Alkane Resources is pleased to provide the Q4FY20 Activities Report. Please find below a summary of activities.
Tomingley Gold Operations
- Gold production on forecast for the quarter at 13,358 ounces, with site operating cash costs at A$981/oz and AISC of A$1,368/oz.
- Gold sales of 12,992 ounces for the quarter for revenue of A$30.2M at an average price of A$2,327/oz.
- FY2020 gold production was 33,507 oz (guidance 30,000 oz to 35,000 oz) with AISC of $1,357/oz (guidance $1,250/oz to $1,400/oz).
- The Tomingley Gold Operations (TGO) FY2021 plan has been updated to take into account the sustained higher gold price.
The plan incorporates extensive grade control and infill drilling conducted in the Wyoming 1 and Caloma 2 resources, changes to the cut-off grade within the underground, and a cut-back of the Caloma pit.
- Guidance for FY2021 is 45,000 to 50,000 oz at an AISC of A$1,450 to A$1,600 per ounce.
- This is a significant increase in production over the Board-approved plan to commence underground mining in September 2018, and confirms the geological upside expected during underground mine development at TGO. The modest increase in forecast cost per ounce reflects the incorporation of lower grade material into the schedule that is now profitable at higher gold prices.
- The TGO Mine Plan does not yet incorporate mining of the Roswell or San Antonio deposits, located to the immediate south of TGO. Approval of the developments at Roswell and San Antonio would further increase production, with a lower cost base. The process of securing approvals with the NSW Government is underway.
- Infill drilling within the Roswell and San Antonio Inferred Resources south of TGO continued and a number of thick, high grade gold intercepts were recorded, such as:
- RWRC180D 69.0 metres grading 9.12g/t Au from 218 metres;
- incl 6.7 metres grading 28.0g/t Au from 207.3 metres;
- incl 1.0 metre grading 104.0g/t Au from 274 metres.
- Assay results were received for the final diamond core drill hole of the initial Boda program and modelling of all the results indicated a +0.2g/t AuEq* subvertical zone of significant gold-copper mineralisation; approximately 500 metres north-south strike length, 400 metres wide and >1100 metres vertically.
- Within this envelope is a +3.0g/t AuEq* high-grade pod approximately 150 metres long, 100 metres wide and >500 metres vertically. Both zones remain open along strike and at depth
- A 30,000 metre follow up drill program at Boda has recently commenced
- Cash, bullion and listed investments position totalled A$98.4M.
- Shareholding remained at 12.7% of ASX listed gold developer Calidus Resources Ltd (ASX:CAI) at end of June quarter.
- Shareholding of ASX listed gold developer Genesis Minerals Ltd (ASX:GMD) was 15.5% at end of June quarter. GMD has recently made a strategic acquisition and announced a parallel fundraising. Alkane was a sub-underwriter in the rights issue component of that fundraising and as a result has potential to own 19.9% of Genesis on completion of the rights issue (subject to Genesis shareholder approval).
- Alkane’s Board has committed to the demerger of ASM (see ASX Announcement 20 May 2020) and shareholders will vote on the demerger at an EGM on 16 July 2020.
- The construction and start-up of commissioning of the commercial pilot plant in Daejeon, South Korea to produce high purity metals with low emissions was completed on time and budget. Initial focus of the JV is production of zirconium, titanium, rare earths for permanent magnet alloys (Nd, Pr).
- During the quarter the Korean Government awarded a US$4.5 million grant to ASM’s research and development partner ZironTech, as part of the Korean Government’s US$5 billion Industrial Technological Program (ASX Announcement 4 June 2020).
- The commercial pilot plant has successfully produced a titanium metal alloy ultilising 45% less power than current industry methods (ASX Announcement 2 July 2020). Neodymium alloy was also produced (ASX Announcement 13 July 2020).
- Work on completing flotation test work to deliver an increased ore feed grade to the solvent extraction plant continued during the quarter. The integration of flotation into the proven flowsheet is a key part of targeting a reduction in the capital and operating costs for the development of the Dubbo Project.
* AuEq see “NORTHERN MOLONG PORPHYRY PROJECT (NMPP)” section of Quarterly Report for basis of calculation