Alkane Resources Limited (ASX:ALK) (OTCMKTS:ALKEF) (FRA:AK7) has set the stage for a strong year following a big December quarter of gold production, sales and exploration.
The highlight of the company’s quarterly activities report was $38.2 million in gold sales, all from its Tomingley Gold Operations (TGO) 50 kilometres southwest of Dubbo in Central West New South Wales.
TGO produced 15,919 ounces of gold for the quarter, which was above earlier forecasts, and it sold 16,613 ounces at an average price of $2,302 an ounce.
As a result of these impressive numbers, Alkane has boosted its guidance for the 2021 financial year to between 47,000 and 52,000 ounces at an all-in sustaining cost of $1,450 to $1,600 per ounce.
Sky’s the limit at TGO
Alkane believes there is further potential to be developed at Tomingley and is planning to develop the Roswell and San Antonio gold deposits to the south of TGO “as soon as possible”.
The company is currently consulting with regulators, landholders and other stakeholders, as well as conducting on-ground assessments required for the Environmental Impact Statement.
It said feasibility plans to include open cut and underground mines at Roswell and San Antonio were expected to be finalised this quarter once an indicated resource estimate at San Antonio is completed.
As previously reported by Proactive Investors, Alkane has lifted its Roswell gold resource estimate by 50 per cent to 660,000 ounces.
A detailed snapshot of drilling results in the December quarter can be found here.
Books looking healthy
Alkane’s foundations are solid ahead of the 2021 calendar year, with its cash, gold bullion and listed investments totalling $82.3 million.
That does not include a $20 million working capital facility that the company executed with Macquarie Bank during the quarter.
It holds forward sale contracts for gold totalling 14,250 ounces at an average forward price of $2,239 per ounce.
Alkane's market cap sits at approximately A$488.2 million and during the past 12 months, shares have traded in the range of A$0.585 to A$1.54. Today shares have as much a 12.89% higher to A$0.885.
- Daniel Paproth