Quarterly Activities Report to 31 December 2018 - Alkane Resources Ltd
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Quarterly Activities Report to 31 December 2018

Tomingley Gold Operations

  • Development of the underground operation has commenced with both the main decline and vent portals established.
  • Quarter Results
    • Gold production was above forecast at 11,111 ounces.
    • Site operating cash costs were A$846/ounce with AISC of A$1,051/ounce.
    • Gold sales were 23,841 ounces for revenue of A$40.9M at an average price of A$1,716/ounce.
  • Guidance for FY19 has increased with production of 35,000 to 40,000 ounces of gold at an AISC of A$1,050 to A$1,150 per ounce.

 

Corporate

  • Cash, bullion and listed investments position totalled A$80.5M
    • A$73.7M in cash, bullion on hand at fair value of A$2.0M, and $4.8M of listed investments at market value.
  • Completed strategic placement into ASX listed gold developer Calidus Resources Ltd (Calidus). At the end of the quarter Alkane holds ~10.2% in Calidus.
  • The Company did not progress with its proposed investment into gold exploration company Explaurum Limited (ASX: EXU); the deposit and a break fee of $400,000 were paid to the Company.

 

Dubbo Project

  • Financing effort continues in a volatile global market:
    • Continued increasing environmental legislation is affecting supply of Chinese zirconium chemicals and powders.
    • Ferro-niobium prices remain high as steel companies continue to look to substitute ferrovanadium, which is facing short supply.
    • China’s rare earth permanent magnet industry continues to forecast increasing demand.

 

Exploration

  • The extensive regional exploration program underway around TGO continued. This program has the objective of defining additional resources that have the potential to be mined either via open pit or underground operations and fed to TGO.
  • 24 RC drill holes for a total of 4,266 metres testing the gold resource potential of the Roswell prospect were completed as part of this program. One diamond core drill hole was completed to a depth of 372.2 metres characterising the mineralisation at the San Antonio prospect. Assays are pending and finalised results will be presented in a separate announcement.

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