Alkane Resources: fifty golden years... and a bright future - Alkane Resources Ltd
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Alkane Resources: fifty golden years… and a bright future

Alkane Resources: a gold production company with a multi-commodity exploration and development portfolio.  Alkane has around 6,400 shareholders, including local investors interested in regional development.  The Company initially listed on the Australian Stock Exchange fifty years ago when Alkane’s primary objective was to search for hydrocarbons in the Sydney Basin, but the Company switched to gold exploration in the late 1970s.

Early exploration lead to the identification of gold potential at London-Victoria, near Parkes, and at Peak Hill in the Central West of New South Wales (NSW).  A resource was drilled at London-Victoria but the project was subsequently sold to BHP Gold.

Alkane’s senior management team is based in Perth, Western Australia.  We also maintain offices and operations in eastern Australia, with gold investments in Western Australia. We’re most active in:

To celebrate our golden anniversary, we’d like to reflect briefly on some highlights of our history and explain our vision for a bright future.

Peak Hill Gold Mine

400km north-west of Sydney, between the large regional centres of Parkes and Dubbo, the town of Peak Hill developed when gold was discovered there, in 1889.  Alluvial deposits were removed quickly, so underground mining commenced in 1890.  The increase in costs of labour and materials during WW1, caused the mine’s closure in 1917.

Almost 80 years later, following a feasibility study, in partnership with Associated Goldfields NL (AGF), Alkane commenced open-cut mining at Peak Hill.  From 1996 to 2005, the Peak Hill Gold Mine produced 153,000 ounces of gold and employed around 50 people; most of whom were locals, including Wiradjuri people.  Alkane rehabilitated the surrounds of the historic mining area as a Tourist Mine and today, self-guided tours attract many visitors to the ‘little town with the heart of gold’.  Alkane acquired AGF interest and towards the end of oxide operations, commenced an investigation of the large underlying sulphide gold-copper resource.  Due to technological advances and an improved gold price since 2005, underground mining at Peak Hill may be economically viable once more.  This depends on the quality and structure of the remaining ore resource, which Alkane is investigating.

The Dubbo Project

Owned by Alkane’s subsidiary Australian Strategic Materials (ASM), the world-class, construction-ready Dubbo Project stands to become a strategic and significant producer of critical materials for advanced technologies required for energy efficiency, emissions minimisation and electric mobility: zirconium, rare earths, hafnium and niobium.  With a potential mine life of 70+ years, it is the most advanced project of its kind outside China.  ASM is monitoring market demand for these critical materials and will seek further investment for this project when the time is right.

BC Iron

Whilst looking for diamonds in the East Pilbara of Western Australia, Alkane discovered palaeochannel iron deposits.  In October 2006 the Company and its partner, the Randolph Syndicate, reached agreement with Consolidated Minerals Limited to float a new company, BC Iron Limited (BCI), based around these deposits.  BCI successfully listed on the ASX in December and planned a major RC drilling program to complete an initial assessment of the palaeochannel systems with a view to focussing on the areas with potential to achieve significant tonnages of direct shipping quality iron ore product.  BCI raised $6m in the IPO by the issue of 24M shares @ 25c.  Of the total 54M BCI shares issued, Alkane retained 16.67% and its shareholders were given priority rights to purchase more.  BCI commenced commercial production in 2011.  At its peak in 2014 the shares in BCI were worth over $4 each with a corresponding market capitalisation of over $500M.

McPhillamys Gold Deposit

In the early 2000s Alkane identified an area to the south-east of Orange, in the Central West of NSW that it considered prospective for gold and copper.  In 2005 Alkane signed a JV with the large US gold company, Newmont Exploration Pty Ltd, to farm into the McPhillamys exploration area, approximately 35km to the east of Orange.  In late 2006 the JV announced its first drill hole results, which included an impressive 123 metres grading 1.96 g/t gold from 0 metres (surface).  In July 2010 the initial McPhillamys Resource was released, containing a large 2.96 million ounces of gold and 60,000 tonnes of copper.  The deposit was subsequently sold to Regis Resources Limited (RRL) in 2012, from which Alkane received 17.5 million RRL shares for its interest.  These shares were valued at approximately $75 million at the time of transaction.

The cash generated from the subsequent sale of those shares provided funds which, together with existing shareholder funds, enabled open cut mining operations to be developed at Tomingley for a total capital cost of $116 million with no debt.

Tomingley Gold Operations (TGO)

TGO is a producing gold mine, wholly owned by Alkane.  In 2001, Alkane discovered a significant gold deposit about 50km south-west of Dubbo, near Tomingley adjacent to the Newell Highway.  Substantial gold resources were identified by the end of 2011 and development approvals granted in early 2013.  Construction of the processing plant to recover gold from open cut operations was completed on time and budget in 2014.

From 2014 to 2018, TGO produced 60,000 to 80,000 ounces of gold per year from four open-cut pits generating substantial cash flow.  TGO has progressively rehabilitated these sites and surface mining has ceased.  TGO is now developing underground, which is expected to extend the mine life by at least three years, and produce over 90,000 ounces of gold.  In addition an active exploration program continues to the south of the mine towards Peak Hill, with significant gold intercepts drilled, sufficient for Alkane to be progressing to a resource drill out of those mineralised areas.

Alkane’s performance at TGO was recognised by its industry peers in 2018 when it won the Mining Operation of the Year as part of the New South Wales Minerals Council Suppliers Awards.

As part of Alkane’s commitment to leave a positive legacy in the communities in which it operate, the TGO Community Fund supports local projects that will outlive the mine, promoting education and training, economic development, infrastructure and community connectivity.

Social and environmental responsibility

As the first link in a sustainable supply chain, Alkane upholds stringent social and environmental standards for the mining and processing of all our products.  Alkane’s mining, processing and rehabilitation activities are carefully designed with wildlife safety and low environmental impact in mind.  The Alkane team achieved two NSW Mining Health, Safety, Environment and Community Awards in 2015 for Environment and Community Leadership and for Environment Excellence.  This followed an earlier NSW Explorer of the Year Award in 2002.

In 2016 we established the Toongi Pastoral Company (TPC) to manage the 3,500 hectares of farmland, assets and biodiversity offset areas associated with the Dubbo Project.  Wholly owned by Alkane, TPC produces sustainable and ethical mixed farming produce.  We are proud to have invested in agriculture to demonstrate that mining, farming, land management and nature conservation can co-exist in harmony with the local community.

A strategy for strength

Alkane’s current priority is our multi-faceted gold investment strategy. To increase value for shareholders and strengthen the Company for the long-term, we are using our strong cash resources to fund:

  • Underground mining at Tomingley Gold Operations (TGO). Learn more
  • Continued exploration of prospects with confirmed high-grade gold mineralisation in the Tomingley region. Learn more
  • Investigation of the feasibility of extending the Peak Hill Gold Mine, which Alkane Resources operated as an open pit from 1996 to 2005. Learn more
  • Maintain an exploration effort in the Central West of NSW to provide a development pipeline of new projects.
  • Investment in junior gold mining companies and projects with high potential to which Alkane can bring additional capital, expertise and operating capability, for mutual benefit. Learn more

Alkane Resources aims to extend our golden record for another fifty years.  We welcome inquiries from existing shareholders, potential investors or any interested parties, so please get in touch.