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Corporate Spotlight

Alkane Resources Ltd is a gold production company with a multi-commodity exploration and development portfolio. Alkane’s projects are predominantly in the Central West region of NSW, but extend throughout Australia.
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Interview with Nic Earner, Alkane Resources

DRILLING UPDATE

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Roswell and San Antonio Resource Definition Drilling Update 

ASX Announcement 12 August 2019


  • The 60,000 metre resource definition drilling program on the San Antonio and Roswell prospects began in mid-June. Assay results have been received for the initial 5,000 metres. 
  • Significant intercepts from the San Antonio prospect include: 

    • RWRC075 36 metres grading 5.09g/t Au from 30 metres; 
    • incl 12 metres grading 9.02g/t Au from 51 metres. 

    • RWRC078 15 metres grading 1.66g/t Au from 30 metres; 
    • and 39 metres grading 3.59g/t Au from 75 metres; 
    • incl 3 metres grading 10.7g/t Au from 84 metres. 

    • RWD004 12 metres grading 2.12g/t Au from 164 metres; 
    • incl 2 metres grading 7.65g/t Au from 173 metres; 
    • and 9.7 metres grading 8.01g/t Au from 215.3 metres; 
    • incl 2 metres grading 23.2g/t Au from 219 metres.

  • The San Antonio prospect remains open to the south with significant gold intercepts from the southernmost RC drilling traverse that include:

    • RWRC077 24 metres grading 0.99g/t Au from 51 metres; 
    • and 18 metres grading 3.16g/t Au from 81 metres; 
    • incl 3 metres grading 7.21g/t Au from 96 metres.

  • This resource definition drilling is part of an extensive regional exploration program focused on the immediate mine area to the south of Tomingley with the aim of providing additional ore feed, either at surface or underground, in the future to Tomingley Gold Operations (TGO).


Tomingley Gold Project 

Alkane Resources Ltd 100% 


The Tomingley Gold Project (TGP) covers an area of approximately 440km2 stretching 60km 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 currently operating Tomingley Gold Operations (TGO), an open pit mine with a 1Mtpa processing facility that is transitioning to underground through 2019. 


Over the last year 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 TGO. The program has yielded broad, shallow high grade intercepts that demonstrate potential for material project life extension and show that a return to open pit mining and / or underground extension is possible with appropriate resource confirmation, landholder agreement and regulatory approvals.


San Antonio - Roswell Prospect Resource Definition Drilling 

Significant broad high grade results were reported from the completion of a 17,519 metre RC and diamond core drilling program for the Roswell, and San Antonio prospects (ASX announcements 1 February 2019, 29 March 2019 and 12 June 2019) 3km to 4km south of TGO as well as the El Paso prospect (ASX announcement 17 May 2019). A conceptual Exploration Target was subsequently reported (ASX announcement 9 July 2019). 


A 60,000 metre resource definition drilling program was initiated in June 2019 at the Roswell and San Antonio prospects.


The drilling is being undertaken: 

  • to seek to define an initial inferred resource at the Roswell and San Antonio prospects with a nominal 40 metre by 40 metre drill hole spacing to a 200 metre vertical depth; 
  • is part of a 60,000 metre drilling program comprising approximately 10,000 metres of diamond core drilling and 50,000 metres of RC drilling.


For the drilling being reported: 

  • assay results were received for the initial 5,000 metres targeting the San Antonio prospect; 
  • 3 metre composite samples were assayed. Assaying of 1 metre re-split samples is underway; 
  • the drilling comprised 25 RC holes (4,358m) and 1 diamond core drill hole (351.6m), focused on the San Antonio prospect as well as its southern extensions; and 
  • representative section N6390240 (RWRC044, 045, 073 and RWD004) is appended.


The San Antonio prospect remains open to the south with significant gold intercepts from the southernmost RC drilling traverse (see section N6389560 – RWRC043, 050, 077 and 079 appended)


Click here to view the full announcement

STRATEGIC INVESTMENT

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Strategic Investment in Genesis Minerals

ASX Announcement 2 August 2019 


Alkane Resources Limited (ASX: ALK) (“Alkane”) has executed a subscription agreement and an underwriting agreement (together, "the Agreements") with Genesis Minerals (ASX:GMD) (“Genesis”) that will see Alkane invest up to $6m in Genesis by subscribing for shares under an initial placement, participating in and underwriting an entitlement offer (announced by Genesis to ASX today), and potentially by subscribing for additional shares in a secondary placement (conditional on Genesis shareholder approval) (together, the "Investment").


