Alkane Resources Ltd.

Alkane Resources Ltd. is a multicommodity mining and exploration company with a focus on gold, copper, zirconium, niobium and rare earths. Its projects and operations are located in the central west of New South Wales, in eastern Australia. Alkane commenced gold production in early 2014, after commissioning its Tomingley gold project in February, on time and on budget. The company is also developing the Dubbo zirconia project, with operations scheduled for 2016. This will position Alkane as a strategic and significant world producer of zirconium products and heavy rare earths. Several other copper-gold exploration projects in the region are being evaluated. The company is heavily committed to safe environmental practices and local community wellbeing.

Expert Comments:

Mike Millikan, Hartleys (2/1/16)
"Gold production from Alkane Resources Ltd.'s Tomingley gold operations (TGO) was down quarter-over-quarter but in-line with company forecasts. . .gold production continues to underpin the current trading range, with generated cash funding some of the pre-construction activities at the company's flagship Dubbo zirconia project (DZP). . .the DZP is considered a world-class asset of strategic value, containing a large polymetallic resource of zirconium, hafnium, niobium and rare earths, which can support a long mine life (30-plus years). The project financials appear robust and highlight potential for significant cash flows (AU$300M-plus annual earnings before interest, tax, depreciation and amortization deductions)."

Tom Hayes, Edison Investment Research (2/1/16)
"Alkane Resources Ltd. reports a second cash flow-positive quarter in Q2/16. . .gold production remains on track for 60–70 Koz by FY16E. . .progress on developing the Dubbo zirconia project is also highlighted, with the key mining lease achieved during the quarter."

"It has been a long-term objective of Alkane Resources Ltd. to mine underground at the Tomingley gold project (aka the TGO) and the announcement of a JORC-compliant reserve, undertaken as part of its TGO prefeasibility study, is a major step toward realizing that objective. In fact, when the TGO first started production, Alkane extracted more gold than it had originally estimated within the resource block model for one of its deposits. Further, due to JORC reporting guidelines, all Inferred material included in the pit designs needed to be set to a zero gold grade, but upon mining all Inferred ounces were 100% converted into production ounces. So as you can see, the amount of gold extracted at surface exceeded expectations, and to me this highlights the strength of the mineralized system at the TGO. So, yes, the TGO's gold endowment certainly does support an underground operation. It would not be a surprise to me if the amount of gold extracted underground at the TGO exceeded expectations again." read more >

Tom Hayes, Edison Investment Research (10/19/15)
"Our value of Alkane Resources Ltd.'s flagship Dubbo Zirconium project has improved by 32% based on the completed front-end engineering design (released in August 2015) and conservative (2020) product prices, when compared to the value provided in its definitive feasibility study. The three main reasons are inclusion of a hafnium revenue stream, improved metal recovery factors, providing more metal to sell, and a weakened Australian dollar aiding U.S. dollar-priced revenues against domestic-priced operating costs."

David Radclyffe, Petra Capital (9/27/15)
"The key value driver for Alkane Resources Ltd. is the world-class Dubbo zirconia project with momentum building after receiving state development consent and completion of front-end engineering design studies; these key milestones allow the company to proceed to final approvals and advance offtake/strategic investment discussions. Dubbo is a robust strategic metals project capable of generating >AU$300M/year in EBITDA."

Tom Hayes, Edison Investment Research (8/3/15)
"Coupled with a significantly weaker Australian dollar and well-managed costs, Alkane Resources Ltd.'s Tomingley gold operation generated AU$23.7M in cash flow in FY/15 (after operating and development costs). . .in our view, the market's slight negative reaction to the company's Q4/15 results relates to a broad pessimism toward commodities and a view on quarterly financials rather than considering the full year performance data, which show the Tomingley gold operation to be a solid, profitable gold mine operating in line with expectations."

More Expert Comments

Experts Following This Company

Charles Gibson, Director, Mining – Edison Investment Research
Gareth Hatch, Founding Principal – Technology Metals Research
Tom Hayes, Analyst – Edison Investment Research
Richard Karn, Founder/Editor – Emerging Trends Report
Mike Millikan, Resources Analyst – Hartleys

The information provided above is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.
Investing Highlights
Multi-commodity miner: gold, zirconium, niobium and rare earths
Successful mining track record
Next heavy rare earth project