Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) sold 16,576 ounces of gold from the Tomingley Gold Operations (TGO) in Australia for revenue of A$59.4 million at an average price of A$3,582 per ounce during the three months to a December 31, 2024, in what was described by managing director Nic Earner as “a significant quarter” including the commissioning of two new circuits.
A new flotation and fine grind circuit was commissioned at the operations near Dubbo in Central West New South Wales resulting in recoveries during December averaging 87.3%, which was about 5% above the recovery that would have been achieved without the circuit in place.
Average recoveries for the quarter were 84.2% and the new circuit continues to be optimised with Alkane confident of increased recoveries in the future.
New paste plant
Also, at the Tomingley Gold Extension Project (TGEP) to the south of the TGO, commissioning of the new paste plant continues, with the first paste delivered underground early in January 2025.
Paste plant in operation.
Commissioning of these two projects finishes the current phase of capital growth, with expenditure now largely complete. Significant investments totalling $10.8 million were made during the quarter in the Tomingley expansion.
“The flotation and fine grind circuit has already started to improve gold recovery, and the paste plant has delivered its first fill underground early in January 2025,” Earner said.
“The expenditure in the current phase of the Tomingley expansion is now largely complete.
Newell Highway diversion
“Our attention is on optimising and leveraging the value from these two projects and early work with the contractor and regulator on the Newell Highway diversion,” he added.
The Newell Highway road diversion contractor submitted their environmental and construction management plans to the regulator during the quarter.
Quarterly production
Gold production of 14,852 ounces was below forecast for the quarter, offset by the gold-in-circuit (GIC) which increased by ~1,700 ounces, with elution stripping of GIC in the elution circuit reduced over the Christmas period.
The main ore source continues to be from the Roswell underground deposit and while poured gold was below forecast, this was timing-related as GIC increased considerably.
Operating cash costs at the side were A$2,015/ounce and the AISC was A$3,053/ounce. Site operating cash flow was A$19.3 million for the quarter.
The FY2025 guidance for Tomingley of 70,000 to 80,000 ounces of production at an AISC of A$2,400 to $2,600 per ounce remains unchanged. The AISC guidance reflects a one-off cost for decline development that is accounted as sustaining capital and included in the AISC.
Ongoing exploration
Regional exploration around Tomingley has yielded several prospective mineralised targets that will be tested throughout 2025.
Initial testing of targets under the existing San Antonio resource commenced, and results are expected to be received during the current March 2025 quarter.
Extensive aircore drilling is progressing, testing the eastern volcanic sequence.
Exploration drilling at Boda-Kaiser of the Northern Molong Porphyry Project to the northeast of TGO began during the December quarter and results from South Boda are expected in the current quarter.
Drilling at Boda, Driell Creek and other targets will recommence once the drill crew returns to the site following the Christmas and New Year break.
Well-positioned
At the end of the quarter, Alkane held cash, bullion and listed investments totalling A$42.4 million. Total (EPA:TTEF) liquidity was $57.4 million at December 31 including the A$15 million undrawn portion of the $60 million project finance facility with Macquarie Bank to develop the TGEP.
Alkane continues to hold shares in Medallion Metals, with ownership of around 4.9% of their shares on issue and also holds about 9 million shares in Sky Metals.