Alkane Resources

Thanks very much. So, good day everyone. It's, uh, great to be chatting here again. Let's get straight into it. Alkane has three operating assets called Tomingley, which you can see there in New South Wales, about a four-and-a-half-hour drive from Sydney, doing circa eighty thousand ounces per year. It produces gold Dore, which we refine in Sydney. We have Costa Field, about an hour-and-a-half drive north of Melbourne in the region that James was just talking about, near Bendigo. And this produces gold and antimony. And on an equivalent basis, this works out about forty-five thousand ounces a year.

Then we have our mine in Sweden, Björkdal, just inla-inland from Skellefteå, so about seven hundred kilometers north of Stockholm and a bit below the Arctic Circle. That produces gold in different forms of concentrates. You know, one nearly forty percent gold by mass. That produces around that forty-five thousand ounces. Well, last year, forty-one, higher this year in concentrate. And then last but not least, we have a large project, Boda Kaiser, which is about seventy kilometers to the east of Tomingley or about a hundred and ten kilometers north of Cadia. And that is a large copper gold porphyry. I'll tell you about that at the end.

So together, these three mines produce circa a hundred and seventy thousand ounces. So as a result of, of, of that and the free cash flow that we have in our business, we find ourselves at the end of June with just on four hundred and forty million dollars in cash and bullion. Um, debt-free, apart from our equipment finance, a revolving credit facility. And as well as that, we, we just-- we announced and have just, uh, gone ex-dividend, uh, a two cent dividend for the last financial year, and we've initiated a fifty million dollar Australian share buyback as well. So that's part of the capital return that we've, we've got going on. So our balance sheet's in great, in great shape.

So looking at this year, FY twenty-seven, so starting in, uh, one July, twenty twenty-six and going through to thirty June, twenty-twenty seven, we're gonna do pretty much similar year to what we did last year. Um, last year was a lot of consolidation after the merger with Mandalay in August of twenty-five. So we're gonna do just a bit over eighty thousand ounces at Tomingley and similar in Costa Field to what we did last year and a lift in Björkdal. If you look at our all-in sustaining cost, there's a bit of a message in that and the growth capital that I'll take the time to talk now and then I'll talk on each of the assets.

At Tomingley, we have eight years mine life and the growth capital is moving a highway. I'll talk to that coming up, and that finishes in this calendar year-- in this financial year, sorry. At Costa Field, we are doing a lot of exploration and min- going to a new mining area. That's where that growth capital is going. And at Björkdal, our highest cost mine, we are looking to go into a new mining area to drive that cost down. That's where that growth capital is going, as well as increasing our tailing storage capacity. So you can see we've got a pretty capital-heavy year, but that rolls off quite a fair bit, uh, out of this financial year. And of course, we still get, you know, reasonable free cash flow generation as well.

So diving into these assets. Tomingley. Schematic there. If you drive from Dubbo down to Parkes, not where Evolution has North Parkes, you will drive right over the top of this mine. Started mining in twenty thirteen, poured our first gold in twenty fourteen. Still g- still going strong. Uh, this mine was originally discovered by Alkane back in the early two thousands and then permitted and brought into production.

So the big thing that we're doing here is we are moving a highway to where we have that dot that says Roswell and San Antonio. We're already underground there. We're moving a highway to allow us to get into two hundred and fifty thousand ounces of open cuts. That finishes, thank goodness, 'cause it's been a long way since discovery through the capital program to get to this position, but that finishes circa end of March, start of April next year, and then we start those open cut mines after that. So think eighty thousand ounce steady state, eight-year mine life here.

We obviously look in two areas, up and down the belt and within the mine itself. We have an area in behind our existing mine we call Roswell Western Mons Diorite. We've been slowly expanding that and adding that in to production. We've got an area called McLeans. So we have a decline going from that Wyoming one down to Roswell. We've been drilling off that area of McLeans. We have a new system there, reasonable grades. And then as well, we have some deep seismic targets, which to be honest, uh, haven't yielded anything stellar yet at the moment, but they're quite deep, down a kilometer deep. So quite prospective in the corridor between our original open cuts and down at San Antonio.

