TOMINGLEY GOLD PROJECT
Gold  – New South Wales
Alkane Resources Ltd 100% (subject to separate royalty agreements with Compass Resources NL, Golden Cross Operations Pty Ltd and Climax Mining Ltd)

The Tomingley Gold Project (TGP) extends over 60 kilometres from near Parkes in the south, to north of Tomingley in the Central West of New South Wales and covers a narrow sequence of Ordovician volcanic rocks. The Wyoming Prospect, within the TGP, is situated about 14 kilometres north of the Company’s Peak Hill Gold Mine and immediately north of the historic 70,000 ounce gold producing Myalls United Mine (McPhails).

The Wyoming area forms one of a number of prospects and gold occurrences, including Peak Hill, located along this volcanic belt.  Gold mineralisation at Wyoming has a close spatial relationship to a feldspar porphyry which intrudes into andesitic volcaniclastic rocks near their western contact with a more pelitic sequence.  Mineralisation is associated with extensive alteration and quartz veining of the porphyry and volcanic rocks.  Several distinct target areas have been identified to date within a three kilometre corridor extending from McLeans in the south, through Wyoming One to Wyoming Three in the north.  A potential new deposit has recently been discovered at Caloma which is located 500 metres east of Wyoming Three

Much of the Wyoming area is covered by transported and unmineralised clay sediments and this has impacted on both the exploration techniques used to locate and define orebodies, but also on development options and costs.  This cover ranges from about 5 to 10 metres at Wyoming Three and Caloma, to more than 60 metres over Wyoming Two.  The major orebody at Wyoming One averages 25 metres of cover.

Since 2001 more than 130,000 metres of drilling has been completed in approximately 1,300 holes.  Expenditure to date has totalled A$7.5 million, or approximately A$12 per resource ounce defined.  This level of expenditure is well inside the industry average of A$25-30 per resource ounce.

At 31 December 2006, Identified Mineral Resources stood at:

These Mineral Resources are based upon information compiled by Mr Terry Ransted MAusIMM (Principal, Multi Metal Consultants Pty Ltd) who is a competent person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.  Terry Ransted consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.  The full details of methodology were given in the 2004 Annual Report.

Feasibility Study

Feasibility studies have been ongoing since 2005 and have considered various development scenarios, most of which involve all mining and infrastructure to be located at the Wyoming site, about 2 kilometres south of the Tomingley town site.

The current conceptual development consists of two open pit mines, Wyoming One and Three, followed by an initial underground operation focussed on Wyoming One.  Gold production would be through a conventional CIL gold recovery circuit at an open pit rate of 0.5 to 1.0 million tonnes per annum followed by an underground mine at 0.25 million tonnes per annum.  This treatment rate would recover 35,000 to 70,000 ounces of gold a year for a minimum of six years. It is anticipated that the current feasibility study should be completed by mid 2007, leading to a final definitive feasibility study and hopefully a development decision by the end of the year.

Capital costs remain crucial to the financial viability of the project and the Company has been actively reviewing available plant and equipment throughout Australia.  As the final specifications are not yet available, no plant has been sourced to date.  A 1Mtpa operation is anticipated to cost around A$40 million.

While general industry operating costs have escalated over the last few years, the TGP is located in an area of substantial existing infrastructure with the major Newell Highway transecting the project, linking a number of towns with a regional population base exceeding 150,000.  No camp facilities are required and the workforce can be sourced locally.  A natural gas pipeline and railway are located five kilometres west of Tomingley, and power is available from the New South Wales state grid.  These factors should help minimise the impact of rising costs.  Water supply remains an issue but it is thought that a pipeline could be laid from the Macquarie River at Narromine, 40 kilometres to the north of the project site.

Exploration

The TGP is considered to have substantial exploration potential and while the immediate focus is the development of the Wyoming deposits, numerous targets remain to be evaluated.  Specifically in the Wyoming area, resource potential exists at Caloma, Wyoming Two, McLeans and deeper underground potential below the historic Myalls United workings. 

Caloma was located early in 2006, when aircore drilling of the Patons East target was extended to the south to test an aeromagnetic anomaly.  A Wyoming style porphyry intrusive with associated quartz veining and alteration was identified beneath 5 metres of transported clay cover.  Follow up aircore and RC drilling tested a north-south strike length of 600 metres.  Gold mineralisation was recorded within a number of east-west and north-south structures within and adjacent to the porphyry and additional drilling is in progress to establish a resource potential.

Full details of results are shown in the ASX Releases or Quarterly and Annual Reports in this web site.