, “the metals industry is responsible for about 40% of greenhouse gas emissions from industrial processes.”
This has led to a growing number of parties, like Zircon Tech and Alkane, pushing towards clean, sustainable manufacturing.
Product Marketing
Also backing this project, is the Australian Government. The government aims to secure the future of rare earth and mineral projects, particularly for defence and global security.
The metals at the Dubbo project are critical for the defence industry as well as for electronic sensors, smart devices and civilian technologies such as clean energy technology.
Strategy
In October last year, Alkane announced it was considering a demerger and listing of ASM.
In the December quarter, Alkane discussed with the Australian Taxation Office and the ASX about the proposed transaction.
Implementation planning in relation to staffing, governance and other reporting requirements for the new listed entity progressed.
The company has started drafting a transitional services agreement between Alkane and the demerged entity.
Alkane is up 6.80 per cent and shares are trading for 78.5 cents each at 3:52 pm AEDT.