So we're spending money there, and we're also spending money at these one, two, three. The main one we're spending money at is El Paso. El Paso is on wholly owned land by Alkane. It's on land that we've diverted the highway around, but we're yet to put the mining lease there 'cause we're still trying to work out what exactly is this size resource going to be. Almost certainly we'll tackle it from underground. We're looking at Peak Hill, how do we bring that back into production? We've got some drilling that we've been doing underneath that, and then we have smaller targets to the north of Tomingley. So quite a prospective area. And as it-- as we look there, in our ideal world, we're chasing at least a half million ounce deposit in that, because that's material to us in terms of either lifting production or adding another block of seven years mine life.

At Costa Field in Victoria, very high-grade gold and antimony mine. You can see the- I'll come to lift in resource and reserves in a tick. But you can see the grades here. This typically runs about twelve grams per tonne equivalent. Uh, narrow vein, typical st- you know, our drive width is one point eight meters in this, in this location, and we only mine about a hundred and fifty thousand tonnes per year. The plant is designed for a hundred and forty. We do about a hundred and sixty thousand tonnes per annum at the moment.

We produce a gold concentrate, which we get refined in Melbourne, and we produce an antimony and gold concentrate, which is primarily sold into China. That is not contracted. We sell it on a shipment-by-shipment basis. And until Livoto in the northern part of New South Wales ramps up further, we remain the largest antimony producer in the Western world. So here, we-- our mine life is starting to get past five years in this, which has been a significant achievement for us.

But here, everything's about our exploration prospects that we have. And so, in particular, the main areas that we're excited about at the moment are Brunswick South, that we have now delineated the reserve and we're actually nearly developed across to that at present. That's only about three hundred meters. And then we have some other interesting deposits. We have stuff at depth, where you're chasing ultra-high grade. We have stuff to the north. Number six is something that might look a bit like Southern Cross, they're sort of dike-type structures. We're not really sure. And then we have step-out testing all along the True Blue corridor. What we're trying to do is generate a target that we could convert into three hundred thousand ounces, 'cause that's material to here at Costa Field.

If we then go to Sweden. Sweden has been running since the mid-'80s, so over thirty-year mine life here. Still has a very long reserve life, but as I talked about, high cost. The main thing that we have here is we, we mill a million tonnes from underground and four hundred thousand tonnes from low-grade open cut stockpiles. So the big thing that we're doing here is we've already commenced an open cut, and we've extracted our first ore from that at a, at a, at a mine we call Nyalens. And then we're developing at the moment to Storheden.

So if we look at this map here, you can see that Storheden, uh, number one is up to the north of the existing deposit, seven hundred meters away. So we're doing a decline across to that. That's part of the capital allocation. And then we continue to look more regionally, uh, in this region as well. But we're only allowed and permitted in and around the existing mine, and then we're working through, uh, mining out to number one at present. The whole purpose of that is to take this to plus fifty thousand ounces and then drive the cost down.

If you look at what we've been able to achieve in terms of reserve growth on these three smaller mines, you can see that w- we-- yet for another year, yet again, we've replaced depletion in our reserves and we've increased our resources. Now, I, I exclude the Boda Kaiser mineral resource 'cause it just dwarfs the scale on, on, on this. So we continue to look at these step-out deposits. We replenish year on year. But at Tomingley, we're chasing a half million ounce resource. At Costa Field, we're chasing a three hundred thousand ounce resource. And at Björkdal, we've already identified it in the Storheden, and we're developing across to it. That's the next leg of life in our mines, and if the resources are big enough, expansion in production.

Touching briefly onto Boda Kaiser. This, we did a scoping study in, in twenty twenty-four. So we discovered it in twenty nineteen. I marketed it just as the, um, COVID hit and, uh, we released nearly a kilometer at a gram a tonne and the share price went down ten percent and I flew out of Sydney with the tail between my legs. But nevertheless, uh, I got out before they shut the borders.

So we have this really large deposit. We've got two hundred and sixty kilometers worth of drilling in here. Fourteen point seven million ounces equivalent in resource. Two-thirds of that, so just on ten million ounces is in indicated. It is large, low-grade porphyry. It runs at a just over point three, so point three two grams per tonne gold. Runs about point eight-- point one eight percent, so just under point two percent copper. Works out to be just under point six grams per tonne equivalent. Really large, low-grade project. Those economics were done right back when US gold was, you know, just a bit over half what it is now, and copper was, uh, you know, two-thirds of what it is now. So clearly we've hit a price environment where this is interesting.

