Alkane Resources (ASX:ALK) has produced record gold production during the June quarter of 27,924 ounces at an all-in sustaining cash cost (AISC) of A$906 per ounce.
This brings total FY2017 production from the Tomingley Gold Operations in New South Wales to 68,836 ounces with an AISC of A$1,335 per ounce.
FY2017 production comes in slightly ahead of recent guidance of 65,000-67,000 ounces at an AISC of A$1,300-$1,400.
The result was largely driven by a strong second half of production totalling 46,645 ounces with an AISC of A$1,038 per ounce.
Site operating cash flow after development costs for the quarter was A$30.7million and the company’s total cash position increased A$44.9 million.
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.
Highlights from the June quarter include:
- Gold production was above forecast at 27,924 ounces and well above the previous quarter of 18,721 ounces;
- Site operating cash costs reduced to A$702 per ounce with AISC of A$905/ounce;
- Gold sales 31,107 ounces for revenue of A$52.6 million at an average price of A$1,690 per ounce; and
- Gold forward contracts at 30 June 2017 of 17,500 ounces at average price of A$1,716 per ounce.
The higher than expected quarterly production was due to excellent operational performance and continued releases of high grade ore which is over reconciling for the Caloma Two pit.
Extension drilling continues
The drilling program targeting strike extensions and in-fill areas with the aim of lifting the gold ounces per vertical metre in any future designs continues with completion expected in October.
At this time the geological models will be updated and a mine plan evaluated for development.
46 holes completed in regional drilling
The regional air core drilling program continued within the greater Tomingley Gold Project and 46 holes totalling 3,582 metres have been completed to date.
Drilling has been testing an initial area from the southern boundary of TGO mine site to the Cemetery target.
Results will be reported as they become available.
Two diamond drill holes, spaced 500 metres apart, totalling 791 metres have been completed to provide detailed geological and structural data of the mineralisation.
Rising prices drawing attention to Dubbo Project
The Dubbo Project remains construction ready, with the mineral deposit and surrounding land wholly owned; all State and Federal approvals in place; an established flow sheet and a solid business case.
Upward price movements in the zirconium chemicals and powders, and rare earth magnet markets are signalling renewed confidence in the sectors, with further increases anticipated during 2017.
The modularised build is being optimised and costed by Outotec to further support the bankability of the project, and assist with flexible financing options for construction.