new iron age may fund gold mine

article below related to BCI. Interesting to read that ALK are looking to sell off their holdings in the future to fund their gold mine. We knew this could be a strong possibility. We know this will happen..its just a question of when it will happen.


New ‘iron age’ may fund gold mine


BY KIM BARTLEY
27/05/2008 8:46:00 AM

A firm foothold in a promising iron ore venture in Western Australia could fund the establishment of a proposed gold mine at Tomingley.

Alkane Resources, the multi-commodity explorer and miner with a growing profile and workload in central west NSW, could make megabucks from its stake in a relatively new company looking to tap into the new “Iron Age” driven by Asian demand for iron ore.

Yesterday, Alkane’s managing director Ian Chalmers said its nine million shares in BC Iron Limited, representing a 15 per cent holding, was currently worth about $14 million.

But, he said, there was potential for a jump in the share price as BC Iron moved towards production in the world-class Pilbara iron ore province.

“They’re not yet mining ... but they are confident they will,” Mr Chalmers said.

“In a years time we could have the $40 million we need for the mine at Tomingley.”

BC Iron was created a couple of years ago from the “iron ore interests” of Alkane along with Consolidated Minerals Limited. Both Alkane and Consolidated Minerals are major shareholders in BC Iron, which has a 100 per cent interest in the Nullagine Iron Ore Project, an extensive tenement portfolio strategically located north-east of Fortescue Metals’ Cloudbreak operation.

Fortescue calls itself the “new force in iron ore” and has begun exporting iron ore to the world after completing construction of port and rail infrastructure.

BC Iron has entered into a memorandum of understanding with Fortescue to provide bulk transport and shipping from Port Hedland.

The Nullagine project is listed on Alkane’s official 2008 program, as presented to its annual meeting in Perth earlier this month.

However, the company is not actively involved in the venture, and remains focused on its many projects in central west NSW with the Tomingley Gold Project and Dubbo Zirconia Project its top priorities.

Mr Chalmers said the Tomingley Gold Project feasibility study should be completed early in 2009.

Alkane hopes to be able to begin development of the mine in mid-2009 with production under way by early 2010.

Progress in the Dubbo Zirconia Project hinges on the current operation of a demonstration pilot plant using rock from a huge resource at Toongi. Its feasibility study is scheduled for completion mid-2009.

The company’s 2008 program also includes continued exploration, in partnership with the world’s largest gold producer Newmont, of McPhillamys prospect and adjoining targets in the Moorilda Project.

Despite a “pretty busy” schedule, Mr Chalmers said Alkane would keep pursuing other potential copper and gold ventures near Wellington and Cudal.

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