Multi-commodity miner and explorer, Alkane Resources (ASX: ALK), has reported above forecast December quarter gold production at Tomingley Gold Mine at 6,929 ounces, with sales of 9,143 ounces for revenue of A$19.1 million at an average price of A$2,084 per ounce.
Low-grade stockpiles were predominantly processed during the quarter together with the first underground stope production. Guidance for FY20 remains unchanged at 30,000 to 35,000 ounces of gold at an AISC of A$1,250 to A$1,400 per ounce.
On the back of the excellent drilling results at the Roswell deposit near the Tomingley gold mine, with an Inferred Mineral Resource of 7.02 million tonnes grading 1.97 g/t gold (445,000 ounces), Alkane is expediting the process to move to future mine development in that area.
Alkane will continue with resource definition drilling over the remainder of the financial year and expects to release the initial resource for the San Antonio deposit in March.
During the quarter, significant progress was made in respect of the planned demerger of Australian Strategic Materials (100% owner of the Dubbo Project). Alkane expects to lodge documents with the ASX ahead of a shareholder meeting to vote on the demerger in the June quarter of 2020. The Dubbo project remains construction-ready, and the construction of the commercial-scale pilot plant as part of the investment in Clean Metal Processing Technology with Ziron Tech of South Korea is progressing well.
The Australian Government’s announcement in November on new financing measures to help build the critical minerals sector is an important initiative for major projects in Australia, including the Dubbo Project.
A capital raising was completed with a placement of $20 million, which was supported by existing institutions and introduced new Australian and global institutions onto the Alkane register. A rights issue further raised $20.7M from existing eligible shareholders, providing total funding to Alkane (before costs) of $40.7M.
The group’s cash and bullion position totalled A$91.7 million, with a further $4.7 million in cash associated with the capital raising received following the General Meeting in January 2020.