The Investment is consistent with Alkane’s strategic objective to grow its gold business, both organically through its Tomingley gold operations in NSW, and through investment in junior Australian gold companies with projects that meet Alkane’s investment criteria.


Alkane’s Managing Director, Nic Earner, said, “Alkane has maintained a small stake in Genesis since 2018, and we have followed the recent progress of its flagship Ulysses Gold Project in particular. We welcome the opportunity to expand our investment to become a supportive strategic shareholder.”


Following the completion of the Investment, Alkane will become the largest shareholder in Genesis


Genesis’ Ulysses Gold Project, located close to existing mining infrastructure 30km south of Leonora, has existing JORC Mineral Resources (per Genesis ASX Announcement dated 9 October 2018) of 7.1Mt at 3.3g/t for 760,000 ounces of contained gold, with a high grade underground portion of this resource of 4.1MT at 4.7g/t for 628,000 ounces at a 2g/t cut off grade.


Genesis’ other major exploration project interest is in the Barimaia Gold Project, located close to Mount Magnet in WA’s Murchison district.


Investment structure and summary of terms 

The aggregate $6m Investment is structured as follows:


  • Initial Placement: Alkane will invest approximately $1.42m, by subscribing for approximately 44.33m shares in Genesis at $0.032 per share, being the maximum amount remaining under Genesis’ placement capacity under ASX Listing Rule 7.1. Immediately following the Initial Placement, Alkane's interest in Genesis will be 5.82%.
  • Entitlement Offer: As announced today, Genesis will make a 1 for 6 non-renounceable entitlement offer at $0.032 per share (refer to Genesis's ASX announcement of today for further details). Alkane has committed to take up all of its entitlements under the offer (an investment of approximately $0.35m) and, subject to certain terms and conditions, to partially underwrite the offer (up to a maximum underwriting commitment of approximately $4.3m). Under the offer, Alkane will be allocated any shortfall (that is, shares for which Genesis shareholders who do not elect to take up their rights) up to the maximum underwriting commitment of approximately $4.3m, and Genesis will have the right (at its discretion) to allocate any further shortfall to other Genesis shareholders. 
  • Secondary Placement: If through the Initial Placement and Alkane's participation and underwriting of the Entitlement Offer, Alkane has not invested the full $6m and Alkane’s shareholding remains under 15%, then Genesis will place new shares to Alkane under a further placement at $0.032 per share to increase Alkane’s interest in the expanded Genesis to a maximum of 15% (and subject to the maximum overall investment of $6m). The secondary placement will be subject to Genesis shareholder approval, which the Agreements require Genesis to seek. 
  • Collaboration: Alkane and Genesis will form a Technical Committee to collaborate on the ongoing exploration and feasibility work in relation to all Genesis projects. This will ensure that Genesis’ strong exploration team will be bolstered by Alkane’s exploration team, as well as Alkane’s experience as a project developer and operator in the Australian gold sector 
  • Board representation: Subject to certain conditions, Alkane will have the right to appoint a Director to the Genesis board, and have anti-dilution rights to participate in future equity raisings (subject to Genesis obtaining the requisite ASX waiver).


Click here to view the full announcement

DRILLING AT PEAK HILL

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Gold Mineralisation Drilling at Peak Hill

ASX Announcement 29 July 2019 


  • Significant gold mineralisation consistent with the existing Peak Hill Gold Mine (PHGM) Mineral Resource has been confirmed by a large diameter core diamond drilling program. 
  • The PHGM is located 15km south of Alkane’s operating Tomingley Gold Operations (TGO) processing facility, was operated by Alkane from 1996 to 2005 as an open cut heap leach and is now substantially rehabilitated. PHGM remains an active Mining Lease. 
  • The ten hole program was completed to provide mineralised samples from within the Proprietary deposit for metallurgical test work. 
  • Significant intercepts include: 


PRD022 110 metres grading 1.97g/t Au from 197 metres; 

incl 30 metres grading 4.30g/t Au from 276 metres; 

also 16 metres grading 6.51/t Au from 281 metres. 


PRD023 102 metres grading 1.78g/t Au from 182 metres; 

incl 45 metres grading 3.18g/t Au from 215 metres; 

and 8 metres grading 8.28g/t Au from 228 metres; 

also 6 metres grading 4.06g/t Au from 251 metres. 


  • Unlike the prospects between TGO and PHGM the Proprietary deposit is moderately refractory in nature at depth. The metallurgical test work is designed to test modern gold recovery techniques on the samples with a view to understanding the opportunity for future underground development at PHGM.


