They released a scoping study for their Boda project (large, low grade project).

https://hotcopper.com.au/threads/ann-boda-kaiser-scoping-study.8090436/?source=email

Hot Copper seems excited, I'm not particularly. They used a 7% discount rate, which tells me that the project isn't that good.

I think Boda is basically leverage on the gold or copper price increasing.

Further smackdown for ALK courtesy of MSCI Australia rebalance

Check if your stock is on the list to to see why your holdings underperformed or outperformed.

Bit of a shock PLS and IGO is there and explains the lacklustre performance this month (I nearly bought IGO)

Notice came out that Gandel reduced his holding in Alkane

Done the same late in the week and no longer hold given the price has been underperforming other goldies at present. Plus had the feeling he was selling given he tipped more money into ASM on the recent capital raise.

Still keeping on my watchlist to see how Boda/Kaiser shapes up and Tomingley extension approvals as well.

Edison Broker report

4A1381B2-D927-8F23-F1B134A5CFB62616.pdf

One of my underperformers here and IRL. If it wasn't for ALK I'd probably be outperforming the ASX.

Weather could be impacting underground operations due to all the rainfall in NSW West and South West.

[held]

Alkane released a Youtube Video here. https://www.youtube.com/watch?v=pMlXVp9G4T8

Looking at the grade, I think they'll struggle to mine it at current copper/gold prices, but I really don't know as it looks like a bulk resource - it seems like there's a good chunk of both gold and copper in the potential revenue. Worth noting with that graph below is that it is logarithmic.

To add a bit of context on the Boda resource estimate and what it means, there is a useful chart in the presentation representing tonnage versus grade

Basically the chart shows that at high tonnage, the grade is low (around 0.51g/t) at 0.3g/t cutoff grade (which implies higher capex). But as we move across and cutoff increases, the grade is higher but tonnage is small so resource will be smaller than before at the 0.3g/t cutoff.

You could also put the numbers in excel and it will clearly show the MRE numbers trending down as the cutoff increases..

This chart would explain be why share price did not move much on the announcement. Nevertheless it presents a good picture of the challenges faced at Boda to find a way of getting the grades or tonnage increased compared to the cutoff.

Held.

Just doing some ballparking on Alkane.

Current market cap is 556 mil. (94c/share)

Tomingley mine extension was listed as a capital cost of 87m. (Let's round that up to 100m to include funding costs)

Running their figures through a DCF @10%, with an AUD gold price of $2300 and AISC of $1320 for the next two years and $1400 thereafter for 8 more years, we get a value of 334mil. I'm not sure if there are further years predicted after this - I just took it from the YouTube clip.

44m current liabilities, 33m cash and similar.

They also hold investments in Genmin currently worth 75 mil (just under 20%) and Calidus currently worth 23mil (just under 10%).

Value of Tomingley + investments = 334m - 100m + 33m - 44m + 75m + 23m = 321m. (or ~57.5c/share)

I like Alkane's management. They have a produced shareholder returns and would expect them to hit or exceed their projections.

This leaves Boda and any other projects they have. I haven't looked at these in detail. One thing I should have mentioned with Boda previously is that while many of their hits have been low grade, they have been massive intersections (500m+).

I haven't looked at Boda in detail and am not sure how to value it.

Further drilling results released near Boda. They seem low grade to me, but these drilling results expand the target area. Hot copper seems to think the area is massive.

https://hotcopper.com.au/threads/ann-high-grade-continuity-north-west-of-boda.6492743/

08-July-2021:  Tomingley Exceeds FY2021 Production Guidance

Alkane is pleased to announce its Tomingley Gold Operations in central west New South Wales has exceeded its FY2021 production guidance of 50,000oz to 55,000oz. This guidance was upgraded in April from original full year guidance of 45,000oz to 50,000oz. The exceedance is primarily due to the grade of material processed being higher than forecast.

Key points

• Tomingley Gold Operations has exceeded FY2021 production guidance, which was upgraded after the March 2021 quarter.
• FY2021 gold production was 56,958oz (guidance 50,000oz to 55,000oz).
• FY2021 preliminary AISC was $1,320/oz (guidance $1,400/oz to $1,550/oz).
• Group unaudited cash, bullion and listed investments position at 30 June 2021 totalled A$73.9M.
• FY2022 production guidance for Tomingley is 55,000oz to 60,000oz at an AISC of $A1,450/oz to $1,600/oz.

