All about the porphyry targets! Boda prospect hit 502m at grades better than NCM's nearby Cadia mine. ALK currently undergoing drilling to test depth and strike. Program could define a resource as big as 600m (L) by 250m (W) by up to 1200m (D). Assuming SG of 2.5x and step outs are consistent with KSDD003 discovery hole, the resource could range from ~170Mt to ~450Mt of bulk Au Cu grade. This implies an EV of ~$600m to ~$2100m or SP value of ~$1.05/sh to ~$3.69/sh. SP of writing is $0.67.
Additional analysis suggests the down dip hole will strike through a rich high grade potassic core zone in the porphyry. If the result (due Feb 20) shows as such, the grade could be 2x to 3x richer than first thought. As such my high case scenario would prove to be conservative with an estimated 12Moz Au equiv potentially being in the range of 15Moz to 25Moz Au equiv.
Attached is a picture of my SoTP valuation for ALK. The new resource definition at Roswell and San Antonio deposits can support a reserve of 500koz+. This will provide new life to TGO and support an 80koz p.a. prdocution rate for 5yrs+. Likely to see the ore put through the mill in CY21. Revitalised TGO worth ~$0.45/sh using peer multiple comps. ASM worth about $0.15/sh. Boda implied EV is ~$0.21/sh with a probability adjusted EV of $1.60.sh. 7.6 to 1 pay off profile on Boda exploration success. Boda is a deposit, just have to show how big and economical it can be.
08-May-2020: Approval Received for Underground Exploration Drive
The NSW Government Resources Regulator has granted approval for Alkane Resources Limited (ASX: ALK) to develop an exploration drive from its existing Wyoming One underground operations, to the Roswell and San Antonio deposits, approximately four kilometres to the south of the mine.
This is an important milestone towards a future potential underground mine at Roswell and San Antonio that could be developed independently of an open cut operation. The exploration drive will be sized such that it could also accommodate production in the future.
Managing Director, Nic Earner, said: “Alkane has the equipment purchased, personnel recruited and land acquired to allow this development to proceed and we will now incorporate the timing of the drive development into the Tomingley Gold Operations’ budget schedules, as well as our regional exploration plans.”
“Given the prospectivity of the region around our existing operations, this approval provides Alkane with all the exploration and, in time, production options, to extend the life of mine at Tomingley well into the future.”
Tomingley Gold Project
Alkane Resources Ltd 100%
The Tomingley Gold Project (TGP) covers an area of approximately 440km2 stretching 60 kilometres north-south along the Newell Highway from Tomingley in the north, through Peak Hill and almost to Parkes in the south. The TGP contains Alkane’s operating Tomingley Gold Operations (TGO), an open pit mine with a 1Mtpa processing facility that is transitioning to underground.
Over the past two years Alkane has conducted an extensive regional exploration program with the objective of defining additional resources that have the potential to be mined either via open pit or underground operations and fed to the TGO processing facility.
The exploration program has yielded broad, shallow, high-grade intercepts that demonstrate potential for material project life extension in excess of 10 years, and show that a return to open pit mining and/or underground extension is possible with appropriate resource confirmation, landholder agreement and regulatory approvals.
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Southern step out hole released yesterday. Biggest and highest grade hit to date. Still haven't found the core so could get richer at depth too. Looking like another Cadia East. Going to be a monster.
29 Apr-2020: Quarterly Activities Report
Tomingley Gold Operations
TOMINGLEY GOLD OPERATIONS (ALK 100%)
Tomingley Gold Operations (TGO) is a wholly owned subsidiary of Alkane, located near the village of Tomingley, approximately 50km southwest of Dubbo in Central Western New South Wales. The gold processing plant was commissioned in January 2014 and has been operating at the design capacity of 1Mtpa since late May 2014. Mining is based on four gold deposits (Wyoming One, Wyoming Three, Caloma One and Caloma Two).
--- click on the link above for the entire report, which includes information on the TGO Underground Mining Development and the Tomingley Project Extension ---
(*1) AISC = All In Sustaining Cost comprises all site operating costs, royalties, mine exploration, sustaining capex, mine development and an allocation of corporate costs, calculated on the basis of ounces produced. AISC does not include share based payments or net realisable value provision for ore inventory.
(*2) Operating cashflow = As prescribed by AASB 107 Statement of Cashflows where exploration outflows and development outflows are grouped under investing cashflows.
Either the market was disappointed by the low grades of gold in these assay results or/and there was some profit taking today, as ALK were down -17% to 68.5c today, but they're still up +37% from their March low of 50 cps.
20-April-2020: Initial San Antonio Inferred Resource
Initial San Antonio Inferred Resource Lifts Tomingley Corridor Resources To Over 1 Million Ounces of Gold
--- click on link above for more ---