Peak Hill Gold Mine 

Alkane Resources Ltd 100% 


The Peak Hill Gold Mine (PHGM) is located on an active Mining Lease about 60km southwest of Dubbo in the Central West of NSW, and 15km south of Alkane’s operating Tomingley gold mine (TGO). PHGM was a fully operational open pit gold mine operated by Alkane that is currently under care and maintenance with most site rehabilitation completed away from the existing open cuts. There are four pits, the main Proprietary-Parkers Pit and three satellite pits, Bobby Burns, Crown and Great Eastern.


Geology 

The Peak Hill deposit is interpreted as a high sulphidation epithermal system probably related to a deeper porphyry magmatic source. This style of deposit is well documented globally, although usually preserved in younger geological terrains other than the older Ordovician volcano-magmatic provinces in NSW.


The deposit is hosted by strongly deformed and hydrothermally altered Ordovician aged volcaniclastic rocks which are predominantly andesitic volcaniclastic breccias, lesser sandstone/siltstone units, minor lava and black mudstones, similar to the sequence at Tomingley. 


The alteration zone, or lithocap, is evident over a 3km long by 500m width north-south trending zone that appears to be focused on coarser grained permeable breccia and volcaniclastic rocks, with later superimposed structural zones.


Within the broad lithocap envelope, an elliptical core zone 500m by 400m, of advanced argillic alteration is evidenced by extensive pyrophyllite and paragonite with residual silica-pyrite mineralised zones. High pyrite concentrations, with the copper sulphide assemblage dominated by enargite, tennantite and luzonite, are often focused within late, higher grade structures within the residual silica-pyrite zones.


Oxidation has extended to >90m. The redox boundary between oxidised and unoxidised rock is irregular due to poddy nature of the primary sulphide interface extending into the overlying oxidised material.


Click here to view the full announcement

SUBSTANTIAL UPGRADE OF EXPLORATION TARGET

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Alkane Resources Defines a Significant Exploration Target


  • The management team at Alkane Resources has announced its latest achievement at its Tomingley project – a significant upgrade of the Exploration Target up to 23.8 million tonnes of gold;

  • The upgraded Exploration Target confirms the significant potential for an extension on Tomingley’s mine life and a possible return to open pit mining;

  • Resource definition drilling of the target has just commenced;


Alkane Resources has just announced the upgraded Exploration Target of approximately 15.8 up to 23.8 million tonnes at a grade ranging between 1.7 to 2.2 g/t gold at its Tomingley Gold Project in NSW.


The target consists of three primary prospects: Roswell, San Antonio and El Paso which have over 2500 metres of combined strike length.

It lies 8 kilometres of the existing Tomingley Gold Operations (TGO), a 1 million tonne per annum processing facility and underground mine. The close proximity between the Exploration Target and facility has the potential to significantly reduce transportation costs and optimise production.

“This Exploration Target is in close proximity to our existing processing operation and underground mine and could potentially be converted into both increased mine life and increased production,” Managing Director, Nic Earner said.


The most recent exploration consisted of 76 holes for 16,376 metres of reverse circulation drilling and three holes for 1,143 metres of core drilling. Alkane’s next step is to undertake a drilling program to test the target. This is expected to take approximately 12 months.  

Tomingley covers a vast area of approximately 440 square kilometres. Last year, Alkane conducted an extensive regional exploration program to define additional resources. These resources have the potential to extend the base of either open pit or underground mining.

So far, the exploration program has delivered broad, shallow, high-grade intercepts. This confirms the potential for a longer mine life and further open pit mining.

Mineralisation at Roswell was defined by RC and diamond core drilling over a strike length of 800 metres and it remains open in the north and south.

The San Antonio prospect is located south of Roswell and is separated by the Rosewood Fault. High-grade mineralisation was defined by RC and diamond core drilling over a strike length of 1000 metres that is open along strike and down dip.


El Paso is located south of San Antonio with mineralisation identified over a 1000 metre strike length and defined by RC and diamond core drilling. The drilling identified gold mineralisation dominantly hosted within a feldspar (a group of minerals) andesite.

Resource definition drilling of the target has commenced, and consultation is underway with relevant landholders and regulatory bodies. This is expected to include over 60,000 metres of mainly RC drilling. Data collection has also begun for some of the environmental studies that are required for the mining approvals.

Alkane trusts these works will highlight the open cut and underground options for the Tomingley project in case an adequate mineral resource is defined.

On speaking about the worth of the project to its shareholders, MD Nic Earner says the size and positioning of the Tomingley project is most encouraging and expects big things for the project. 


“Given the potential size and grade of San Antonio alone, Alkane has already commenced the resource definition drilling of this Exploration Target in order to minimise the potential development timetable,” he said.

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