Quarterly Activities Report to 30 September 2020 - Alkane Resources Ltd
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Quarterly Activities Report to 30 September 2020

Alkane Resources has now released the Q1FY21 Activities Report. Please find below a summary of activities.

Tomingley Gold Operations

  • Gold production on forecast for the quarter at 11,499 ounces, with site operating cash costs at A$1,178/oz and AISC of A$1,575/oz.
  • Gold sales of 11,945 ounces for the quarter for revenue of A$27.0M at an average price of A$2,261/oz.
  • Guidance for FY2021 is unchanged at 45,000 to 50,000 oz at an AISC of A$1,450 to A$1,600 per ounce.
  • The Tomingley Gold Operations (TGO) Resources and Reserves have been updated (see ASX Announcement 18 August 2020) and now stands at:
    • Total Mineral Resources    9.45 Mt grading 1.9g/t Au (610,000oz)
    • Total Ore Reserves            2.97 Mt grading 1.8g/t Au (176,000oz)
  • The process of securing approvals with the NSW Government for development of the Roswell and San Antonio deposits is progressing as expected with community consultation underway (see ASX Announcement 19 August 2020). Preliminary plans include both open cut and underground mines at Roswell and San Antonio.

Exploration

  • Infill drilling within the Roswell and San Antonio Inferred Resources south of TGO continued during the Quarter with many high-grade intercepts (see ASX Announcements 16 July and 28 August 2020), such as:
    • RWRC298      102.0 metres grading 4.07g/t Au from 283 metres;
    •             incl      1.0 metre grading 57.8g/t Au from 304 metres.
    • RWRC313      62.0 metres grading 4.01g/t Au from 168 metres.
    • RWD040        22.1 metres grading 5.96g/t Au from 534.9 metres.
  • Assay results for the final diamond holes at Roswell experienced delays at the laboratory, which is occurring across the sector due to high demand. It is expected results will be released very shortly, closely followed by the updated Roswell Resource. Drilling continues at San Antonio.
  • The 30,000 metre follow up drill program at Boda continues. Assay results for the first set of diamond and RC holes also experienced delays at the laboratory. It is expected results will be released very shortly. A second diamond rig has been mobilised to the Boda drilling program, after the RC rig had completed a number of shallow holes.

Corporate

  • Cash, bullion and listed investments position totalled A$92.0M.
  • During the quarter Alkane began discussions with Macquarie Bank Limited for the provision of a A$20,000,000 working capital facility (“Facility”) and executed a committed letter of offer in October. The Facility will further strengthen Alkane’s balance sheet and operating liquidity and is subject to finalisation of documentation, legal due diligence and other conditions precedent. Satisfaction of conditions precedent and execution of final documentation is anticipated during this quarter and Alkane will provide an update to the market when this occurs.
  • Shareholding remained at 12.7% of ASX listed gold developer Calidus Resources Ltd (ASX: CAI) at end of September quarter.
  • Shareholding of ASX listed gold developer Genesis Minerals Ltd (ASX: GMD) was 19.9% at end of September quarter after GMD shareholder approval of a placement. The placement was the last stage of a fundraising that occurred to finance a strategic acquisition by GMD.
  • Alkane’s shareholders voted overwhelming in favour of the demerger of Australian Strategic Materials (ASX: ASM) at an EGM on 16 July 2020.
  • ASM listed on the ASX on 30 July 2020. ASM has subsequently performed strongly with current market capitalisation in excess of A$400M and recent share price highs above $4.00 per share. For Alkane shareholders who retained their ASM shares, a share price of $4.00 represents $0.80 for each Alkane share they held at the time of demerger, in addition to their ongoing Alkane investment. This is an excellent result that supports the shareholder’s vote at the EGM.
  • S&P Dow Jones Indices announced that Alkane would be part of the S&P/ASX 300 Index effective at the opening of trading on 21 September 2020.

Read the Full Quartley Report