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Alkane Resources drill results may extend open pit to underground

Any extension to Tomingley's mine life will add significant value to the gold operations.
resource model and cross section of Wyoming One deposit
The company finished the September quarter with $53.3 million in cash and gold

Alkane Resources (ASX:ALK) has received drill assays from the Wyoming One open-pit, which is within the Tomingley Gold Operations (TGO) located in New South Wales.

Significantly, drilling has proved continuity and extension to the mineralisation below the existing open cut operation, which supports the notion of a future underground mining operation.

Results include 47.15 metres at 3.12 g/t gold from 249 metres depth and 44.0 metres at 2.19 g/t gold from 306 metres depth.

These current results demonstrate gold mineralisation systems to points 300 metres below the planned base of the open pit. 

The data will be incorporated into the resource model to form a basis for the underground mining study to be completed later this year.

Drill result details

15 diamond core drill holes have been completed totalling 6,993 metres of a 23 hole program.

The program is designed to confirm continuity within the ore zones previously identified, adding to the drilling completed late 2016.

Results include:

- 16.7 metres at 2.52 g/t gold from 178.3 metres;
- 47.15 metres at 3.12 g/t gold from 249 metres including 15.0 metres at 5.71 g/t gold;
- 12.0 metres at 3.69 g/t gold from 189 metres including 5.3 metres at 5.63 g/t gold;
- 44.0 metres at 2.19 g/t gold from 306 metres including 18.25 metres at 3.56 g/t gold; and
- 12.4 metres at 3.40 g/t gold from 378.6 metres including 7.25 metres at 5.01 g/t gold.

Strong gold production during September quarter

The Tomingley Gold Operations (TGO) is based on four gold deposits - Wyoming One, Wyoming Three, Caloma and Caloma Two located 50 kilometres southwest of Dubbo in New South Wales.

Alkane beat its production guidance for FY17 at TGO delivering 68,836 ounces of gold with A$117.3 million revenue at an all-in sustaining cash cost (AISC) of A$1,335 per ounce.

During the recent September quarter, the TGO performed strongly producing 24,122 ounces at an AISC of A$982 per ounce.
 
Notably, site operating cash flow after development costs for the quarter was A$14.0 million.

Guidance for FY18 remains at 65,000 to 70,000 ounces of gold at an AISC of A$1,100-1,200 per ounce.

As at June 30, 2017, the total Mineral Resource was 9.23 million tonnes grading 1.7 g/t gold for 508,000 ounces and the total Ore Reserve was 2.68 million tonnes grading 1.9 g/t gold for 166,000 ounces.

READ NOW: Alkane Resources doubles Proved Ore Reserves of Dubbo Project

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