Tomingley produced 56,958oz of gold for the 12 months to 30 June 2021, with preliminary all in sustaining costs (AISC) of $1,320/oz, which fell below the Company’s cost guidance of $1,400/oz to $1,550/oz, for the same period. The strong 12-month performance at Tomingley has coincided with the finalisation and release of the updated Life Of Mine plan (ASX Announcement 3 June 2021) that extends the Tomingley Gold Operations to at least 2031.

The Group’s unaudited cash, bullion and listed investments position at 30 June 2021 totalled A$73.9M, comprising $19.0M cash, $7.7M of bullion in hand and $47.2M of listed investments. Alkane also has $20M in undrawn credit approved facilities.

Alkane’s guidance for FY2022 gold production from Tomingley is 55,000oz to 60,000oz, at an AISC of A$1,450/oz to A$1,600/oz.

Alkane Managing Director, Nic Earner, said: “Tomingley continues to meet or exceed our expectations, demonstrating why it is a great asset managed by a highly professional and committed Operations team. With an updated mine plan that extends the life of Tomingley to at least 2031, at increased production rates, we remain buoyant about the longer-term prospects both at Tomingley and at our Boda exploration tenements. Alkane’s Board and management acknowledge and thank the teams at Tomingley and in Exploration for their strong and continued safety, production and discovery performance.”

--- ends ---

That (above) was the content of the email I received from ALK this morning.  Click on the link at the top for the ASX announcement.  Disclosure:  I do not hold ALK in RL, however they are one of the smaller positions in my Strawman.com virtual portfolio, and they're up +115.78% so far.  If I had more funds to invest in RL, I would certainly hold this one.

14-May-2021:  Boda Porphyry Update from Nic Earner and Ian Chalmers from ALK

21-Jan-2021:  Ord Minnett: Alkane Resources: Ain’t she Boda-ful (initiation of coverage)

Analysts:

1. Dylan Kelly, Senior Research Analyst, 02 8216 6417, [email protected]
2. Jack Lynch, Research Associate, (02) 8216 6368, [email protected]

• Last Price: A$0.81 ($0.85 on 22-Jan-2021)
• Target Price: A$1.30
• Recommendation: Buy
• Risk: Higher
• Sector: Gold
• ASX Code: ALK
• 52 Week Range ($): 0.50 - 1.50
• Market Cap ($m): 479.3
• Shares Outstanding (m): 595.4
• Av Daily Turnover ($m): 2.2
• 3 Month Total Return (%): -40.6 (that's negative 40.6%)
• 12 Month Total Return (%): +17.5
• Benchmark 12 Month Return (%): 13.4
• NTA FY21E (¢ per share): 31.2
• Net Cash FY21E ($m): 27.3

--- click on the link at the top for the full OM report on ALK ---

[I do not hold ALK currently.  I have previously.  They remain on my Strawman.com scorecard (as one of my smaller positions) with a 50%+ gain, despite their SP falling by over 40% in the past 3 months.]

04-Nov-2020:  Updated Roswell Resource lifts by 50% to 660,000oz

• The Global Mineral Resource (Indicated and Inferred) for the Roswell Deposit has been updated after an additional 29,000 metres of drilling, and now stands at:

                           10.1 million tonnes grading 2.04g/t gold (660,000oz)

• Total contained ounces have increased 50% from the previously announced January 2020 Inferred Mineral Resource.
• The resource remains open for extensions at depth, with particular focus on the high-grade zones in southern Roswell, and to the west within the poorly constrained western monzodiorite.
• Drilling is continuing in the prospective corridor to the south of Roswell and an updated Mineral Resource for the San Antonio deposit is anticipated in December 2020.
• The resource definition drilling program at the Roswell and San Antonio prospects is ongoing as part of an extensive regional exploration program aimed at providing future additional ore feed, either at surface or underground, for Alkane’s operating Tomingley Gold Operations (TGO). The Roswell Deposit is located 3km south of the TGO mine and processing facility.
• An underground exploration drive from Tomingley Gold Operations to the Roswell Deposit is under development. Land acquisitions have taken place and planning is underway to facilitate rapid mine development on approval.

