Quarterly Activities Report to 31 December 2020 - Alkane Resources Ltd
Level 12, 37 Bligh Street +61 2 8233 6168 contact@irmau.com

Quarterly Activities Report to 31 December 2020

Tomingley Gold Operations (TGO)

  • Gold production above forecast for the quarter at 15,919 ounces, with site operating cash costs at A$720/oz and AISC of A$1,201/oz.
  • Gold sales of 16,613 ounces for the quarter for revenue of A$38.2M at an average price of A$2,302/oz.
  • Guidance for FY2021 increased to 47,000 to 52,000 oz at an AISC of A$1,450 to A$1,600 per ounce.
  • The process of securing approvals with the NSW Government for development of the Roswell and San Antonio deposits is continuing. Feasibility plans that include both open cut and underground mines at Roswell and San Antonio are expected to be finalised in the coming quarter, once the San Antonio Indicated Resource is completed.

Exploration

  • Infill drilling within the Roswell and San Antonio deposits south of TGO has been completed with most results received and many high-grade intercepts reported (see ASX Announcements 28 October and 16 December 2020), such as:
RWD04221.0 metres grading 3.46g/t Au from 349 metres;
and6.0 metres grading 2.22g/t Au from 382 metres;
and20.7 metres grading 10.3g/t Au from 414 metres;
incl8.0 metres grading 23.9g/t Au from 420 metres.
RWRC379D45.0 metres grading 6.14g/t Au from 380 metres;
incl1.0 metre grading 102g/t Au from 391 metres.
RWRC4553.0 metres grading 5.12g/t Au from 75 metres;
and6.0 metres grading 5.46g/t Au from 158 metres;
incl1.0 metre grading 14.8g/t Au from 159 metres;
and52.0 metres grading 6.37g/t Au from 172 metres;
incl3.0 metres grading 58.3g/t Au from 175 metres.
  • On completion of the drilling at the Roswell deposit the Resource was updated (see ASX Announcement 4 November 2020). The Global Mineral Resource (Indicated and Inferred) for the Roswell Deposit now stands at: 10.1 million tonnes grading 2.04g/t gold (660,000oz).
  • Total contained ounces increased 50% from the previously announced January 2020 Inferred Mineral Resource.
  • The 30,000 metre follow up drill program at Boda continues. Results received (see ASX Announcements 11 November and 18 December 2020) show a subvertical elliptical zone of significant gold-copper mineralisation, indicative of a large alkalic porphyry system of 400 metres width that is over 1,000 metres of north-south strike length, and more than 1100 metres vertically.
  • One diamond core hole, KSDD028, was designed to test the interpreted northwest structural trend and to intersect the Boda high grade breccia identified by KSDD007, to further define its orientation and grade. This hole successfully intersected Au – Cu porphyry mineralisation, with high grades centred on a sulphide cemented breccia. Significant assay results included:
KSDD028832m grading 0.38g/t Au, 0.17% Cu from 256m
incl266m grading 0.66g/t Au, 0.36% Cu from 764m
incl65m grading 1.98g/t Au, 1.13% Cu from 799m
incl25m grading 4.43g/t Au, 2.59% Cu from 838m
  • The extension of mineralisation to the south is driven by assay results received from a diamond core drill hole 500 metres south of the original Boda gold-copper intersections. This hole was designed to test the Boda Two conductive anomaly identified by 3D-IP electrical geophysics. The hole intersected significant gold mineralisation indicative of a large pyrite shell to another porphyry system:
KSDD022102m grading 0.22g/t Au, 0.02% Cu from 685m
and292m grading 0.64g/t Au, 0.02% Cu from 867m
incl24m grading 1.81g/t Au, 0.03% Cu from 1108m
  • A second diamond rig has been mobilised to the Boda drilling program.

Corporate

  • Cash, bullion and listed investments position totalled A$82.3M.
  • During the quarter Alkane executed facility documentation with Macquarie Bank Limited to provide a A$20,000,000 working capital facility (“Facility”) (see ASX Announcement 17 December 2020). The Facility will further strengthen Alkane’s balance sheet and operating liquidity. All conditions precedent to drawdown have been satisfied and the facility is available for drawdown.
  • Shareholding of ASX listed gold developer Calidus Resources Ltd (ASX:CAI) reduced to ~10.5% at end of December quarter as a result of dilution from a capital raising by Calidus.
  • Shareholding of ASX listed gold developer Genesis Minerals Ltd (ASX:GMD) was ~19.9% at end of December quarter.