Latest News Archives - Alkane Resources Ltd
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Dubbo Project: Engineering and Financials Update

Multi commodity miner and explorer, Alkane Resources (ASX: ALK), has completed an engineering and financials review of its zirconium, niobium, hafnium and rare earths project which confirms a viable project of significance.  The details of this review are in the following pages of this announcement and should be read in their entirety.

Among key points from Alkane’s project review are, that in circumstances where the Project is successfully funded and developed:

  • The Project could generate A$4.7 billion free cash flow at the 20 year base case with a forecast capital cost of A$1.3 billion base case build or A$808 million for the stage 1 build.
  • Internal rate of return is estimated between 16.1 to 17.5 per cent, depending on whether capital is managed to build the Project in two stages or proceeds to a single 1mtpa plant, with both alternatives confirmed viable.

Read More…

Tomingley Underground Resource, Reserve & Development  

  • Following an extensive core drilling program in 2017, Mineral Resources and Ore Reserves for the Tomingley Gold Operations below the existing open pits have been re‐estimated at a cut‐off of 2.4g/t gold:
    • Total Mineral Resources    1.45Mt grading 3.7g/t Au (175,000oz)
    • Total Ore Reserves     0.73Mt grading 3.1g/t Au (74,000oz)
  • An independent mining study has determined that via decline access from the Wyoming One and Caloma pits, the deposits can be viably mined using standard long hole stoping with rib pillars and long hole stoping using cemented rock fill.
  • Mining and grade reconciliation to date in the pits provided support to including Inferred Resources in the planned underground mining for a mineral inventory of:
    • Mineral inventory       1.24Mt grading 2.7g/t Au (108,000oz)
  • The base case development would recover 99,000 ounces of gold over a 40 month development and mining period for revenue of A$159 million at a gold price of A$1,600 per ounce. Cash costs were estimated to be A$1,150 to A$1,250 per ounce. Cash outflow to recover first ore is estimated at A$16 million.  The Company’s cash and bullion position at the end of the previous quarter was A$69.0 million.
  • The company is seeking to continue to generate cash from its gold business by:
    • Appointing a project manager to confirm the development economics and prepare a detailed execution plan for an investment decision by December 2018.
    • Continuing extensive exploration in the immediate mine area to establish further resource potential including re‐evaluation of the Peak Hill Gold Mine.
    • Evaluating investment opportunities that expand the gold business.

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TGO WINS “MINING OPERATION OF THE YEAR” AWARD

  • Alkane’s central west NSW gold mine wins NSW Minerals Council Suppliers award
  • Operating since January 2014, produced 69,000 ounces gold in FY17
  • Tomingley Gold employs 114 staff and 42 contractors

Tomingley Gold Mine in central west New South Wales, owned by Alkane Resources (ASX: ALK), has won “Mining Operation of the Year” in the NSW Minerals Council Suppliers Awards.

The mine is based on four gold deposits and is located 50 kilometres south west of Dubbo.

Since opening in January 2014 the operation has been an open cut mine, with this scheduled to be completed in the September quarter of 2018.

The resource has underground mining potential which Alkane is currently investigating.

Production of 69,000 ounces of gold in FY17 was achieved despite severe rains affecting first half production, with FY17 revenue at A$117.3m and profit before tax and non-recurring items of A$17.1m.

Managing Director of Alkane, Nic Earner, said the award was a tribute to Alkane’s Tomingley workforce and contractors, particularly Emeco, Maxfield Drilling, and Reveg Services, and also the extent to which the operation had become part of the local community.

“The mine employs locals, many of whom we’ve trained to be part of the operation, and we have also given importance to the local environment and community events as part of our operations,” Nic Earner said.

Among factors contributing to Tomingley’s award win were:

  • Fleet improvement and use of a mobile crushing plant to improve throughput and productivity
  • Ongoing drilling to optimise a focus on high grade ore
  • Local infrastructure improvements, including a community hall upgrade, sealing of village streets, new works at the Tomingley Racecourse & Recreation Reserve and providing top up water supply to the village from a bore water supply line
  • Upskilling of the local workforce and close working relationships with contractors

Alkane has been involved in the local region for over 30 years, as an explorer and operator of the Peak Hill Gold Mine, with cash flow from Tomingley having contributed to developing Alkane’s A$1.3 billion Dubbo zirconium, rare earths, hafnium and niobium project.

