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Alkane Resources: Gandel Metals subscribes for A$4.9m entitlement offer shortfall

Wed, 04 Apr 2012 01:26:00 +0100

Alkane Resources (ASX: ALK) will place a shortfall of about 4.5 million shares from its recent A$30 million 1 for 10 non-renounceable entitlement offer with Gandel Metals.

The company offered around 26.9 million shares at $1.10 per share to raise about $30 million, of which $12.2 million was underwritten by Regal Funds Management.

Regal appointed Gandel Metals as trustee for the Gandel Metals Trust, an investment company associated with Alkane director Ian Gandel, to sub-underwrite its obligations.

The entitlement offer forms part of a broader $107 million capital raising to fund the construction and commissioning of the Tomingley Gold Project and the continuing development of the Dubbo Zirconia Project.

Alkane is also undertaking two placements to professional and sophisticated investors to raise $44 million through the issue of 40.3 million shares at $1.10 each, and $33 million through the issue of 30 million shares at $1.10 each.

Importantly, Alkane has full investor backing through firm commitments for the total $77 million in placements which were substantially oversubscribed.

Over the next two years, Alkane is planning to develop two significant resource projects in central west New South Wales which will have a combined capital expenditure of about $1 billion.

The company could be in production at Tomingley by as early as mid-next year once it begins the 12 month construction phase.

A Definitive Feasibility Study for the project delivered production of 50,000 to 60,000 ounces of gold a year for an initial 7.5 years, and based on a gold price of A$1,700 per ounce the project should generate cash flow (EBITDA) of around A$250 million with an internal rate of return of 32%.

Meanwhile, at the Dubbo Project, Alkane is in the process of completing a revised 1 million tonne per annum project financial assessment.

An earlier Feasibility Study estimated earnings before interest taxes, depreciation and amortisation of $6 billion and a net present value of $1.2 billion.

Late last year Alkane delivered an ore reserve upgrade to the project that will support a 36 year mine life from a proposed 1 million tonnes per annum production parameter.

The project is already positioned to be a long term supplier of zirconium and heavy rare earth products when it begins production in 2014.

Alkane Resources increases Tomingley resource by 24% to 811,700 ounces gold

Thu, 29 Mar 2012 01:17:00 +0100

Alkane Resources (ASX: ALK) has increased the total gold resource at the Tomingley Gold Project in New South Wales to 811,700 ounces following a successful drilling campaign at the Caloma deposit.

The company has now defined a JORC Resource at Caloma of 5.45 million tonnes at 2.1 grams per tonne (g/t) gold for 811,700 ounces of gold, from the previous resource of 3.68 million tonnes at 1.8g/t for 218,300 ounces of gold.

This has lifted the overall resource at Tomingley to 12.59 million tonnes at 2g/t gold.

Caloma is expected to be one of three open cut operations within the Tomingley project, in addition to the Wyoming One and Wyoming Three gold deposits.

A new mine plan will be developed for Caloma, incorporating the upadated resource, and could see the mine life extended.

The updated resource was compiled by Richard Lewis of Lewis Mineral Resource Conuslting, who completed the original resource assessment for the Caloma deposit.

Capital raising

Earlier this month Alkane Resources announced a A$107 million partially underwritten capital raising that would support the construction and commissioning of the Tomingley Gold Project.

Alkane is targeting production at Tomingley in the first half of 2013, depending on the receipt of approvals.

A Definitive Feasibility Study for the project delivered production of 50,000 to 60,000 ounces of gold a year for an initial 7.5 years, and based on a gold price of A$1,700 per ounce the project should generate cash flow (EBITDA) of around A$250 million with an internal rate of return of 32%.

Funds from the raising will also go towards continued development of the Dubbo Zirconia Project.

Over the next two years, Alkane is planning to develop two significant resource projects in central west New South Wales which will have a combined capital expenditure of about $1 billion.

Development approvals pending

Alkane is awaiting development approval from the New South Wales Department of Planning and Infrastructure.

The response to submissions on the Environmental Assessment following public exhibition has been returned to the department.

In the meantime, Alkane is continuing to advance long lead time options such as the ball mill, production water supply, tendering for civil works and detailed design.

Alkane Resources to net up to A$107m to advance Tomingley towards gold production by mid 2013

Thu, 01 Mar 2012 03:39:00 +0000

Alkane Resources (ASX: ALK) will raise A$107 million in new capital for the construction and commissioning of the Tomingley Gold Project and the continuing development of the Dubbo Zirconia Project.

Over the next two years, Alkane is planning to develop two significant resource projects in central west New South Wales which will have a combined capital expenditure of about $1 billion.

The company could be in production at Tomingley by as early as mid-next year once it begins the 12 month construction phase.

A Definitive Feasibility Study for the project delivered production of 50,000 to 60,000 ounces of gold a year for an initial 7.5 years, and based on a gold price of A$1,700 per ounce the project should generate cash flow (EBITDA) of around A$250 million with an internal rate of return of 32%.

Meanwhile, at the Dubbo Project, Alkane is in the process of completing a revised 1 million tonne per annum project financial assessment.

An earlier Feasibility Study estimated earnings before interest taxes, depreciation and amortisation of $6 billion and a net present value of $1.2 billion.

Late last year Alkane delivered an ore reserve upgrade to the project that will support a 36 year mine life from a proposed 1 million tonnes per annum production parameter.

The project is already positioned to be a long term supplier of zirconium and heavy rare earth products when it begins production in 2014.

Dubbo is one of the world’s largest known in-ground resources of the metals zirconium, hafnium, niobium, tantalum, yttrium, and rare earth elements.

The Proved and Probable Ore Reserves at the Toongi deposit are now 35.9 million tonnes at 1.93% zirconium, 0.04% hafnium, 0.46% niobium, 0.03% tantalum, 0.14% yttrium, 0.74% rare earth oxides (0.9% total rare earth oxides).

Alkane will raise the $107 million through an entitlement offer and placements.

The company is offering up to $30 million through a partially underwritten 1 for 10 non-renounceable entitlement offer at $1.10 per new share.

A shortfall of up to $12.2 million is underwritten by Regal Funds Management.

Under the placements, Alkane will raise $44 million through the issue of 40.3 million shares at $1.10 each, and $33 million through the issue of 30 million shares at $1.10 each to professional and sophisticated investors.

The issue price represents a discount of about 8% to the volume weighted average price of Alkane shares for the 20 trading days since 31 January 2012.

Importantly, Alkane has full investor backing through firm commitments for the total $77 million in placements which were substantially oversubscribed.

