Alkane Resources (ASX:ALK, OTCQX:ANLKY) has hit a key milestone with the receipt of Federal Government environmental approval for the proposed mining of the Toongi deposit at its Dubbo Zirconia Project in New South Wales.
This places the company a step closer towards securing a Mining Lease as well as secure project financing and advance the project into the development phase.
DZP hosts a very large polymetallic resource of the metals zirconium, hafnium, niobium (tantalum), yttrium and rare earths.
As a non-Chinese source of these critical metals, the project is expected to be an internationally strategic project.
Front-end Engineering and Design pre-construction work has been completed by international engineering company Hatch with further analyses expected to shortly result in a bankable standard document.
The project also received in late May final development approval for the project from the New South Wales Planning Assessment Commission.
Discussions have also been held in relation to process development, tolling, product off take and financing.
Dubbo Zirconia could finalise offtake and financing in 2016 with first production towards the end of 2018.
Environmental Approval
The Federal Department of the Environment has assessed the proposed mining of the Toongi deposit and its impact on the Pink-tailed Worm-lizard (PTWL), a threatened species within the provisions of the Act, and yesterday notified the company of its approval of the development.
This approval incorporates a schedule of conditions including a maximum limit of ground clearance of the defined extent of the PTWL habitat; submission of a mine site PTWL Management Plan; submission of a Biodiversity Offset Management Plan and securing of the lands identified as the Offset Area as a biodiversity offset by legal instrument.
Compliance conditions also include requirements for reporting and publication on the Company’s website of the annual compliance report.
The PTWL, or Aprasia Parapulchella, is a small legless lizard found in fragmented populations in New South Wales, Australian Capital Territory and Victoria.
Its initial discovery on the outcropping orebody at Toongi was made in 2001 and since then Alkane has initiated a multidisciplinary research program to monitor and understand the population and to develop an innovative solution for its conservation.
A comprehensive PTWL Plan of Management was submitted as part of the Environmental Impact Statement (EIS) in the application process for State government development consent for the Dubbo
Zirconia Project (granted 28 May 2015).
This set out the proposed measures for management of the PTWL population on the project site and the areas proposed for biodiversity offset.
Dubbo Zirconia Project
The Dubbo Zirconia Project (DZP) is located 25 kilometres south of the large regional centre of Dubbo in the Central West Region of New South Wales.
It currently has Proved and Probable Ore Reserves of 35.93 million tonnes at 1.93% ZrO2, 0.04% HfO2, 0.46% Nb2O5, 0.03% Ta2O5, 0.14% Y2O3 and 0.74% rare earth oxides.
This supports 35 year mine life at 1 million tonne ore processing per annum with defined resource potentially supporting a significantly longer operation.
Alkane has developed a flow sheet consisting of sulphuric acid leach followed by solvent extraction recovery and refining to produce several products, including trialling the process at demonstration pilot plant scale.
The project has a demonstrated flow sheet with pilot plant and products for market evaluation at ANSTO.
Analysis
The Federal Environmental Approval is a key milestone for Alkane Resources’ Dubbo Zirconia Project and places it a step closer towards securing a Mining Lease.
With discussions expected to result in securing offtake and financing in 2016, the project is well on its way towards starting production in 2018.
Alkane remains well-funded with A$14.8 million in cash at the end of June 2015, along with A$4.8 million in bullion and no debt.
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