ALK - Alkane Resources

[mullokintyre]

Quarterly out, soldid but not spectacular, the drilling is interesting on Boda, with the updated MRE still on schedule for this quarter.
Like all the other gold producers in OZ, AISC is high, but hey, they are making money, and the bank balance is going in the right direction.
Might be worth a punt adding to this one with some expectation that the MRE will give it a boost.
Mick

 

[Sean K]

Quarterly out, soldid but not spectacular, the drilling is interesting on Boda, with the updated MRE still on schedule for this quarter.
Like all the other gold producers in OZ, AISC is high, but hey, they are making money, and the bank balance is going in the right direction.
Might be worth a punt adding to this one with some expectation that the MRE will give it a boost.
Mick
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Just cruising along I think with the longer term goal of making Boda-Kaisar look like a Cadia East. Once they pass the 20Moz mark (maybe in the next MRE) with a lot of copper included it might be re-rated. Maybe they need another load to be discovered along strike before it looks like a 30Moz project. Then it's definitely worth the capex.

 

[mullokintyre]

Ok so BODA RE out, makes nice reading.
And there is more to come with further drilling to increase boundaries not yet defined.
Given the overnight big jump on gold prices, More than happy with my purchase.
Mick

 

[mullokintyre]

ALK quarterly for December out.
On target to achieve the gold given in guidance.
AISC is still high at $2200.
Lucky gold is holding above 3k an ounce.
The September quarter had cash and bullion at 93mill
At the end of December despite selling 42.5 mill of gold, cash and bullion at the end of the quarter was down to 74 mill.
so thats a gross outflow of 61 mill.
15.7 mill spent at the Tomingly expansion, another 5 mill in exploration, tax of 6 mill paid.
So what happened to the other 32 mill?
Mining expenses and admin seem to be going through the roof.
Might need to spend a bit of time poring over the annuals this year, assuming I hold on.
Mick

 

[Sean K]

ALK quarterly for December out.
On target to achieve the gold given in guidance.
AISC is still high at $2200.
Lucky gold is holding above 3k an ounce.
The September quarter had cash and bullion at 93mill
At the end of December despite selling 42.5 mill of gold, cash and bullion at the end of the quarter was down to 74 mill.
so thats a gross outflow of 61 mill.
15.7 mill spent at the Tomingly expansion, another 5 mill in exploration, tax of 6 mill paid.
So what happened to the other 32 mill?
Mining expenses and admin seem to be going through the roof.
Might need to spend a bit of time poring over the annuals this year, assuming I hold on.
Mick

Not sure why they're not putting more resources into extension and infill at Boda/Kaiser. It looks like it will be a mine but dedicating just two rigs to it looks like they don't think it's going to cross the line. Should be approaching a total of 15Moz AuEq at the next Kaiser MRE. Maybe being a porphyry doesn't excite anyone.

 

[mullokintyre]

Not sure why they're not putting more resources into extension and infill at Boda/Kaiser. It looks like it will be a mine but dedicating just two rigs to it looks like they don't think it's going to cross the line. Should be approaching a total of 15Moz AuEq at the next Kaiser MRE. Maybe being a porphyry doesn't excite anyone.

Every time I see that word Porphyry, I have images from my youth of of plying young ladies with cheap Lindemans porphyry pearl fake champagne.
Mick

 

[mullokintyre]

Not sure why they're not putting more resources into extension and infill at Boda/Kaiser. It looks like it will be a mine but dedicating just two rigs to it looks like they don't think it's going to cross the line. Should be approaching a total of 15Moz AuEq at the next Kaiser MRE. Maybe being a porphyry doesn't excite anyone.

The expansion of the Tomingly plant is the major CAPEX driver, but the market has marked it down and hit a 52 week low today.
Normally a 52 week low pricks my ears a bit and starts the buying juices to flow.
But if it is hitting a 52 week low in a time when gold is still above 3,000 an ounce in AUD terms, what thell is the catalyst that is going to increase the SP?
Mick

 

[Sean K]

Wow, some good grades here. Much much better than the rest of the deposit. One of the key things players look for in a porphyry is a high grade core to mine first which puts money in the bank to dig up the low grade stuff.

They still need 15-20m ounces here for a decent mine.

 

[mullokintyre]

latest half yearly out.
FDoes not really fill me (or Ms Market) with joy.
One of the more startling figures was the increase in AISC from $1256 in Dec 2022 to $2177 in 2023.
$900 bucks in a year when the price achieved for gold increased by less than $400.
Another increase like that this yerar and they will be going backwards.
And the AISC is still going up as entrenched inflation is still there.
The increase in MRE at BODA may not be enough to help it if AISC keeps going up at this rate.
Will not be adding to ALK, and may even depart fom the register.
Mick

 

[Sean K]

latest half yearly out.
FDoes not really fill me (or Ms Market) with joy.
One of the more startling figures was the increase in AISC from $1256 in Dec 2022 to $2177 in 2023.
$900 bucks in a year when the price achieved for gold increased by less than $400.
Another increase like that this yerar and they will be going backwards.
And the AISC is still going up as entrenched inflation is still there.
The increase in MRE at BODA may not be enough to help it if AISC keeps going up at this rate.
Will not be adding to ALK, and may even depart fom the register.
Mick

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Yikes, that AISC jump is huge. Hard to believe that's just inflation.

 

[mullokintyre]

Out of ALK with a loss.
Can't see what is going to give this a kick along in the short term.
Can't win em all.
Mick

 

[mullokintyre]

Bought back into alk today, purely on the strngth of the gold price , as well the 19% stake that FMG have taken in MAG, which has tenements surrounding ALK 's Kaiser and Boda deposits.
FMG might buy the lot.
Mick

 

[mullokintyre]

ALK had some nice drilling results out today.
Hopefully there is more to come.
Mick

 

[Sean K]

ALK had some nice drilling results out today.
Hopefully there is more to come.
Mick
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Some unusually high grades in there for this deposit. Next MRE update will be interesting. Hard to guess how much more will be added.

