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Alkane Resources upgrades gold production guidance

The company produces gold from the Tomingley Gold Operations in New South Wales.

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The company has increased its gold production guidance and lowered costs

Alkane Resources (ASX:ALK) has upgraded its expected gold production for FY2017 thanks to strong operating performance across the months of April and May.

Gold production of over 17,000 ounces during April and May has increased guidance for the June half up to 43,000-45,000 ounces at an all-in sustaining cost (AISC) of A$1,000-$1,100 per ounce.

This is up from the guidance provided in January of 31,000-36,000 ounces gold at an AISC of A$1,350-$1,550.

Site cash costs (C1) for the current June quarter are anticipated to be in the range of A$750-$850 per ounce.

Full year guidance for FY17 has been revised up to production of 65,000-67,000 ounces at an AISC of A$1,300-$1,400.

FY18 is expected to deliver 65,000-70,000 ounces at an AISC of A$1,100-$1,200.


Operations update

The Tomingley Gold Operations located in New South Wales continued at high production levels in the current quarter, above forecast.

This was due to the release of higher grade ore, particularly from the Caloma and Caloma Two pits, and generally clear weather following a difficult December half caused by persistent heavy rain events.

Mining is also occurring in the Wyoming One pit, although this is predominantly waste stripping.

Core drilling below the Wyoming One open pit and regional aircore and core drilling south of the Tomingley mine site are continuing.

Further results will be released over the next several months as the programs proceed.


Tomingley Gold Operations (TGO)

The 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.

During the March quarter, TGO recorded 59% higher production levels compared to the prior quarter, as was expected.

This was due to higher grade ore being released, particularly in Caloma and Caloma Two, and clearer weather generally.

Gold poured for the March quarter was 18,721 ounces, with sales of 16,303 ounces at an average sales price of A$1,694 per ounce generating revenue of A$27.6 million.

Bullion on hand at the end of the March quarter increased by 2,414 ounces to 4,986 ounces, with a fair value at quarter end of A$8.2 million.

Quick facts: Alkane Resources Ltd

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ASX:ALK
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Market Cap: $574.23 m
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