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Alkane Resources posts half-yearly revenues of $52 million as Tomingley gold production moves underground

The company has cash, bullion and investments of $80.5 million with no corporate debt.
Alkane Resources posts half-yearly revenues of $52 million as Tomingley gold production moves underground
The Tomingley Gold Project is about 50 kilometres southwest of Dubbo in NSW

Alkane Resources Limited (ASX:ALK) has delivered gold sales revenue of $52.4 million and a gross profit of $17.5 million in the half year ending December 31, 2018.

Gold production amounted to 26,745 ounces and gold sales were 30,497 ounces, achieving an average sales price of $1,717 an ounce.

The company is transitioning its Tomingley Gold Operation to underground mining after open pit mining finished early in January, after 5 years of production.

Development has begun on schedule with both the main decline and vent portals established and first underground ore targeted for the second half of calendar year 2019.

READ: Alkane Resources’ Tomingley gold paves way for Dubbo rare earths story

Alkane managing director Nic Earner said this was another great half driven by the team at the Tomingley Gold Operation.

Earner said: “Alkane’s strong balance sheet positions us well to execute our growth plans into 2019.

“With our development underground, our encouraging exploration, our development-ready Dubbo Project and our strategic investments, we look forward to the rest of this year.”

Tomingley's main decline (left) and the portal in the Wyoming One pit


READ: Alkane Resources begins underground mining at Tomingley Gold Project in NSW

Production guidance for the financial year ending in June 2019 is 35,000-40,000 ounces at an all-in sustaining cost of $1,050-$1,150 an ounce.

The all-in sustaining cost achieved in the recent half was $1,005 an ounce, compared to $1,013 an ounce in the previous corresponding period.

READ: Alkane Resources continues drilling at Tomingley to define additional gold resources

Alkane is pursuing an extensive exploration program focused on the area immediately south of the Tomingley mine with the objective of sourcing additional ore feed, either at surface or underground.

The exploration target area has a cumulative strike length of 2,500 metres comprising the Roswell, San Antonia and El Paso prospects.

Core drilling is also underway at the Peak Hill Gold Mine where an upgraded resource of 108,000 ounces was released last October.


READ: Alkane Resources lifts stake in gold explorer Calidus Resources to 10.19%

During the half, Alkane also made a strategic investment into ASX-listed gold developer Calidus Resources Ltd (ASX:CAI) and now holds about 10.2% in Calidus.

Calidus is developing the Warrawoona Gold Project in Western Australia’s Pilbara region where it has a gold resource at the Klondyke deposit of 654,000 ounces.

READ: Alkane Resources confirms unanimous support from Explaurum board for its $8 million investment

The company’s Dubbo Project in New South Wales remains construction ready with the deposit and surrounding land wholly-owned, government approvals in place and flowsheet and business case established.

Alkane subsidiary Australian Strategic Materials (ASM) is working towards securing finance for the Dubbo Project, with a focus on offtake contracts for its products and a resulting strategic investor for the project.

The company believes increased regulatory pressure in China will cause further price movement within the market, potentially creating a catalyst for offtake contracts.

Dubbo has a large in-ground resource of zirconium, hafnium, niobium, yttrium and rare earth elements.

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

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