Alkane Resources to announce capital raising, shares in pre open

Tue, 28 Feb 2012 01:19:00 +0000

Alkane Resources (ASX: ALK) has gone into a voluntary trading halt ahead of the announcement of a capital raising.

The company has given no indication of where funds raised will be allocated, however the company has been moving towards development at the Tomingley Gold Project in New South Wales.

Alkane has previously said it could start the 12 month construction phase at Tomingley in 2012, leading to the start of production before mid-2013.

A Definitive Feasibility Study indicates production of between 50,000 and 60,000 ounces of gold per annum over the first seven and a half years.

Alkane shares will remain in pre-open until the earlier of an announcement being made or the commencement of trading on Thursday March 1, 2012.

Alkane Resources may have unlocked potential new porphyry copper, gold complex at Bodangora

Wed, 01 Feb 2012 01:19:00 +0000

Alkane Resources (ASX: ALK) has confirmed the copper-gold potential of the Glen Hollow Prospect at its Bodangora Project in New South Wales, with reconnaissance core drilling offering further encouragement the project may host a new porphyry copper-gold complex.

Highlight intersections include 7.8 metres at 1.04% copper and 0.23 grams per tonne (g/t) gold from 368.2 metres, including 0.6 metres at 10.5% copper and 2.45g/t gold from 370.2 metres, and 60.1 metres at 0.1% copper and 0.15g/t gold from 81.4 metres, including 15.9 metres at 0.16% copper and 0.33g/t gold from 81.4 metres.

Exploration to date, and in particular drilling, has tested a very small portion of what is seen as a very prospective intrusive complex covering 12 square kilometres.

Defining the potential for a new porphyry copper-gold complex at Bodangora is that several key geological features associated with these types of systems have been confirmed including:

- Visible, multi-phase, multi-styled copper-gold mineralisation;
- Large multi-phase intrusive complex with shonshonitic affinities;
- Extensive potassic alteration of the intrusive complex; and
- Late stage mineralised syenite dykes.

Another defining factor of the project’s potential is that detailed mapping of the Comobella area shows several magmatic and petrographical similarities to areas of porphyry copper-gold systems elsewhere in the Molong Volcanic Belt, such as Newcrest Mining’s (ASX: NCM) large deposits at Cadia-Ridgeway.

Subsequent soil geochemistry and induced polarisation surveys identified a number of prospective areas which were evaluated by broadly spaced reverse circulation drilling in early 2011.

The best results were returned from the Glen Hollow prospect with intersections of 46 metres at 0.9g/t gold and 0.25% copper from 60 metres, including 18 metres at 1.7g/t gold and 0.45% copper from 85 metres.

The geochemical database for the samples will be analysed in detail to identify any alteration vectors present.

A program of reverse circulation drilling is set to begin later in the March quarter with these holes sited to assist in further clarifying the key geological aspects of the system.

Alkane also plans to undertake an extensive series of petrological studies and sulphide mineral analyses to assess geochemical vectors for porphyry mineralisation.

Alkane Resources takes another step towards Tomingley Gold Project development

Fri, 18 Nov 2011 03:41:00 +0000

Alkane Resources (ASX: ALK) is continuing to progress the Tomingley Gold Project in New South Wales, with copies of the environmental assessment having now been distributed to the relevant government agencies, exhibition centres and specialist consultants for public exhibition.

The exhibition period will run from 17 November to 19 December 2011.

Alkane said that a successful outcome to the development approval process could see the company start construction in 2012, with this leading to commencement of production before mid-2013.

The construction phase is 12 months and will create 100 jobs, with ongoing operations creating 90 full time jobs, most of which would be sourced in the local region.

A Definitive Feasibility Study for the project delivered production of 50,000 to 60,000 ounces of gold a year for an initial 7.5 years, and based on a gold price of A$1,700 per ounce the project should generate cash flow (EBITDA) of around A$250 million with an internal rate of return (IRR) of 32%.

The New South Wales government has agreed to provide financial assistance for a proportion of water and infrastructure costs for the project.

Tomingley Gold Project - a plus 660,000 gold ounce resource

Tomingley already hosts a plus 660,000 gold ounce resource across three deposits, Caloma, Wyoming One and Wyoming Three, with the project having the potential for a minimum seven year mine life, with a target of over ten years.

The plan is for an open pit for the first seven years, to be followed by an underground operation.

Importantly for the project is the access to infrastructure, which includes water, power from the state grid and roads providing both primary and secondary access.

Another plus is the skilled local workforce, which includes a population base of 150,000 within 120 kilometres which can be tapped, and therefore saving costs as no fly-in-fly-out staff or accommodation will be required.

The capital costs for Tomingley is around A$90 million, which comprise a CIL plant (A$43 million), infrastructure (A$22.6 million) and owners costs of A$23 million.

Alkane is currently awaiting development consent, with Credit Suisse already granting mandate to provide up to a A$45 million debt facility with a gold hedging program to return average A$1,500 per ounce.

Alkane Resources upgrades zirconium and heavy rare earth Reserves at Dubbo Zirconia Project

Wed, 16 Nov 2011 00:43:00 +0000

Alkane Resources (ASX: ALK) has delivered an ore reserve upgrade to the Dubbo Zirconia Project in New South Wales that will support a 36 year mine life at from a proposed 1 million tonnes per annum production parameter.

The project is already positioned to be a long term supplier of zirconium and heavy rare earth products when it begins production in 2014, which is one of the world’s largest known in-ground resources of the metals zirconium, hafnium, niobium, tantalum, yttrium, and rare earth elements.

The Proved and Probable Ore Reserves at the Toongi deposit are now 35.9 million tonnes at 1.93% zirconium, 0.04% hafnium, 0.46% niobium, 0.03% tantalum, 0.14% yttrium, 0.74% rare earth oxides (0.9% total rare earth oxides).

Where the story gets really interesting for Alkane is that the reserves will support an initial 36 year open pit life at 1 million tonnes per annum production.

This will provide a major boost over an earlier Feasibility Study which is based on a 20 year cash flow to indicate a $1.2 billion NPV.

The economics therefore will be even higher, with the highly anticipated revised financial assessment on schedule for delivery to the market in early 2012.

New drilling targeting resource expansion

Deep diamond core testing of Toongi deposit and reverse circulation drilling of the nearby and previously untested Railway deposit have been scheduled to commence in early 2012, which provide the potential to significantly expand the resource potential of the project.

Negotiations for heavy rare earth concentrate underway

Negotiations are continuing with a number of parties expressing interest in signing agreements with Alkane for the heavy rare earth concentrate and the light rare earth concentrate.

