Alkane Resources Ltd (ASX:ALK) (OTCMKTS:ALKN) (FRA:AK7) has delivered a half-year profit after tax of A$38.8 million, primarily driven by a 90% increase in gold production at the Tomingley Gold Operations (TGO) in Central West NSW along with the successful demerger of Australian Strategic Minerals (ASX:ASM).
Production for the period at TGO was 27,418 ounces of gold with all in sustaining costs of A$1,358 per ounce compared to the 14,427 ounces of gold produced in the December 2019 half-year.
Tomingley continues to perform well and is processing underground stope material with recovery as expected.
Cutback in the northeast of the Caloma pit is progressing ahead of schedule and the underground portal from the base of the Caloma pit has also been cut.
Underground ore feed is supplemented by low-grade stockpiles whenever capacity permits.
Tomingley extension project
An extensive exploration program focused on the immediate area to the south of the Tomingley mine has continued as part of the plan to source additional ore feed, either at surface or underground.
On the back of strong results from exploration and resource drilling to the immediate south of Tomingley at the Roswell and San Antonio deposits, Alkane is expediting the process to move to mine development.
The company has started the approval process for Roswell and San Antonio as consultation with regulators, landholders and other stakeholders needed for the Environmental Impact Statement continues.
Feasibility plans that include both open cut and underground mines at Roswell and San Antonio are expected to be finalised in the coming quarter once the San Antonio indicated resource is completed.
During the quarter the exploration program, which focused on both increasing the drilling density within the Roswell and San Antonio prospects as well as testing strike and depth extensions, was completed.
At Roswell, drilling confirmed the continuity to the defined mineralisation and continued to highlight thick high-grade intersections.
A 30,000-metre follow-up drilling program at the Boda discovery northeast of TGO in the Northern Molong Volcanic Belt also continues with a second rig mobilised to the site.
Results have demonstrated a subvertical elliptical zone of significant gold-copper mineralisation indicative of a large, alkalic porphyry system.
Subsequent drilling, which is planned to target across the northwest structural zone will begin early next year.
On December 31, 2020, the company’s cash, bullion, and listed investments totalled A$82.3 million, with A$33.3 million in cash, bullion on hand at a fair value of A$2.7 million and A$46.3 million of listed investments at market value.
Guidance for FY2021 has been increased to 47,000 to 52,000 ounces at an AISC of A$1,450 to A$1,600 per ounce.