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Alkane Resources retains 12.7% major shareholding in WA gold pre-developer Calidus

Published: 04:00 24 Jul 2020 BST

Alkane Resources Ltd - Alkane Resources retains 12.7% major shareholding in WA gold pre-developer Calidus
Funds will be used for the start of early works at the Warrawoona Gold Project

Alkane Resources Limited (ASX:ALK) (OTCMKTS:ALKEF) has retained its 12.7% major shareholding in gold explorer Calidus Resources Limited (ASX:CAI) after participating in a $25 million share placement.

There was strong institutional demand for the placement at a price of 51 cents per share with the firm bids well in excess of the placement amount.

Alkane, which is transitioning to a total focus on gold, invested $3.2 million to retain its percentage ownership.

Dual Warrawoona strategy

Proceeds will be used to fund a dual strategy involving the start of early works at the Warrawoona Gold Project in Western Australia and enlarging the company’s exploration programs.

Calidus managing director Dave Reeves said: “The strong demand from institutions and existing shareholder, Alkane Resources, highlights the superb level of support for our strategic plan to accelerate development of Warrawoona and unlock the exploration potential of the region.”

The WA explorer and pre-developer plans to accelerate development of Warrawoona and undertake aggressive exploration programs.

1.495-million-ounce resource

Warrawoona, which is in the East Pilbara district of the Pilbara Goldfield, hosts a total resource of 1.495 million ounces at 1.06 g/t.

This includes measured resources of 2.3 million tonnes at 0.98 g/t for 72,000 ounces, indicated resources of 30.4 million tonnes at 1.00 g/t for 982,000 ounces and inferred resources of 11 million tonnes at 1.33 g/t for 442,000 ounces.

These have been defined over a continuous 5 kilometres of strike which remains open in all directions.

The company controls around 669 square kilometres of prospective tenements that host more than 200 historic workings and includes three satellite mineral resources - Fieldings Gully, Copenhagen and Coronation.

Feasibility study underway

A robust PFS initially delivered in July 2019 and updated on June 29, 2020, shows a base case of Warrawoona producing on average 85,000 ounces over the first six years, with a total production of 623,000 ounces over an 8-year mine life, at an AISC of A$1,251 per ounce.

Calidus has a feasibility study underway along with the permitting process and construction is planned to begin in the first quarter of 2021.

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