All of the zirconium and niobium products have now been committed through agreements which account for 61% of the revenue for the 1 million tonne annual operation.

Demonstration Pilot Plant

The Demonstration Pilot Plant has been operating at the laboratory facilities of ANSTO Minerals at Lucas Heights south of Sydney since May 2008 and to date has recovered substantial quantities of zirconium products and niobium concentrate.

The plant has continued to operate for short periods to trial engineering and process innovations, and has also demonstrated recovery of an yttrium rich heavy rare earth concentrate and a light rare earth concentrate.

In September this year the project demonstrated robust financial returns. While resources identified to date will permit the project to produce for over 100 years, the Feasibility Study estimated an EBITDA of A$6 billion and an NPV of A$1.2 billion based on an initial 20 year mine life.

Recoveries

Based upon the 1 million tonne per annum project, the product outputs derived from demonstration plant mass balances, overall recovery from ore to finished products were estimated to be 82% for zirconium, 66% for niobium and an average of 45% for rare earth elements.

There remains significant potential to improve the rare earth circuit and overall recoveries of individual rare earths within the concentrates.

Recent test work has already demonstrated improved heavy rare earth recoveries, and this work will continue in parallel with the project development program in the first half of 2012.

Alkane Resources ferro-niobium JV to increase Dubbo Zirconia Project production to 1Mtpa

Wed, 26 Oct 2011 01:07:00 +0100

Alkane Resources (ASX: ALK) has the potential to produce 1 million tonnes per annum from the Dubbo Zirconia Project through a joint venture to produce and market ferro-niobium from the project.

The Memorandum of Understanding (MoU) with a European company is a major milestone for the development of Dubbo leading to production in 2014.

Alkane’s partner’s proprietary technology will be used to process niobium concentrate from Dubbo to produce more than 3,000 tonnes of ferro-niobium annually from the expanded 1 million tonnes per annum development scenario for Dubbo.

Based on current prices, 3,000 tonnes of ferro-niobium will generate revenue of US$95 million per annum, about 22% of total anticipated annual project revenue of US$432 million per annum.

Dubbo is also a significant source of zirconium and heavy rare earths, and negotiations are underway with a number of parties that are interested in signing MoUs for heavy and light rare earth concentrates.

Alkane’s European partner, which remains anonymous, operates globally developing and manufacturing ferro alloys for the steel industry, powders for the carbide industry and other special products for a variety of applications.

The Dubbo Project

The Dubbo Zirconia Project is based upon a world class resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements.

In September 2011, Dubbo delivered a bumper Definitive Feasibility Study, showing positive returns from a base case of 400,000 tonnes per annum production.

The expanded 1 million tonne per annum scenario provides significant upside to the base case model.

Alkane is undertaking detailed analysis to take the 1 million tonne per annum scenario to Feasibility Study standard, with completion expected in the March quarter of 2012.

The company said this additional work would not impact on the project timetable as it will proceed in parallel with the Environmental Assessment and Financing programs.

While resources identified to date will permit the project to produce for over 100 years, the feasibility study estimated earnings before interest, tax, depreciation and amortisation of A$6 billion and a net present value of A$1.2 billion.

Alkane Resources: Tomingley gold project receives development boost with NSW support

Tue, 18 Oct 2011 00:07:00 +0100

Alkane Resources (ASX: ALK) has received a major boost for the development of the Tomingley Gold Project, with the company signing an agreement with the state Government.

The Deed of Agreement is with the New South Wales Department of Trade and Investment, Regional Infrastructure and Services (DTIRIS), with Alkane to receive financial assistance towards infrastructure for the development of the Tomingley.

The assistance by the state Government forms part of its objective to promote economic development in regional New South Wales, with the assistance is for a proportion of the total water and infrastructure cost budgeted at $9.7 million, subject to formal development approval.

Funds will be used for two main areas. First of all this will include upgrading water supply infrastructure, comprising the drilling and equipping of a water bore and construction of a 45.9 kilometre water supply pipeline from the bore to the Tomingley site and the Tomingley town site.

The other major area will be an upgrade to electricity supply to the Tomingley site, comprising construction of a 66kV electricity transmission line from the Peak Hill Substation and transformer at the Tomingley Substation, along with construction of a 22kV electricity distribution line of 950 metres to the water bore.

Importantly, at the end of the mine life, the water pipeline and upgraded electricity supply will remain and will provide sustainable alternate development opportunities for the local community.

Tomingley Gold Project - a plus 660,000 gold ounce resource

Tomingley already hosts a plus 660,000 gold ounce resource across three deposits, Caloma, Wyoming One and Wyoming Three, with the project having the potential for a minimum seven year mine life, with a target of over ten years.

The plan is for an open pit for the first seven years, to be followed by an underground operation.

Importantly for the project is the access to infrastructure, which includes water, power from the state grid and roads providing both primary and secondary access.

Another plus is the skilled local workforce, which includes a population base of 150,000 within 120 kilometres which can be tapped, and therefore saving costs as no fly-in-fly-out staff or accommodation will be required.

The capital costs for Tomingley is around A$90 million, which comprise a CIL plant (A$43 million), infrastructure (A$22.6 million) and owners costs of A$23 million.

Alkane is currently awaiting development consent, with Credit Suisse already granting mandate to provide up to a A$45 million debt facility with a gold hedging program to return average A$1,500 per ounce.

Alkane Resources eyes resource upgrade at Tomingley after continued gold intercepts

Tue, 04 Oct 2011 07:26:00 +0100

Alkane Resources (ASX: ALK) already hosts a plus 660,000 gold ounce resource at the Tomingley Gold Project in New South Wales across three deposits, Caloma, Wyoming One and Wyoming Three.

The latest reverse circulation drilling at the Caloma deposit, designed to
improve the resource status and increase ore reserves, intersected significant gold mineralisation.

The high grade highlights included 6 metres at 16.69 grams per tonne (g/t) gold from 36 metres, which included 2 metres at 34.50g/t gold, and 3 metres at 14.66g/t gold from 146 metres.

Supporting the high grade hits were broader intersections, including 13 metres at 4.44g/t gold from 50 metres, 23 metres at 3.54g/t gold from 55 metres, and 17 metres at 3.05g/t gold from 51 metres.

Alkane is now incorporating the drilling data into the company's geological
model and revised resources and reserves will be estimated.

Potential ten year mine life at Tomingley

Tomingley has the potential for a minimum seven year mine life, with a target of over ten years.

The plan is for an open pit for the first seven years, to be followed by an underground operation.

Importantly for the project is the access to infrastructure, which includes water, power from the state grid and roads providing both primary and secondary access.