 

[mullokintyre]

Latest quarterly not encouraging.
Gold production below forecast at higher AISC.
May bail at a small profit.
mick

 

[Sean K]

This is getting towards a critical mass but might need to crack the 20Moz mark to get there at this grade. Not sure how much of this will fit into a mining plan. Will have to wait for the SS in Q2 I guess.

Cadia is about this grade but 4 x as big.

 

[mullokintyre]

ALK taken a bit of a battering of recent days.
Not sure why, they should be getting some cash flow over this quarter with gold fetching above 2300 for the quarter, with a some sales in the 2400 mark.
Perhaps the punters don't think that management can get the Tomingly expansion finished om budget and time next year.
Have added some more this morning.
Mick

 

[Dona Ferentes]

ALK taken a bit of a battering of recent days. Not sure why, they should be getting some cash flow over this quarter with gold fetching above 2300 for the quarter, with a some sales in the 2400 mark. Perhaps the punters don't think that management can get the Tomingly expansion finished om budget and time next year.

An over view/ summary of activity

Alkane Resources unveils ambitious five-year plan​

By Glenn Dyer |

Two weeks after issuing a downgrade, Alkane Resources (ASX:ALK) has followed through on a promise to release a new five-year development plan for its Tomingley gold mine in the central west of NSW, where it is also in the process of unearthing a series of massive copper ore bodies.

Earlier this month, Alkane produced a downgrade of its 2023-24 gold production and cost estimates for the Tomingley mine. Alkane blamed the ramp-up of its Rosewell underground expansion not being "sufficiently rapid to allow the original guidance to be met.” The company revealed that full-year gold production from the mine in the central west of NSW would be in the range of 55,000 to 58,000 ounces, down from the previous range of 60,000 to 65,000.

However, it also promised a new five-year plan for the mine by the end of June, and that emerged on Monday with the confident assertion that Alkane plans to increase Tomingley’s production to above 100,000 ounces of gold per year while also expanding the site’s plant to a nominal 1.5 million tonnes per annum.

Alkane has to make a final investment decision in early 2025 but is confident it can produce between 485,000 and 505,000 ounces of gold from Tomingley over the next five years. “The underground at Roswell has begun production, and we expect to produce over 70,000 ounces of gold next year,” Alkane CEO Nic Earner said in Monday’s statement. “The paste plant and the flotation/regrind circuit are under construction with commissioning expected later this year.

Earner said earlier this year : The firing of the first production stope at Roswell is a major milestone for Tomingley that we have been working towards since drilling our first exploration hole there in 2018,” . “Not only does Roswell have higher-grade stopes, but it is open at depth and along strike.”

Tomingley’s five-year plan also involves the relocation of the Newell Highway, a project expected to cost Alkane $89 million for the highway job and expansion, as well as $43 million in planned spending. “The deposits across Tomingley are open at depth and along strike, and our known resources extend beyond this immediate five-year plan,” Earner said. “We’re looking forward to delivering on this plan.”

Last week, Alkane revealed several interesting gold/copper intersections from its North Molong prospects that suggest a new area of interest at Driell Creek and more resources (at depth) around its Boda prospects, which are south of the huge Kaiser prospect.

In a statement to the ASX on 21 June, CEO Earner said, “This program of drilling has confirmed the potential to find further deposits similar to Boda and Kaiser across the Northern Molong Porphyry tenement package.
“Driell Creek has delivered some encouraging results from this round of drilling. Driell Creek is emerging as our next priority area for follow-up drilling. Early-stage target generation work will continue at several other prospects.

“Alkane is very close to finalising the scoping study for the Boda-Kaiser deposits at the NMPP. Any regional discoveries carry the potential to upgrade the project’s long-term economic outcomes."

.
over the past few years, any rallies have been taken out and holders must be wondering if it will turn around

 

[mullokintyre]

Production figures out and seems to have hit at the middle of the revised(downwards) production report.
Increase in Cash and bullion of around 10 million from 45 to55mil , which on the surface is good.
However, during the quarter they drew down $42.8mill from the Macquarie loan facility
So the co went backwards in a big way in terms of cash.
Forecast production is a good bit higher for next year.
They are going to need every bit of that to keep the money flowing in.
Don.t think the annual report will make great reading at that rate.
Not likely to pursue this one for a while.
Mick

 

[Dona Ferentes]

and here it is.... some 48 pp
.
ALK is pleased to announce its Scoping Study for the Boda-Kaiser Project.

The Boda-Kaiser Project is a large gold-copper porphyry system in Central West NSW with potential for a long-term bulk-tonnage mining and processing operation. To understand the project economics and potential economies of scale from different-sized operations, and identify a potential pathway to development, Alkane has evaluated three possible scenarios:
• Mining and processing 20 million tonnes of ore per annum
• Mining and processing 10 million tonnes of ore per annum
• Mining and processing 5 million tonnes of ore per annum

Evaluation shows that the largest development scenario is the highest value due to the potential economies of scale. Given its positive economics, the 10 million tonnes per annum development could form part of a staged build for a larger project, or as a standalone project in a rising gold and copper price environment. It is unlikely that a 5 million tonnes per annum development would meet Alkane’s investment return hurdles at current gold and copper prices.

The considered underground mining option uses a Long Hole Open Stoping mining method, consistent with Alkane’s experience at its Tomingley Gold Operations. Given that a high throughput is beneficial to the project economics, future studies will evaluate the potential for sub-level caving or a similar bulk tonnage underground method.