Alkane Resources Managing Director, Nic Earner, said:

“The Roswell Resource represents the most attractive zone of broad mineralisation identified so far in the Tomingley region. This deposit, together with San Antonio, and good reserve replacement at Tomingley underground, is showing a clear pathway to achieving a further 10+ year mine life for Tomingley.

Now that resource drilling is complete at Roswell, and nearing completion at San Antonio, consultation, permitting and licencing to facilitate mining is being expedited with the relevant stakeholders and NSW government departments.”

--- click on the link above for the full announcement ---

[I do not currently hold ALK shares, but they are on my Strawman.com scorecard.]

Also, recently:  28-Oct-2020:  Final Assays Received for Infill Resource Drilling Roswell

And:  21-Oct-2020:  Quarterly Activities Report

These links are from the announcements page on the Alkane Resources website - see here:  https://www.alkane.com.au/media-research/asx-announcements/

28-Aug-2020:  High Grade Depth Extensions Identified at Roswell

High Grade Depth Extensions Identified at Roswell Below Current Inferred Resource

Alkane Resources Managing Director, Nic Earner, said: “It is great to see these significant high-grade intercepts below the existing Inferred Resource at Roswell. These show the potential for an underground mine that continues to extend at depth, with impressive grades continuing.

“Our community, stakeholder and regulatory engagement on developing Roswell and San Antonio is well underway and will continue as rapidly as practicable. The next big step is updating the Inferred Resource at Roswell to Indicated, and we’re expecting to get this completed in October.

“The progress being made at Roswell and San Antonio further demonstrates our objective of creating shareholder value by extending the production mine life at Tomingley, in combination with strategic exploration and acquisition.”

--- click on the link above for the full announcement ---

[I hold ALK shares]. 

For some reason this has not uploaded yet to Commsec despite being added to the ASX announcements platform at 8:41am this morning.  It is available on NABtrade, and on the ASX site however, and I guess Commsec will add it some time over the weekend.

These are not bonanza grades but they're still good grades of gold and importantly they've been found below the existing Inferred Resource at Roswell, so it will extend the Inferred Resource (they expect to complete this update in October) - meaning that they will have significantly more gold to mine there.  This is an example of where the results actually DO match the hype, the potential, and the expectations.  We expect them to keep finding more gold, and they actually do.  It doesn't always work out this way, but it's good when it does.

25-Aug-2020:  Annual Financial Results, App 4E and FY20 Statutory Accounts

Headline numbers look poor from their TGO (Tomingley Gold Operation) - with everything down except the gold price.  However, the investment thesis for ALK is all about their new Boda discovery which is the subject of an extensive drilling campaign throughout CY2020 - so we still don't know exactly how much gold they have there.  They have other tenements that contain potential commercial deposits of gold as well.

The Tomingley plant was shut down for an extended maintenance period from late December (2019) through to February (2020), which impacted production.  They have also transitioned from an OP (open pit) operation to a UG (underground) operation there, with low-grade stockpiled ore processed in the first half while underground mining development continued to progress.  Those are the main reasons why they produced less gold in FY20 than in FY19.

ALK's NTA has increased from 21.73 to 26.28 cps during FY20.  At 30-June-2020, ALK's cash+bullion+listed investments totalled $98.4m with $18.5m of that transferred to ASM when they demerged and listed in late July.

I hold ALK shares, but it's a pretty small position, as they are a small gold producer with plenty of upside, but also plenty of associated risk.  One of my main risk-management tools is appropriate position sizing, meaning that low risk companies can be larger positions, and high risk companies need to be smaller positions within my potfolios.

ALK are cashed up, so that's not a big risk, and they are producing gold profitably - with FY21 production guidance of 45 - 50 koz at an AISC of A$1,450 to $1,600/oz.  The mid-point of their AISC guidance is $1,525/oz, placing them at position #15 within my list of the 25 gold producing companies - in order of AISC - from lowest to highest, meaning that based on current guidance, ALK will have the 15th lowest costs of the 25 current Australian-headquartered pure-play gold producers we have on the ASX to choose from.

The main risk is that they don't live up to the hype - or the promise - that they don't find as much gold as the market expects during their current and future drilling programs.  That's where the main risk lies in my opinion.  And that's why they remain a relatively small position for me at this point.

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.