DESPITE the uncertainties caused by COVID, gold appears to have recovered swiftly on the markets, exceeding the $2500/oz mark in mid-June.

The bullish outlook is certainly encouraging news for gold miners, none more so than Alkane Resources, a gold production company with a multi?commodity exploration and development portfolio.

Alkane’s projects are predominantly in the Central West Region of NSW, but extend throughout Australia through investments in other gold exploration and mining companies.

Alkane’s gold production is from the Tomingley Gold Operations (TGO), which has been operating since early 2014, and its most advanced gold exploration projects are in the fully Alkane-owned tenement area between TGO and Peak Hill, which have the potential for sourcing additional ore for TGO.

Alkane has other wholly-owned exploration tenements in the Central West NSW prospective for gold and copper, with the recently announced significant porphyry gold-copper mineralisation intersected at Boda an example of this potential.

Alkane’s largest non?gold project is the Dubbo Project (DP), a large in-ground resource of zirconium, hafnium, niobium, yttrium and rare earth elements.

As it is an advanced polymetallic project outside China, it is a potential strategic and independent supply of critical minerals for a range of sustainable technologies and future industries.

The DP is development ready, subject to financing, with the mineral deposit and surrounding land acquired and all major State and Federal approvals in place.

Golden ticket

In a strong market for Australian gold, Alkane has a focus on gold production, exploration and partnerships, driven by a commitment to create value shareholders, while waiting for market conditions that will support progress of the DP.

The gold strategy is soundly based on existing gold assets, established projects, promising prospects, and demonstrated experience in gold exploration and production.

  • Underground mining at Tomingley Gold Operations (TGO)

Alkane is exploring prospects with confirmed high-grade mineralisation in the Tomingley region.

The goal is to define additional ore resources, either at surface or underground, for processing at TGO.

  • Re-evaluation of the Peak Hill deposit

Alkane operated the Peak Hill Gold Mine, located 15km south of TGO, as an open pit from 1996 to 2005.

Re-evaluation of the Peak Hill deposit suggests that underground mining may be feasible for accessing defined ore resources as another source of ore for the TGO processing plant.

Mining at Tomingley is based on four gold deposits (Wyoming One, Wyoming Three, Caloma and Caloma Two). The NSW Government Resources Regulator has granted approval for Alkane Resources to develop an exploration drive from its existing Wyoming One underground operations, to the Roswell and San Antonio deposits, about 4km to the south of the mine.

This is an important milestone towards a future potential underground mine at Roswell and San Antonio that could be developed independently of an open cut operation.

The exploration drive will be sized such that it could also accommodate production in the future.

Alkane Managing Director Nic Earner said the company has the equipment purchased, personnel recruited and land acquired to allow this development to proceed.

“We will now incorporate the timing of the drive development into the Tomingley Gold Operations’ budget schedules, as well as our regional exploration plans,” he said.

“Given the prospectivity of the region around our existing operations, this approval provides Alkane with all the exploration and, in time, production options, to extend the life of mine at Tomingley well into the future.”

The company is seeking investments in junior gold mining companies and high-potential projects, where Alkane can contribute additional capital, expertise and operating capability, for mutual benefit.

In the first instance, in October 2018, Alkane invested in gold exploration company Calidus Resources Limited (ASX:CAI), due to its excellent prospects in WA and its highly feasible development path.

Boda has genuine potential to be a large, tier-one gold-copper porphyry project.

Boda project

A major RC and diamond core drilling program is planned to begin in early Q3 2020 to further test the high-grade core and larger resource potential at Boda, as well as other regional targets defined by both the 3D-IP survey and existing Alkane data.

The Boda prospect is part of the Northern Molong Porphyry project, which incorporates exploration licences covering a 115sqkm area of the northern Molong Volcanic Belt.

Modelling of recent exploration, including drill hole KSDD009, indicated a +0.2g/t AuEq sub-vertical zone of significant gold-copper mineralisation, about 500m north-south strike length, 400m wide and >1100m vertically.

Within this envelope is a +3.0g/t AuEq high-grade pod about 150m long, 100m wide and >500m vertically.  Both zones remain open along strike and at depth.

Assay results at the site included:

  • 40m grading 0.28g/t gold, 0.18% copper from 94m
  • 2m grading 0.15g/t gold, 0.15% copper from 237.8m
  • 28m grading 0.30g/t gold, 0.13% copper from 418m
  • 17m grading 0.24g/t gold, 0.16% copper from 473m
  • 2m grading 1.14g/t gold, 0.18% copper from 677m
  • 152m grading 0.18g/t gold, 0.12% copper from 692m

Mr Earner said the results further demonstrated the prospectivity of the Northern Molong Porphyry Project and the world-class nature of the Boda discovery.

“From what we have seen of the mineralisation to date, we believe Boda has genuine potential to be a large, tier-one gold-copper porphyry project,” he said.

“We’ve initiated a substantial program to both increase the drilling density at Boda and adding to our knowledge of regional targets, including testing the Boda South and Kaiser prospects and Boda’s high-grade core.”

Dubbo Project

The world-class Dubbo Project stands to become a strategic and significant producer of zirconium, hafnium, niobium and rare earths for advanced technologies.

Alkane subsidiary Australian Strategic Materials (ASM), which owns the project, is monitoring market demand for these critical materials and will seek further investment for the project when the market conditions are right.

Construction of the commercial-scale pilot plant as part of the investment in clean metal processing technology with Ziron Tech of South Korea is continuing.

Consultation with regulators regarding the demerger and listing of ASM, together with the key transaction documents, is substantially completed.

Alkane Chairman Ian Gandel said the turbulence in global equity markets in March and April had abated to the extent that the Alkane board has decided the time is right to make the final preparations to demerge and list ASM in the coming months, subject to shareholder approval.

“Since joining in February, ASM managing director David Woodall and the ASM team have focused on distilling the key value drivers for ASM and the Dubbo Project, and have brought new focus, momentum and opportunity to the team which is working hard to realise catalysts for the Dubbo Project and the Clean Metals metallisation technology in South Korea,” he said.

“The demerger of ASM will provide investors two opportunities to grow value; in Alkane as a growing gold exploration, development and production company, and in ASM as an exciting critical materials business leveraged to the changing world economy.”

ASM is currently anticipated to list in mid-July.

At the completion of the demerger, if approved, shareholders of Alkane will have the same proportional ownership in both Alkane and ASM, with the exception of Ineligible Foreign Shareholders.

Under the demerger, the Alkane and ASM entities will be separated, and no cross-holdings between companies will exist.

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