EDITOR: | December 8th, 2016

Analyst upgrades Alkane to “Buy” with DZP project milestones on track

| December 08, 2016 | No Comments
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Shares of Alkane Resources Limited (ASX: ALK | OTCQX: ANLKY) climbed 6.8% yesterday in response to an analyst report by Petra Capital, which released a target price of A$0.61 from the current A$0.33.

Alkane Resources Ltd is an ASX and OTCQX (US) listed multi-commodity mining and exploration company with a focus on gold, copper, zirconium, hafnium, niobium and rare earth elements.

Alkane reported profits of A$6.7 M from total income of A$109.6 M in FY2016 (Year end June 30). The revenues are generated from its Tomingley Gold Operations, which yielded 67,812 ounces. The gold operations at Tomingley are based on a 579,000 ounce gold resource approximately 50 kilometres south-west of Dubbo in Central West NSW. Operated by Tomingley Gold Operations Pty Ltd (TGO), a wholly owned subsidiary of Alkane, Tomingley gold mine was commissioned in January 2014 and officially opened in March of that same year.

The share price performance experienced this year to data has been underpinned by the delivery of key development milestones for its Dubbo Zirconia Project (DZP).

Petra Capital sees binding offtake agreements related to the DZP project as the key product streams as near term determinants of Alkane’s success and upgrade in Alkane’s price target.

On December 1, Alkane reported shipping high purity samples of zirconia and hafnia (hafnium oxide) to several key potential customers. The provision of samples from the August – September Demonstration Pilot Plant operation has been a condition precedent to further discussions with these customers for the purchase of AZL’s future products.

This is key milestone in the company’s development.

Of particular interest are the ongoing investigations and market contacts which have confirmed the Company’s view that the market for hafnium materials has substantial growth opportunities, reinforcing the potential for the DZP to be a major supplier over many years (not related to the production of nuclear grade zirconium metal).

In October Alkane reported on a non-binding three-year memorandum of understanding (MOU) with multinational engineering Siemens.

The MOU details Alkane’s and Siemens’ joint intention to enter into separate agreements for the purpose of negotiating offtake agreements for DZP product (e.g., rare earth products, specifically those related to the production of permanent magnets, as well as the rare metals niobium, zirconium, and hafnium in oxide, alloy or finished forms. As well Alkane will investigate Siemens’ technologies for advanced infrastructure management systems, manufacturing process automation, power solutions, mechanical plant and services and product lifecycle management, making Siemens and excellent partner for Alkane.

Of particular interest are the ongoing investigations and market contacts which have confirmed the Company’s view that the market for hafnium materials has substantial growth opportunities, reinforcing the potential for the DZP to be a major supplier over many years (not related to the production of nuclear grade zirconium metal).

Petra Capital is an independently owned, boutique, Australian institutional stockbroking firm, which provides specialized services to institutional clients and to mining and industrial companies.


Dr. Luc Duchesne

Editor:

Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>


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