Another plus is the skilled local workforce, which includes a population base of 150,000 within 120 kilometres which can be tapped, and therefore saving costs as no fly-in-fly-out staff or accommodation will be required.

The capital costs for Tomingley is around A$90 million, which comprise a CIL plant (A$43 million), infrastructure (A$22.6 million) and owners costs of A$23 million.

Alkane is currently awaiting development consent, with Credit Suisse already granting mandate to provide up to a A$45 million debt facility with a gold hedging program to return average A$1,500 per ounce.

EPCM – Early Works Program

Also - an early works program as part of the EPCM has commenced to accelerate the construction timetable when the program receives development approval.

These include:

- Exercise of an option to acquire a 1,000ML Water Access Licence;
- Placement of an order for the ball mill;
- Letting of a contract for the water pipeline;
- Preparation of an order for the power transformers; and
- Issue of tender documents for the site civil works.

Alkane Resources: DFS results highlight substantial upside at Dubbo Zirconia Project

Mon, 19 Sep 2011 03:00:00 +0100

Alkane Resources (ASX: ALK) is a company on the move, powered by the Dubbo Zirconia Project (DZP), which is a strategic and alternate source of zirconium and heavy rare earth products with a resource capable of very long term supply.

The latest good news for the company is a bumper Definitive Feasibility Study (DFS), which has delivered very robust financial results.

First of all, DFS results for the DZP base case of 400,000 tonnes per annum have shown that the project delivers very positive returns.

Better still, the more likely development of the expanded 1,000,000 tonne per annum project provides a substantial upside to the base case model.

The numbers are very impressive, with a 20 year EBITDA estimated at A$6 billion, an after tax NPV of A$1.2 billion and pre-tax IRR of 30.2%.

Another plus is the project has received strong interest for all the product output at the expanded rate - and with three MOUs having been completed to date, with others in the pipeline, it appears the potential is just starting to be tapped.

Alkane added that preliminary discussions have been made with financial institutions and potential off-take partners, indicating several project funding options.

Alkane eyes 1,000,000 tonnes per year to Feasibility Study

The company added that while the accuracy of the estimations for the base case development is at accepted standards for a Definitive Study, the expanded concept employed typical ‘scaling’ factors for the capital cost.

While some operating costs are proportional to production, such as reagent consumption, others are unchanged by the scale, such as labour numbers.

The detailed analysis to take the 1,000,000 tonnes per year to Feasibility Study standard has already commenced and should be completed in the March quarter of 2012.

Alkane said this additional work will not impact on the project timetable as it will proceed in parallel with the Environmental Assessment and Financing programs.

DZP re-cap; reactivation of railway

The project is located about 30 kilometres by road south of the large regional centre of Dubbo which has a population of 42,000 and is serviced by sealed regional roads and the currently disused Dubbo to Molong railway.

At the expanded production rate, reactivation of the railway from Dubbo to the Toongi site is regarded as a priority.

The region has substantial existing infrastructure including state grid power supply, a natural gas pipeline, high quality water supply and light industrial services.

Importantly to help keep costs low, no camp facilities are required and most of the project workforce can be sourced locally, living in their own accommodation and commuting daily to the site.

Alkane Resources managing director Ian Chalmers appointed to Rare Earths Board

Fri, 19 Aug 2011 02:01:00 +0100

Alkane Resources (ASX: ALK) managing director Ian Chalmers has been appointed to the advisory board of Rare Earth Elements World (REE World), an organisation that comprises senior executives from the rare earths industry.

REE World is an international organisation based in Toronto, Canada, providing rare earth sector market information, news and commentary.

Its board members include senior executives from seven of the world's leading rare earths companies, including others from Australia, as well as industry experts and financial consultants.

As world interest in rare earths increases, Australia is increasingly in the spotlight because of its substantial stock of rare earths deposits.

On August 15 Alkane signed a third Memorandum of Understanding (MOU) with a leading European manufacturing and trading company to form a joint venture to market zirconium products from the Dubbo Zirconia Project (DZP) in Dubbo, New South Wales.

The signing of the MOU ticks another milestone for the company and development of the Dubbo Zirconia Project. Potential revenue from plant output is US$125m per annum. Zircon prices have rocketed recently with the market requiring the equivalent of one new DZP sized operation each year to meet demand.

Alkane Resources eyes additional resources after 4m at 38.93g/t gold at Tomingley

Wed, 17 Aug 2011 02:48:00 +0100

Alkane Resources (ASX: ALK) has intersected some high grade near surface gold at the Tomingley Gold Project, allowing the company to potentially boost the resource.

The highlights were from reverse circulation drilling at the Caloma Two deposit, and included 10 metres at 19.95 grams per tonne (g/t) gold from 92 metres, including 4 metres at 38.93g/t gold, and 5 metres at 9.07g/t gold from 51 metres.

This high grade hits are further supported by broader intersections, including:

- 15 metres at 4.13g/t gold from 48 metres;
- 14 metres at 2.40g/t gold from 214 metres; and
- 9 metres at 4.35g/t gold from 76 metres.

The outcome is gold mineralisation has now been defined within three structures in an 80 metre wide corridor over a 300 metre strike length, with further drilling to be undertaken by Alkane to further define the resource.

In other Alkane news at the project, the Caloma deposit drilling has kicked off to move resources to the high confidence category of Indicated from Inferred.

Tomingley is located in New South Wales, about 400 kilometres northwest of Sydney.

The project is based on three gold deposits strategically located 14 kilometres north of the company’s Peak Hill Gold Mine.

Tomingley has a resource of 660,000 gold ounces with a Definitive Feasibility Study at the project completed at the end of last year.

The conceptual development comprises an initial 1Mtpa open pit feed to a standard gravity/CIL gold recovery plant, producing 50,000 to 60,000 ounces per year for 7.5 years.

Alkane Resources snares third agreement to sell zirconium from Dubbo Project

Mon, 15 Aug 2011 01:28:00 +0100

Alkane Resources (ASX: ALK) has signed a third Memorandum of Understanding (MOU) with a leading European manufacturing and trading company to form a joint venture to market zirconium products from the Dubbo Zirconia Project (DZP) in Dubbo, New South Wales.

Significantly, this MOU will assure that subject to the feasibility study detail, the DZP will proceed directly to the 1 million tonne per annum development.

Although not disclosed, the European company is known to specialise in advanced ceramic materials and will service markets in Europe and North America.

The non binding agreement and participating interests of the parties are 80% Alkane and 20% the company.

The joint venture will undertake a marketing study to identify opportunities for zirconium output not yet committed from the expanded 1 million tonne per annum development scenario of the DZP.

