Alkane Resources eyes resource upgrade at Tomingley after continued gold intercepts

Alkane Resources (ASX: ALK) already hosts a plus 660,000 gold ounce resource at the Tomingley Gold Project in New South Wales across three deposits, Caloma, Wyoming One and Wyoming Three.

The latest reverse circulation drilling at the Caloma deposit, designed to
improve the resource status and increase ore reserves, intersected significant gold mineralisation.

The high grade highlights included 6 metres at 16.69 grams per tonne (g/t) gold from 36 metres, which included 2 metres at 34.50g/t gold, and 3 metres at 14.66g/t gold from 146 metres.

Supporting the high grade hits were broader intersections, including 13 metres at 4.44g/t gold from 50 metres, 23 metres at 3.54g/t gold from 55 metres, and 17 metres at 3.05g/t gold from 51 metres.

Alkane is now incorporating the drilling data into the company's geological
model and revised resources and reserves will be estimated.


Potential ten year mine life at Tomingley

Tomingley has the potential for a minimum seven year mine life, with a target of over ten years.

The plan is for an open pit for the first seven years, to be followed by an underground operation.

Importantly for the project is the access to infrastructure, which includes water, power from the state grid and roads providing both primary and secondary access.

Another plus is the skilled local workforce, which includes a population base of 150,000 within 120 kilometres which can be tapped, and therefore saving costs as no fly-in-fly-out staff or accommodation will be required.

The capital costs for Tomingley is around A$90 million, which comprise a CIL plant (A$43 million), infrastructure (A$22.6 million) and owners costs of A$23 million.

Alkane is currently awaiting development consent, with Credit Suisse already granting mandate to provide up to a A$45 million debt facility with a gold hedging program to return average A$1,500 per ounce.


EPCM – Early Works Program

Also - an early works program as part of the EPCM has commenced to accelerate the construction timetable when the program receives development approval.

These include:

- Exercise of an option to acquire a 1,000ML Water Access Licence;
- Placement of an order for the ball mill;
- Letting of a contract for the water pipeline;
- Preparation of an order for the power transformers; and
- Issue of tender documents for the site civil works.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/20348/alkane-resources-eyes-resource-upgrade-at-tomingley-after-continued-gold-intercepts-20348.html