Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) earlier this week provided an operational and corporate update ahead of the proposed merger with Mandalay Resources. Managing director Nic Earner talked with Proactive about recent developments.
Highlights
- Alkane Resources delivered just over 70,000 ounces.
- Tomingley operations are performing well, with a strong run rate and major infrastructure — including pace plant and flotation circuits — fully commissioned.
- Cash position improved quarter-on-quarter despite ongoing capital expenditure.
- Exploration continues at the Northern Molong Porphyry Project, including drilling at Drill Creek.
- Mandalay merger progressing — shareholder votes are scheduled for July 28, with finalisation expected by August 5.
- Post-merger entity projected to have over AU$140 million in net cash and production between 160,000 to 200,000 ounces per year.
- Mandalay on track to exceed mid-point of 85,000–95,000 ounce guidance for CY2024.
By the numbers
Alkane Resources delivered just over 70,000 ounces of gold, meeting the lower end of production guidance. It noted strong output from the Tomingley operations, supported by the full commissioning of its processing infrastructure, including the flotation and fine grind circuits.
Earner highlighted that the mining rate has reached 1.1 million tonnes per annum. The company told investors that this performance enabled a AU$10 million quarter-on-quarter cash build, despite capital expenditure programs.
Ongoing exploration
Exploration remains ongoing across the Northern Molong Porphyry Project. Earner noted that results continue to confirm size and scale in the Boda-Kaiser corridor, while the Drill Creek prospect remains interesting but has not yielded game-changing grades.
Mandalay merger
The proposed merger with Mandalay Resources continues to progress. Alkane confirmed that both the Swedish Foreign Direct Investment Board and Australia’s FIRB have given approvals. Shareholder votes are scheduled for July 28, followed by court ratification in British Columbia on August 1st and completion on August 5.
Alkane told investors that the combined entity will have more than AU$140 million in net cash after the transaction. It projected combined annual production in the range of 160,000 to 200,000 gold-equivalent ounces.
Mandalay’s operations are reported to be tracking above the mid-point of its 2024 guidance of 85,000 to 95,000 ounces. The company said it held USD 101.00 million in cash as of June 30th.
Alkane noted that the combined business will be listed on both the ASX and TSX, and expects strong free cash flow generation. It told investors the pro forma company remains undervalued compared to peers of similar production scale.