This will ensure all product is assigned to key end users.

Alkane has received positive customer feedback for zirconium chemicals and zirconium dioxide powders supplied from the DZP demonstration pilot plant.

The new joint venture, in addition to the existing agreements to produce zirconium oxychloride (ZOC), has significantly expanded the sales and revenue potential for the Project.

Potential revenue from zirconium output at the 1Mtpa development is estimated to be US$125-150 million per annum (25-33% of total revenue), and total revenue from the Project is estimated to be around US400-450 million based upon conservative and long term sustainable commodity prices.

About Zircon and Zirconium Materials

The total downstream zirconium market worldwide is forecast by TZ Minerals International Pty Ltd (TZMI) to reach 163,000 tpa of zirconia (ZrO2) by 2012, which will require 250,000 tpa of zircon feed or approximately 18% of total zircon usage.

The zirconium market is the highest growth market for zircon at around 11% per annum and includes zirconium chemicals, chemical and fused zirconia and zirconium metal.

Put in perspective, at this growth rate, the zirconium market will require the equivalent one new DZP sized operation each year (1M tpa ore processed to produce 15,000 tpa zirconia) to meet demand.

Strong zircon demand, combined with a flat to falling supply outlook, has fuelled a dramatic increase in zircon prices. Contracted zircon prices from mineral sands companies are US$2,300-2,500/tonne in the third quarter.

While spot prices reached RMB 21,000 per tonne (US$3,200/t) or higher in China (17% VAT included) in early May. This resulted in ZOC prices increasing by over 285% in the past year to approximately US$4,000/t, FOB China for August deliveries.

As ZOC contains 36% zirconia, the current ZOC price equates to approximately US$11,100 per tonne of zirconia for August deliveries. Current Chinese chemical zirconia prices range from US$10,000 to 15,000/t.

Other DZP production

Alkane is continuing to work on several other MOUs dealing with the niobium concentrate and ferroniobium products; and the light rare earth concentrate and heavy rare earth concentrate.

The MOU on zirconium marketing brings closer the development commitment for the DZP with a Definitive Feasibility Study anticipated to be released at the end of August 2011 and production to commence possibly late in 2013 or early in 2014.

Alkane Resources JV unlocks cash flow potential of up to US$48m annually from Dubbo Zirconia Project

Tue, 26 Jul 2011 02:59:00 +0100

Alkane Resources (ASX: ALK) will joint venture with Australia’s Mintech Chemical Industries to produce zirconium oxychloride (ZOC) at the company's existing plant at East Rockingham, Western Australia.

The companies signed a Memorandum of Understanding to undertake a Scoping Study to produce 10,000 to 12,000 tonnes annually of ZOC.

This requires 25% of the zirconium output from the expanded 1 million tonnes per annum development scenario of the Dubbo Zirconia Project.

Most importantly is the cash flow generation, and based on current prices of ZOC, revenue of US$40 million to US$48 million annually will be generated, which Alkane said represents around 9% to 11% of the total revenue potential of the project.

Alkane added that revenue estimates for 75% of zirconium production now exceed earlier estimates for 100% production, with zirconium revenue representing around 25% to 30% of annual Dubbo Zirconia Project revenues.

Mintech has plant and equipment at the company's East Rockingham site which currently uses ZOC, and previously produced other zirconium chemicals and zirconium dioxide products.

Mintech has extensive chemical manufacturing expertise and a ready supply of low cost hydrochloric acid available nearby, which is a key reagent for producing ZOC.

Revenue potential for existing MOUs which relate to ZOC now totals around US$100 million to US$120 million per year, representing around 25% of total projected Dubbo Zirconia Project revenue.

The Scoping Study which Alkane is contributing $50,000, will include a study of the ZOC market both domestically and overseas, and is expected to be completed within three months.

Alkane Resources signs JV to start production at the Dubbo Zirconia Project

Mon, 16 May 2011 04:57:00 +0100

Alkane Resources (ASX: ALK) has now exited a trading halt after announcing a major milestone for the company's Dubbo Zirconia Project.

A Memorandum of Understanding (MoU) has been signed with a chemical company and a trading company to produce zirconium oxychloride (ZOC) from a new joint venture facility, using zirconium chemical intermediate feed from the Dubbo project.

The MOU follows extensive dialogue and testing of samples over several years, including visits by the companies to the Dubbo site and the demonstration pilot plant at ANSTO (Australian Nuclear Science and Technology Organisation) near Sydney.

A condition of the MoU is that the companies involved are kept confidential until a commercial development is finalised.

Alkane said the proposed ZOC joint venture with these companies will allow customers to become strategically independent of the zircon supply chain, and reduce reliance on China’s dominant ZOC supply position.

The facility will be developed to be able to produce 15,000 to 20,000 tonnes per annum ZOC, which will require all of the base case production zirconium output for the project of 400,000 tonne per annum of ore, or about 50% of the expanded 1 million tonne per annum development case.

The target customer base will be for the Japanese, European and North American markets, with ZOC mainly used as a high purity feed for production of other zirconium chemicals, zirconia and zirconium metal.

At current prices, the ZOC production is forecast to generate revenues of US$50 to US$70 million annually.

This would represent 12% to 17% of projected annual revenue on the 1 million tonne per annum case, with additional MOUs on other components of production currently under consideration.

The MOU on ZOC brings closer the development commitment to the DZP expected in mid-2011, with production likely later in 2013 or early 2014.

Alkane is also progressing MOUs dealing with additional zirconium chemical and zirconia production; the niobium concentrate and ferro-niobium products; and the light rare earth concentrate and heavy rare earth concentrate.

Alkane Resources in pre-open pending Dubbo Zirconia Project announcement

Mon, 16 May 2011 01:59:00 +0100

Alkane Resources (ASX: ALK) has been granted a trading halt by the ASX pending an announcement on the Dubbo Zirconia Project, with the company's shares placed in pre-open.

Alkane did not elaborate on what the announcement from the project would be about.

This year Alkane has been working on the completion of a Definitive Feasibility Study at the Dubbo Zirconia Project, which received a funding boost earlier in the year after a $21 million placement.

The project has a resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earths.

Alkane Resources extends gold copper 200 metres down-plunge at Wellington

Fri, 06 May 2011 05:35:00 +0100

Alkane Resources (ASX: ALK) continues to boost the company's resource potential in the central west of New South Wales, with the discovery of a 200 metre down-plunge extension at the Wellington project.

A diamond core drill hole was used to test the down plunge extensions at the Galwadgere Deposit, to test the known mineralisation from 363 metres.

