Company
ASX:ALK
Alkane Resources (ASX:ALK; TSX:ALK; OTCQX:ALKEF) is an Australia-based gold and antimony producer. The company has three wholly owned producing mines across Australia and Sweden: Tomingley (gold, NSW), Costerfield (gold-antimony, Victoria) and Björkdal (gold, northern Sweden). Alkane also owns the large gold-copper porphyry Boda-Kaiser Project in NSW
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Today’s update indicates gold production at Tomingley has even surpassed revised production guidance, which was updated in April because of higher-than-expected material grades.
The San Antonio mineral resource estimate stands at 406,000 ounces of gold while Roswell has 660,000 ounces to date.
Alkane produced 16,000 ounces of gold at the Tomingley Gold Mine in NSW during the March quarter which exceeded stockbroker Ord Minnett’s expectations by 33%.
Ord Minnett has a buy recommendation and a $1.30 per share price target for Alkane, which is a 48% valuation upside on the current share price of 88 cents.
Assays received from the current drilling program at Boda and Boda Two comprised of seven diamond core holes for a total of 10,091 metres.
Higher gold production in the March quarter prompted the company to increase its financial year 2021 guidance to 50,000-55,000 ounces at a reduced all-in-sustaining cost (AISC) of A$1,400 to A$1,550 per ounce.
The gold producer has again increased its 2021 financial year guidance to 50,000-55,000 ounces at a reduced AISC of A$1,400 to A$1,550 per ounce.
“Our drill program is revealing not only the very large scale of Boda, but potential repeat systems of significant scale within a structural corridor,” says MD.
The company’s guidance for FY2021 has been increased to 47,000-52,000 ounces at an AISC of $1,450 to A$1,600 per ounce.
The company is preparing detailed mine plans for Roswell and San Antonio to enable an economic assessment and aims to release them later this quarter.
With a major drill program ongoing at Boda throughout 2021, Alkane is confident of further consolidating the reputation of Central West NSW as a major gold production region.
Once the Indicated Resource for San Antonio has been calculated, the company expects to release mine plans for the deposit which will allow an economic assessment to be prepared.
The quarter was highlighted by $38.2 million in gold sales from its Tomingley Gold Operations in NSW along with strong results from drilling.
Boda is a landmark porphyry gold-copper system which the company believes has the potential to be a large, tier-one gold-copper project.
The San Antonio updated resource estimate will be released once the assay results are received, expected to be mid-January 2021.
Drilling continues to expand the footprint of Boda and remains open to the northwest, south and at depth.
Drilling is continuing in the prospective corridor south of Roswell and an updated mineral resource for the neighbouring San Antonio deposit is anticipated next month.
San Antonio infill resource drilling is continuing ahead of an updated mineral resource estimate, with preliminary mine plans for Roswell and San Antonio scheduled for release by the end of the year.
The company’s near-term plans include developing its Tomingley Extension Project, exploration of the Boda disocvery as well as strategic gold investments.
The company delivered a profit after tax of $12.8 million for the financial year ended 30 June 2020.
