Alkane to go underground at Tomingley and looking for more gold
Alkane’s Board has approved the development of the underground mining operations at its Tomingley Gold Operations. Highlights of the development plan approved by the Board include:
- 93,000 ounces of gold recovered over a 40-month development at cash costs estimated to be A$1,100 – $1,200 per ounce.
- Ground support work for the portal will commence late in 2018 with development commencing shortly after in early 2019.
- First ore is expected to be produced from underground in mid-2019 and stockpiled on the surface until processing recommences in the final quarter of 2019.
- Cash outflow to recover first ore is estimated at A$25M. One of the first priorities underground is to establish a drill position to target further extensions along strike and at depth as geologically mineralisation is open under all three open cut pits. The Company’s cash and bullion position at the end of the previous quarter was A$80.0M.
The Company is well placed to execute this development:
- Most major equipment required for the underground has been purchased and is currently undergoing refurbishment.
- Recruitment of experienced underground operators and support crew has commenced.
Alkane has a wider regional development strategy for the Tomingley and Peak Hill area with an extensive exploration program continuing over the remainder of the year.
Open cut operations will continue on day shift at Tomingley Gold Operations until early 2019 as exposed ore is removed from the base of the pits. Processing of medium grade stockpiles will continue until approximately April 2019 and then resume on underground ore. Guidance for FY19, the final year of open cut operations, remains unchanged from that detailed in the ASX announcement Quarterly Activities Report to 30 June 2018 (25 July 2018), that is guidance for FY19 is production of 30,000 to 35,000 ounces of gold at an AISC of A$1,300 to A$1,400 per ounce.
The ore that will be mined was detailed in the ASX announcements Tomingley Underground Resource, Reserve & Development (4 June 2018) and Tomingley Underground Resources & Reserves Supplementary Information (19 June 2018) and totals 1.24Mt grading 2.7g/t gold for a resultant contained 108,000 ounces of gold.
The division of the material contained in the mine plan by resource classification was detailed in the previous announcements and is shown again below.
|TOMINGLEY GOLD OPERATIONS UNDERGROUND PLANNED MINING MATERIAL (MAY 2018) @ 2.5 g/t CUT OFF|
|(kt)||(g/t Au)||(kt)||(g/t Au)||(kt)||(g/t Au)||(kt)||(g/t Au)||(koz)|
Apparent arithmetic inconsistencies are due to rounding
The decision to include Inferred Resources in the mine plan was discussed in the previous announcements and there are no material changes to the assumptions that underpin the planned mining material.