The highlight was; 14 metres at 1.13 grams per tonne (g/t) gold, 0.94% copper and 0.89% zinc, including 4 metres at 0.94g/t gold, 1.69% copper and 2.98% zinc.

Alkane is already preparing further drilling to evaluate the extended resource potential of the latest discovery.

Wellington hosts several targets, including Galwadgere, with the deposit the focus of Alkane in the most recent exploration effort.

Adding to the potential of the project is favourable infrastructure, just three kilometres from the main Western Railway, and near to power and water.

Alkane carried out a drilling program in 2004-5 which has enabled an initial shallow resource to be calculated.

The initial resource estimate at 0.5% copper cut off is an Indicated Resource of; 2.09 million tonnes 0.99% copper and 0.3g/t gold.

Alkane said the main zone of mineralisation outcrops over a strike length of 350 metres, and is modelled over a total strike length of about 500 metres extending below Permian cover to the north.

The system is structurally overturned and appears to be capped by a lead-zinc-silver-gold rich bedded massive sulphide with results up to 4% zinc, but to date this has rarely exceeded two to three metres in width.

The company added that there is potential for this horizon to increase in thickness to the north and down plunge.

Alkane Resources discovers porphyry style gold copper at Bodangora

Tue, 19 Apr 2011 06:18:00 +0100

Alkane Resources (ASX: ALK) has discovered porphyry gold copper mineralisation after exploratory reverse circulation drilling at the company’s Bodangora Project in New South Wales.

Highlights include:

- 21 metres at 1.51 grams per tonne (g/t) gold and 0.41% copper; and
- 45 metres at 0.9g/t gold and 0.24% copper.

The drill program tested scattered targets within the Comobella Intrusive Complex and nearby areas, and provides the potential to boost the company's gold and copper resource.

The company's Tomingley Gold Project already has an 840,000 ounce gold resource, with a Feasibility Study for the development of the project completed in late 2010 highlighting the potential of an annual 50,000 to 60,000 gold ounce production.

Alkane said financing options for the project remain under investigation.

Alkane also has a joint venture project with Newmont Mining (NYSE: NEM) at the Moorilda Project in New South Wales.

The project has an Indicated and Inferred resource containing 2.96 million gold ounces and 60,000 tonnes copper, discovered in 2006.

Newmont have proceeded to complete a Bankable Feasibility Study for the development of the deposit.

The company also holds a 23% diluting interest for a nickel sulphide joint venture project with Xstrata (LON: XTA) in Western Australia.

Alkane Resources 35% share spike prompts ASX 'please explain'

Tue, 29 Mar 2011 00:53:00 +0100

Alkane Resources (ASX: ALK) shares soared 35% to an intra-day high of $1.84 yesterday, from $1.36 a week earlier, on high volume, prompting an ASX price and volume speeding ticket.

The company said there is no material information that has not been released to the market which may explain the sudden investor interest.

The company did however state in a response to the ASX:

'Last week the company completed an investor relations roadshow in North America based around the updated corporate presentation released on 4 March 2011.'

Alkane also pointed towards two research papers on the company released earlier in March, which may have boosted investor interest in the company.

Alkane Resources lists shares on OTC for foreign investors

Thu, 24 Feb 2011 06:18:00 +0000

Alkane Resources (ASX: ALK) has extended its potential global investor base through the listing of the company's American Depositary Receipts (ADR's) on the Over-The-Counter market OTCQX International.

ADR's essentially create a broader global secondary market for a company's listed securities, and makes it easier for North American institutional and sophisticated investors to acquire an interest in Australian companies such as Alkane.

BNY Mellon will be the depositary bank for Alkane's ADR facility.

In another major forward move by Alkane, earlier in the month the company raised A$21 million for the completion of the Definitive Feasibility Study on the Dubbo Zirconia Project.

The project is one of the most advanced zirconium and rare earth deposits outside of China, with a production due to start during 2014.

Alkane Resources raises A$21m for completion of Dubbo Zirconia Project DFS

Fri, 11 Feb 2011 05:48:00 +0000

Alkane Resources (ASX: ALK) has raised A$21 million through a placement of 20 million shares at $1.05 per share for the completion of the definitive feasibility study (DFS) on the Dubbo Zirconia Project (DZP).

As well as the DFS, the funds raised will be used for ongoing marketing development at the project located in New South Wales and working capital.

Proceeds will also be used for a number of other projects including the preliminary development costs of the Tomingley Gold Project and further resource evaluations.

Evaluation will continue at the company’s other existing gold and copper exploration projects.

The placement was substantially oversubscribed.

The issue price of $1.05 represents a 9.9% discount to the closing price on the last day of trading on the ASX.

The DZP is one of the most advanced zirconium and rare earth deposits outside of China, with a production due to start during 2014.

In December Alkane completed the DFS for its Tomingley Gold Project in the central west of New South Wales.

Tomingley can recover 369,261 ounces of gold over a 7.5 year mine life, representing A$516 million in revenue, according to the DFS base case.

The project offers a cash flow opportunity as Alkane builds its portfolio of projects in the central west of the state.

Alkane Resources is currently trading at A$1.16 per share.

Alkane Resources completes Tomingley Gold Project DFS, proceeds to financing

Mon, 13 Dec 2010 10:03:00 +0000

Alkane Resources (ASX: ALK) has completed the definitive feasibility study (DFS) for its Tomingley Gold Project (TGP) in the central west of New South Wales.

Tomingley can recover 369,261 ounces of gold over a 7.5 year mine life, representing A$516 million in revenue, according to the DFS base case.

The project offers a cash flow opportunity as Alkane builds its portfolio of projects in the central west of the state.

Noah’s Rule Pty Ltd, financial advisors for the TGP, are currently negotiating financing alternatives with hedging facilities to provide gold revenues at least A$1,500 per ounce.

The application for project approval from the NSW Minister for Planning is also being progressed.

Alkane has identified exploration prospects with resource potential in the immediate area of the existing gold deposits that could add to the resource base and extend mine life.

Tomingley is centred on three gold deposits Wyoming One, Wyoming Three and Caloma, located 14 kilometres north of the Company’s Peak Hill Gold Mine.

Importantly, the region has substantial existing infrastructure with a population base exceeding 150,000.

The DFS was compiled by Mintrex Pty Ltd, the consulting division of Perth engineering group, Holtfreters Pty Ltd with input from Alkane personnel and external consultants.

The base case development for the TGP will comprise open pit mining from the Caloma, Wyoming One and Wyoming Three pits and underground mining from Wyoming One.

The Caloma pit will be mined first, followed by Wyoming Three and Wyoming One. Ore from the Caloma pit will be hauled under the Newell Highway using a purpose bulit underpass.

