Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) earlier this week presented first-time results from the Costerfield gold project to Australian investors, while also confirming that its merger with Mandalay Resources has received full shareholder approval.
- Nic Earner presented Costerfield drill results for the first time to an ASX audience.
- Intercepts included up to 20oz/t over 400mm and nearly 1oz/t across full mining widths.
- Costerfield is described as high-grade, profitable, and cash-generating.
- Reception at the Noosa Mining Investor Conference was strong.
- Alkane and Mandalay shareholders voted 99%+ in favour of the merger.
- The merged entity would have produced 161,000oz and ~$100 million in post-tax cash flow over the past 12 months.
- Final merger steps include TSX listing and board appointment on completion.
- Updated guidance and corporate strategy will be issued in the September quarter.
- Investors are encouraged to monitor index inclusion and valuation comparisons.
History is on Costerfield's side
The Costerfield project, located near Bendigo in Victoria, had historically been reported through Mandalay’s TSX listing and had not been widely seen by ASX investors. The company presented intercepts from the True Blue and Extension areas near Costerfield, highlighting their high-grade nature.
“You have nearly an ounce per tonne across full mining widths… these are phenomenal grades,” Earner said at the Noosa Mining Investor Conference. The company said diluted hit grades at Costerfield had historically been around 12 grams per tonne from underground operations.
Mandalay merger
Alkane confirmed that over 99% of shareholders from both Alkane and Mandalay voted in favour of the merger, which today jumped its final hurdle. The company said completion is expected shortly after British Columbia court ratification, with a TSX listing and board appointments to follow.
The company highlighted that, had the merged entity operated as one over the past 12 months, it would have produced 161,000 ounces of gold and generated nearly 100.00 million dollars in post-tax cash flow.
Following the completion of the transaction, Alkane expects to release updated operational guidance and strategic plans during the September quarter. The company also said that it expects investors to closely watch for impacts from potential index inclusion and peer valuation comparisons.
Earner said the Costerfield operation, which has been producing since the mid-2000s, remains reliable and profitable. “It’s very reliable, very profitable, generating a lot of cash at the moment,” he said.
The company said these developments reinforce its positioning as a gold producer with scale, cash flow, and growth potential.