The project is development and construction ready, with project financing underway and current projected construction start in 2019.

Media Release: PM Turnbull Flags Greater Cooperation with USA on Rare Earths and Strategic Materials

  • PM flags strengthening ties with United States
  • Key components are infrastructure, trade and a Strategic Partnership on Energy
  • Energy Partnership to focus on “rare earths and high performance metals”

As Prime Minster Turnbull concluded his recent visit to the United States, he issued a statement indicating joint cooperation with the US on rare earths and high performance metals.

This has direct relevance for multi commodity explorer and miner, Alkane Resources (ASX: ALK)*, which is moving towards final commitments and financing of its A$1.3 billion Dubbo Project which contains deposits of rare earths, hafnium, niobium and zirconium.

These minerals have been designated “critical” in the US# and the Prime Minister’s statement said:

“We launched the Australia-United States Strategic Partnership on Energy in the Indo-Pacific, and intend to work together on strategic minerals exploration, extraction, processing, and research and development of rare earths and high performance metals.”

A feature of Alkane’s Dubbo Project, in central west New South Wales, is that it offers a source of critical technology metals that is independent of China and traditional titanium sands production.

According to Alkane Managing Director, Nic Earner, the governments of Australia and the United States have recognised the value of an alternative source of rare earths and high performance metals.

“As there is increasing demand for the metals that are critical for uses in aerospace, renewable energy and electric cars, Alkane as a future supplier of these metals is likely to benefit from this new government prioritisation which puts the project directly into the national interest of both countries,” Mr Earner said.

Future production from Alkane’s Dubbo Project and uses of these metals includes:

  • Rare earths – for permanent magnets for wind power turbines, electric vehicles and industrial robots, as well as applications in medical imaging and smartphones
  • Hafnium – for increasing high temperature resistance, especially in space, aerospace and separate uses in semi-conductors, with Alkane’s resource positioning it as a leading source of supply
  • Niobium – a steel strengthening agent, with aerospace applications
  • Zirconium – for ceramics, fuel cells, jet turbine coatings and medical and smartphone applications

Establishing the importance of Alkane’s independent positioning is that China currently produces more than 95% of the world’s zirconium chemicals, over 90% of high-value rare earths, with Brazil providing 85% of the world’s niobium.

Alkane’s Dubbo Project is construction ready subject to financing and has a mine life of over 70 years.

Funding of the project to date has been assisted by Alkane’s nearby Tomingley Gold Operations, which in 2017 produced revenue of A$117.5m and profit before tax and non-recurring items of A$17.1m.

* Owner and operator of Alkane’s Dubbo project is wholly owned subsidiary, Australian Strategic Materials Ltd.

# https://pubs.er.usgs.gov/publication/ofr20181021

Quarterly Activities Report to 31 December 2017

Dubbo Project (DP)

  • Hafnium oxide exceeding 99.8% HfO2, and 99.9% (Hf+Zr)O2, was produced using a proprietary process to separate hafnium from zirconium at the demonstration pilot plant at ANSTO.
  • The modularised build study output is being reviewed and incorporated into an updated project execution and financial model, expected to be released in February.
  • Upward price movements in the zirconium chemicals and powders have continued.  Rare earth magnet material prices have returned to their medium term upward trend.

Tomingley Gold Operations (TGO)

  • Continued solid performance sees guidance for the full year lifted to 70,000 to 80,000 ounces of gold at a reduced AISC of A$1,000 to A$1,100.
  • Site operating cash flow for the quarter was A$4.6M1 (YTD: $22.9M) excluding increase in bullion on hand at fair value of $5.7M.
  • Quarter Results
    • Gold production was above forecast at 16,641 ounces.
    • Site operating cash costs were A$840/ounce with all in sustaining costs (AISC2) of A$1,058/ounce.
    • Gold sales 13,184 ounces for revenue of A$22.3M at an average price of A$1,694/ounce.
    • There were no open forward contracts at 31 December 2017.