The company plans to feed high grade ore that will be processed on site to the mill and to stockpile lower grade ore to be processed later in the life of the mine.

Tomingley Gold Project currently has an 840,000 ounce gold resource within the Wyoming and Caloma deposits, development potential is for 50,000 to 60,000 ounce per annum production.

Alkane's other major projects include the Dubbo Zirconia Project, the only heavy rare earths project outside China to come onstream in the next couple of years, and the McPhillamys Gold Project, one of the biggest gold finds in NSW over the past decade.

Alkane has a market capitalisation of A$210 million and had A$6.8 million cash at the end of the September quarter with no debt.

Alkane Resources establishes American Depositary Receipt Program

Tue, 02 Nov 2010 09:15:00 +0000

Alkane Resources (ASX: ALK) has created a broader secondary market in its listed securities with the establishment of a sponsored American Depositary Receipt (ADR) Program, which allows US investors to trade Alkane securities without a cross currency transaction.

The ADRs will be tradeable through licensed US brokers in the ordinary course of trading in the over the counter market.

Alkane operations are focussed in the Central West of New South Wales, with the Dubbo Zirconia Project based upon a world class resource of the metals zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements.

The comany's Tomingley Gold Project currently has an 840,000 ounce gold resource.

Alkane Resources points to rare earth element interest in the stock

Wed, 13 Oct 2010 12:03:00 +0100

Alkane Resources (ASX:ALK) has responded to an ASX price and volume query.

It had no information which explained the increase in price other than the general market interest in companies with rare earth element assets.

The ASX noted that the shares spiked to $1.03 in midday intra-day trading, after opening at $0.845.

Alkane Resources confirms gold mineralisation continuity at McPhillamys

Wed, 06 Oct 2010 10:20:00 +0100

Alkane Resources (ASX:ALK) has completed three diamond drill holes at McPhillamys in NSW, within the Orange District Joint Venture with Newmont Australia Limited (NAL), confirming the continuity of the mineralised envelope.

The holes were designed to test for a northerly plunge to the higher grade core to the gold mineralisation.

The three diamond drill holes (NEWD009 – 011) totalled 2,235 metres. An existing core hole KPD016 was also extended from 781 metres to 998 metres and was cored in the western footwall sequence and did not intersect any +0.5g/t gold mineralisation.

Results include:

- Hole NEWD009 52 metres grading 1.08g/t gold from 403 metres including 37 metres grading 1.33g/t gold from 417 metres;
- Hole NEWD010 94 metres grading 0.77g/t gold from 449 metres including 30 metres grading 1.49g/t gold from 490 metres; and
- Hole NEWD011 119 metres grading 0.82g/t gold from 416 metres including 64 metres grading 1.08g/t gold from 416 metres.

The drilling has confirmed that the geological controls to the higher grade mineralisation are still not well understood and more detailed drilling would be required to fully evaluate the orientation of those zones.

The previously reported Indicated and Inferred Resources at McPhillamys were 91.94 million tonnes grading 1.00g/t Au and 0.07% Cu (2.96 Moz) at 0.3g/t gold cut-off; or 60.86 million tonnes grading 1.32g/t Au and 0.08% Cu (2.57 Moz) at 0.5g/t gold cut-off.

The Orange District Exploration Joint Venture (ODEJV) includes Alkane’s Molong and Moorilda tenements located near the city of Orange in the Central West of New South Wales, adjacent to Newcrest Mining's (ASX: NCM) Cadia Valley Operations.

NAL earned a 51% interest in the ODEJV in August 2009. In March 2010 NAL elected to proceed to 75% by completing a Bankable Feasibility Study (BFS) on the McPhillamys Project. NAL is a subsidiary of the US based Newmont Mining Corporation (NYSE: NEM).

Alkane is cashed up with $8.7 million, with no debt, and has a market capitalisation of A$175 million. The company's shares rose 5.6% to 75.5 cents in trading today.

Alkane Resources adds rare earth circuit at Dubbo plant

Tue, 17 Aug 2010 08:27:00 +0100

Alkane Resources (ASX: ALK) has started larger scale production of an yttrium heavy rare earth concentrate from the new rare earth circuit at its Demonstration Pilot Plant (DPP) at ANSTO as part of the Dubbo Zirconia Project (DZP) in New south Wales.

The company considers the development as an important commercial step for the DZP. The yttrium concentrate will be distributed to potential customers worldwide for review and assessment.

Recent developments by China, the world’s largest producer of rare earths, has resulted in restricted availability of rare earth products and escalating prices for these outside of China.

This has seen the rare earth basket of prices within the DZP climb dramatically in 2010 to $27.76 for LREE, and $63.80 for YHREE in early August.

The yttrium and heavy rare earth distribution in the ore body is unusual with 25% in the heavy category (standard distribution 95% light and 5% heavy) with this generating a higher than average return for the rare earth product.

These developments emphasise the strategic significance of the DZP as a supplier of yttrium and rare earths, as well as increasing sales revenues for these products to over 40% of total DZP revenues.

The Demonstration Pilot Plant (DPP) at ANSTO has been operating since 2008 and has proven the flow sheet for the DZP. Substantial zirconium and niobium products have been distributed to potential customers around the world.

A development commitment for the DZP is anticipated in early 2011. The DZP is one of three key projects being undertaken by Alkane in the central west of New South Wales.

The other two projects include Tomingley Gold, which is the final stages of its feasibility study and McPhillamys Gold, Alkane's joint venture with Newmont Australia.

Newmont is proceeding to complete a Bankable Feasibility Study for the development of this deposit which has been described as one of the biggest NSW gold finds in the past decade.

Alkane has 249 million shares, a market capitalisation of A$103 million and $8.7 million cash with no debt.

Alkane Resources confirms more gold resource potential at Tomingley

Mon, 16 Aug 2010 08:40:00 +0100

Alkane Resources (ASX: ALK) has reported that drilling at its Tomingley Gold Project located in the Central West of New South Wales, which is in the final stages of its feasibility study, has confirmed the potential of additional resources within the Caloma deposits.

Alkane is looking to expand the project by defining additional resources from the Caloma deposits (Caloma One and Caloma Two) and targeting a 10 year mine life. This includes testing the underground potential at Caloma One and further drilling to definine the gold resource at Caloma Two (South Caloma).

Results include:

- Hole PE654 15 metres grading 4.27g/t gold from 39 metres including 2 metres grading 27.2g/t gold from 46 metres;
- Hole PE655 6 metres grading 8.07g/t gold from 132 metres PE658 11 metres grading 3.85g/t gold from 121 metres and 3 metres grading 5.33g/t gold from 141 metres; and
- Hole PE659 5 metres grading 3.80g/t gold from 162 metres 15 metres grading 2.18g/t gold from 39 metres and 3 metres grading 11.05g/t gold from 102 metres.

