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Alkane Resources discovers more gold at Tomingley after record production quarter

The El Paso prospect has the potential to host Tomingley-style gold deposits

drilling
Drilling at Tomingley

Alkane Resources Ltd (ASX:ALK) has discovered more gold at the El Paso prospect, which is located south of the gold producing Tomingley mine site in New South Wales.

Highlights include: 11 metres at 2.82g/t gold from 32 metres; with higher grade intersections such as 2 metres at 12.39g/t gold from 32 metres.

Mineralisation at El Paso was identified over a strike length of 1,200 metres, and remains open to the north.

READ: Alkane Resources upgrades gold production guidance

Alkane's broad spaced drilling programme has confirmed the area has potential to host Tomingley style gold deposits, and similar tenor results led to the Tomingley discovery and current mining operation.

Record gold production

Alkane delivered 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 brought the total FY2017 production from the Tomingley Gold Operations 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.

Rising prices drawing attention to Dubbo Project

Moving to Alkane's Dubbo Project which remains construction ready, all State and Federal approvals are in place, with 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.

Quick facts: Alkane Resources Ltd

Price: 1.04 AUD

ASX:ALK
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Market Cap: $603.23 m
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