Corporate

  • The Group’s cash position totalled A$57.7M with A$44.8M in cash and bullion on hand at fair value of A$12.9M, an increase of A$4.4M from the previous quarter.
  • Gavin Smith welcomed to the Board on election by shareholders.

Read more.

Hafnium Product Breakthrough Consolidates Dubbo Project Business Case

  • Alkane’s wholly owned subsidiary, Australian Strategic Materials Ltd (ASM), has developed high-purity hafnium  dioxide  products  tailored  to  meet  market  requirements.
  • Hafnium oxide exceeding 99.8% HfO2, and 99.9% (Hf+Zr) O2, has been produced using a proprietary process to separate hafnium from zirconium at the demonstration pilot plant at ANSTO.
  • Over the past 12 months, ASM has consulted extensively with industry to confirm growing market demand for high-purity hafnium, which currently depends on supply from the production of zirconium metal for specialty alloys and the nuclear industry.
  • Global shortage of  hafnium  anticipated  as  demand  is  poised  to  outstrip  current  supply.
  • Hafnium metal for super alloys is currently trading in a US$800 ‐ $900/kg range. The ASM business case assumes a conservative product price of US$500/kg for its oxide.
  • ASM will initially produce 25tpa hafnium to meet projected market demand, ramping up to higher quantities as required.

Read more.

TGO DRILLING AT DEPTH TO INFORM UNDERGROUND DEVELOPMENT STUDY 

Summary

  • Core drilling of the Wyoming One deposit has confirmed continuity and extension to the mineralisation below the existing open cut operation.
  • Results for the final 8 diamond core drill holes of the 23 hole program have been received.
  • The  drilling continued targeting of the Hangingwall Zone and Porphyry Zone to 300 metres below the planned base of the open cut.
  • Results include:
    • WY968D  5.14m @ 8.85g/t Au from 364.5 metres
      incl       2.0m @ 21.1g/t Au from 367.0 metres
    • WY971D  17.45m @ 2.5g/t Au from 309.1 metres
      incl    7.35m @ 4.85g/t Au from 309.1 metres
      and  39.8m @ 1.62g/t Au from 420.2 metres
      incl    1.89m @ 4.77g/t Au from 423.0 metres
      and    6.8m @ 4.74g/t Au from 450.2 metres
      incl    1.0m @ 26.2g/t Au from 451.0 metres
    • WY972D  18.42m @ 2.43g/t Au from 512.6 metres
      incl    9.8m @ 3.17g/t Au from 513.4 metres
  • Resource modelling has commenced and will be incorporated into the underground mining study scheduled for completion in Q1 2018.

Read the entire announcement here. 

Further significant drill intercepts at depth at TGO

  • Additional drilling of the Wyoming One deposit has proved continuity and extension to the mineralisation below the existing open cut operation.
  • 15 diamond core drill holes have been completed totalling 6,993 metres of a 23 hole program designed to confirm continuity within the ore zones previously identified, adding to the drilling completed late 2016.
  • The drilling specifically targeted the Hangingwall Zone and Porphyry Zone to 300 metres below the planned base of the open cut.
  • Results include:
    • WY954D 16.7m @ 2.52g/t Au from 178.3 metres
      • incl 4.0m @ 3.78g/t Au from 181 metres
      • and 4.0m @ 4.00g/t Au from 189 metres
      • and 47.15m @ 3.12g/t Au from 249 metres
      • incl 15.0m @ 5.71g/t Au from 253 metres
      • and 0.8m @ 26.7g/t Au from 278.4 metres
    • WY955D 12.0m @ 3.69g/t Au from 189 metres
      • incl 5.3m @ 5.63g/t Au from 192.7 metres
      • and 4.6m @ 3.51g/t Au from 206.2 metres
      • and 44.0m @ 2.19g/t Au from 306 metres
      • incl 18.25m @ 3.56g/t Au from 312 metres
    • WY957D 12.4m @ 3.40g/t Au from 378.6 metres
      • incl 7.25m @ 5.01g/t Au from 379.75 metres
      • and 8.45m @ 4.36g/t Au from 394.55 metres
      • incl 3.3m @ 8.35g/t Au from 395.9 metres
      • and 2.25m @ 16.4g/t Au from 476.75 metres

Read More…..