Currently, the project has an 840,000oz gold resource within the Wyoming and Caloma deposits and a base case seven year mine life.

The project feasibility study is in its final stages and is based on open pit mining of the Wyoming One, Wyoming Three and Caloma deposits plus an underground operation at Wyoming One to recover approximately 400,000 ounces.

Exploration to define additional resources is continuing and includes the underground potential at Caloma and this new mineralisation at Caloma Two.

Alkane said further RC drilling will be programmed to define resources at Caloma Two.

Alkane Resources trading at discount to valuation of A$0.91

Mon, 26 Jul 2010 08:20:00 +0100

London-based Edison Investment Research has prepared an analysis and valuation of Alkane Resources (ASX: ALK).

"Alkane has its main project area centred south of the township of Dubbo in New South Wales. Having been formed in the late 1960s as a coal seam gas exploration company, Alkane has evolved into a mining exploration company with near term production from gold and rare metal and rare earth projects, an eventual 25% stake in a potentially lucrative joint venture with Newmont Australia Limited, and a number of other exploration targets.

A definitive feasibility study is underway at the Tomingley Gold Project to prove up the gold resource and incorporate a potential underground mining phase. Dubbo has a near endless supply of ore, with the project’s viability defined not through resource delineation but through process routes and the production of saleable concentrates to market.

These latter points are being addressed by Alkane’s own pilot processing plant located in Sydney, which has proven successful in producing quality zirconium, niobium and rare earth concentrates such that key letters of intent are being discussed with potential future buyers. These letters of intent are a key inclusion in a definitive feasibility study being completed for the project in H210.

With exposure to both near-term gold production and an advanced rare earths project, Alkane is unique among its peers. Mining at its Tomingley Gold Project is planned for 2012, while the Dubbo rare metal and rare earth project is expected to come online by 2013.

Capex for these projects has been estimated at A$90m and A$150m respectively. In addition, Alkane has a free carried 25% interest on a 2.96Moz gold resource currently being developed by Newmont. Together we value
these assets at A$0.91 per share.

Snapshot
Price: 33c
Market Cap: A$82m
ASX Code: ALK
Shares in issue: 249m
Price: 52 week High: 47.0c Low: 23.0c
Balance Sheet as at 30 June 2010
Debt/Equity (%) N/A
NAV per share (c) 17
Net cash (A$m) 8.7

Tomingley moving forward

Alkane’s main focus is to start mining its wholly-owned Tomingley Gold Project (TGP). The TGP contains a total resource of around 660koz gold, with initial plans to extract approximately 290koz via open pit in FY12-16, with a further 110koz from blending low grade stockpiled ore with high grade from a short underground mining phase in FY17-18.

Dubbo advancing

A 400ktpa production rate is scheduled for Dubbo, which contains a large 73Mt resource of zirconium, niobium and rare earth metals. Crucially Alkane has advanced the process routes for separating many of the valuable zirconium, niobium and rare earths products beyond that of many of its peers’ rare earths projects around the
world.

Confidence growing at McPhillamys

Alkane recently released an initial independent resource estimate for McPhillamys of 2.96Moz at 1g/t Au with gold recoveries between 86% and 91%. Alkane currently has a 49% interest in this project, which is majority held by JV partner Newmont Australia Ltd (51%), which, on completion of a BFS, will earn a further 24% stake.

Valuation: Shares trade at 68% discount to total valuation

Our valuation sees Tomingley come online in 2012 and Dubbo in the following year, with mine lives of seven and 20 years respectively. On this basis our discounted cashflow analysis is worth A$0.49 per share in current money terms (at a 10% discount rate). To this should be added A$0.42 for McPhillamys for a total valuation of A$0.91 per share.

Valuation: First cashflow forecast FY12

We have valued Alkane on a ‘base case’ scenario, with 2012 seeing the commencement of mining at Tomingley and Dubbo entering production in 2013. Tomingley is due to be mined over a seven year period and we have notionally valued Dubbo on a 20-year mine life, even though the current resource estimate indicates at least 200 years of ore, based on a 400,000tpa production rate. On this basis we estimate that the dividend stream to investors from 2010 to 2032 will be worth A$0.49 in current money terms (using a 10% discount rate to reflect general equity risk).

This then rises to A$0.59 in 2012 as Dubbo comes online and complements the TGP’s revenue stream. In addition to Tomingley and Dubbo an initial resource estimate has been completed for the McPhillamys deposit, which we have valued using derived figures for measured, indicated and inferred gold ounces. On this basis Alkane’s interest in the JV is worth A$0.42 per share resulting in a total valuation for the company of A$0.91."

Alkane Resources defines gold resource of 3m ounces at McPhillamys in New South Wales

Mon, 05 Jul 2010 08:17:00 +0100

Alkane Resources (ASX: ALK) has inked a maiden resource estimate of 2.96 million ounces of gold for the McPhillamys gold discovery, located within the Orange District Exploration Joint Venture with Newmont.

An independent resource assessment by Richard Lewis of Lewis Mineral Resource Consulting Pty Ltd in Sydney. defined an initial Indicated and Inferred Resource at a 0.3g/t gold cut-off of 91.94 million tonnes grading 1.00g/t Au and 0.07% Cu for a cumulative total of 2.96 million ounces of gold and 60,000 tonnes of copper.

Alkane is in a joint venture with Newmont Australia Limited, a subsidiary of the US based Newmont Mining Corporation (NYSE: NEM) over the Orange District Exploration Joint Venture, 400km northwest of Sydney, which includes Alkane’s Molong and Moorilda tenements located near the city of Orange in the Central West of New South Wales, adjacent to Newcrest Mining Ltd’s Cadia Valley Operations.

The bulk of the Resource is located within an Inner Ore Zone with dimensions of 600 metres by 200 metres.

Further drilling is likely to significantly expand the resource.

Potential development models include open pit and block caving underground mining concepts.

Currently the JV is drilling four deep core holes to specifically test the potential for the block caving concept.

Regional exploration has defined several targets with McPhillamys type stratigraphy and mineralisation over a strike length of at least 6 kilometres. Aircore test drilling is in progress.

Newmont Australia Limited earned a 51% interest in the JV in August 2009. In March 2010 NAL elected to proceed to 75% by completing a Bankable Feasibility Study on the McPhillamys Project.

Alkane is cashed up with $8.7 million with no debt.