Alkane celebrates a gold anniversary and shares the wealth with a +258% return for investors
This year Alkane Resources Limited (ASX: ALK | OTCQX: ANLKY) celebrated 50 years of business. It’s appropriate that 50 years is celebrated as a ‘Golden Anniversary’ as the Company’s focus is gold production, exploration and partnerships. And what a golden year it has been with the stock price up 258% year to date, having risen from A$0.17 to A$0.61 so far in 2019. Alkane Resources shareholders are certainly celebrating 2019, thanks in part to record high Australian dollar gold prices (currently A$2,146/oz).
Alkane Resources’s other focus, rare earths, also had a good year, suggesting 2020 could also be a great year as the US takes a stronger interest in Australian rare earth projects.
Alkane Resources corporate history timeline
Alkane Resources gold operations at Tomingley, NSW, Australia
In 2019, the Tomingley Gold Mine operations have transitioned towards underground mining away from open pit mining with just under 3,000 mt of lateral development completed, which includes 1,000 mt on the decline. The underground development is progressing a little bit ahead of schedule and budget mainly because of a new underground development team performing exceptionally well.
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Alkane Resources is searching for more nearby gold ounces to feed their Tomingley Mill
With a view to define additional ore resources for the Tomingley Mill, Alkane is also ramping up nearby regional gold activity. This year Alkane identified an exploration gold corridor between Tomingley and Peak Hill in New South Wales. The three prospects of San Antonio, Roswell and El Paso received encouraging results suggesting real potential for mine development in the area.
At Alkane Resources’ recent AGM, Chairman Ian Gandel stated: “We have centered our gold activities around one of Alkane’s key assets, the gold mine and processing facility at Tomingley. Many of our activities have centered around extending the production life of our gold mill.”
The San Antonio and Roswell prospects
A 60,000-metre resource definition drilling program on the San Antonio and Roswell prospects is in progress. Drilling is being undertaken to define an initial Inferred Resource at both prospects to a minimum 200 metre vertical depth. Phase one of Roswell drilling has been completed with samples now being prepared and assayed to form part of an initial resource that is expected to be released in early December. San Antonio drilling is continuing.
The Boda Project
Alkane is also continuing gold exploration more broadly at the Northern Molong Porphyry Prospect, 35 km east of Dubbo. Significant porphyry style gold-copper has been discovered at the Boda project. A single diamond drill hole was drilled to test the depth extent of gold mineralisation identified and returned a broad intercept of 502 m @ 0.48 g/t gold, 0.20% copper from 211 m. Alkane will now embark upon a drilling program of five diamond cores to test mineralization.
Alkane is also looking to enhance its gold strategy by investing in advanced junior gold mines with potential that Alkane can contribute additional capital, expertise and operational capability.
The Dubbo Project (rare earths)
Alkane has continued to develop its rare earths Dubbo Project in NSW, Australia. Key rare earths at the Project include zirconium, niobium, and hafnium. Estimated NPV is A$1,236 million over an initial 20 year mine life, with potential to expand to a 75+ year mine life. The Project is permitted and construction ready, pending finance.
Alkane Resources rare earths Dubbo Project revenue to be driven by zirconium, niobium, and hafnium
Investment in Zirconium Technology Corporation
In a notable development in the past year, Alkane made a significant investment in Zirconium Technology Corporation of South Korea. The Company will fund the final stages of research and feasibility of a new metallisation technology which is more environmentally sustainable and cost effective than conventional processes. This potentially represents the best process route for materials at the Dubbo Project into highly marketable high purity metals. Alkane is also looking at leveraging this technology with the Company’s own proprietary oxide separation technology for commercial scale.
It certainly has been a big year for gold, and also for Alkane Resources celebrating its 50th anniversary. With a 2019 YTD stock price return of 258% investors can feel very happy with the way things are going.
Looking towards 2020 strong interest and co-operation from the US towards Australian rare earth projects bodes well for Alkane Resources’ Dubbo Project achieving funding. With some gold exploration success, solid gold production, and if gold prices hold, 2020 should be another solid year for Alkane Resources.
Alkane Resources is based in Burswood Western Australia; and has a market cap of AU$ 308 million. Investors can read my January 2019 article discussing Alkane Resources on InvestorIntel here.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment, and a Graduate Diploma in Financial Planning. He ... <Read more about Matthew Bohlsen>