Alkane Resources - Poised for the next stage

A strong Q3 saw the Tomingley Gold Operation (TGO) mine generate operating cash flows of A$21.2m, driving Alakane’s (ALK’s) cash pile to A$60.6m with a further A$8.4m held as bullion-on-hand. Two critical path catalysts are due in the final quarter of FY18, the final modular costing plan for the Dubbo Project (DP) and the way forward for extending the TGO’s mine life. The DP’s future viability has been proven viable technically, and has also been aided by a number of its products realising significant price gains (zirconium products and certain rare earth elements (REEs) related to magnets as well as hafnium and FeNb) driven by numerous supportive end-market changes. While financing the DP continues, we see ALK putting its own cash pile to use extending the life of the TGO’s processing facility via either UG mining or potentially exploration and development.