But the main thing that we're doing here is getting it permitted. I'm a, I'm a really big believer in hitting as many areas of permitting at once as you can. And in this particular case, we're halfway through our environmental studies that are-- that go for two years minimum. We are looking at one of the things that you submit to the regulator in New South Wales is you, is you show you've had a whole heap of impact options. So we've done those options assessments. We're negotiating with property owners underneath, where we either buy properties or do option arrangements on it. And obviously consulting with other stakeholders. There's water sourcing and water license. All of that is actively underway at the moment.

So in the middle of twenty twenty-seven, so twelve months away from now, we expect to update our pre-feasibility study and put our submissions into government for project approval. The reason why I have that bar starting in twenty twenty-seven is you do this like pre-approval arrangement where you liaise with government before you then submit the full approval. So we expect that that approval will pop out, you know, by the end of twenty twenty-nine and we'll go to FID. The reason I go on about this is that I don't think much of this is reflected in our share price, and certainly we see that there's a quite leveraged opportunity for us here, and we continue to pursue it pretty aggressively.

And so if you're an investor, not so much here in the room, but, uh, listening online, why would you bother owning us or indeed do some research? We deliver on our production We made our guidance consistently for over a decade. We're familiar with both underground and open cut. We continue to meet and expand our mineral resources. We can deliver on growth projects. We do have a history of progressing permitting. When we get Boda approved, it'll be the fourth permit we've done since twenty twelve in that jurisdiction.

We undertake corporate investment, uh, like James just referred to in, in the last presentation. A difficult environment to do corporate transactions in, but certainly we seek to look at that in terms of growth. I think we have a sleeping giant in Boda that's well worth people considering and doesn't reflect much in our share price. And above all, we have very strong free cash flow generation, and we're returning that to shareholders in dividends and buybacks. So thank you very much for listening. Thank you for anyone listening online and take any questions if anyone's got them.

Questions from the floor first? No? Okay. Um, firstly, it's in-interesting mix of locations, Victoria, New South Wales, Sweden. Um, would, would you be sort of agnostic where the growth might come from? Um, you know, is it just economics-based, or do you see yourself-

Yeah, yeah. E-e-economics and, of course, different jurisdictions. Um, [lip smack] you know, each jurisdiction, well, within Australia, has its strengths. They can be, um, ease of native title, ease of access, ease of o-obtaining water, um, all of these things. Whether you can run a hub-and-spoke-type thing. So all of these things, you know, are things that are considered. But for us, we look in, um, Australia, New Zealand, US, Canada, and Scandinavia for, you know, acquisition opportunities. And yeah, we're, we're pretty agnostic about those. They're all tier one jurisdictions and, yeah, regulatory-wise, each has different strengths and weaknesses. Um, yeah, but, but absolutely it's, it's driven by economics and what's value accretive.

Um, so you've, uh, commenced the, uh, the dividends and the, and the buybacks. Sort of how did you weigh that up versus your own internal growth opportunities or, or beefing up the balance sheet? Just the priorities there.

Yeah, well, we're in the happy position from such a strong gold price with, with, you know, established mines that the, the growth that I outlined is all the logical growth that we can see at our operations at present. We're extending tailings dam lives. We're replenishing mining fleets. We're doing as much exploration as we have technical targets for. And then we still find ourselves with sufficient cash to distribute that to, to shareholders. And so that's absolutely what we're doing. So, um, I, and I expect that to continue. We've certainly tried to pick a, uh, share return rate that we can continue to increase on as share-- for our shareholders.

Just a, a follow-up on that. You've got the ASX, TSX cross-listing. Is there a slightly different push, you know, for, for the capital management from, from either market?

Oh, abs-absolutely. I think an- you know, anyone familiar with both markets will know that the Australian investor, particularly a retail investor, um, is, is very driven by dividends, particularly with some of the, uh, potential tax changes being considered within Australia. And in the, the US, particularly North American investors are very, uh, keen on buybacks as a method of capital return. So that's why we choose both of those and, you know, I've heard other people talk about the tension between those two things. You, you don't get the same tax advantages as a, you know, a shareholder in Canada and North America as you do in Australia. So we really try and balance those interests in, in, in choosing how to return capital to shareholders.

Any questions, anyone? No? Um, you, you touched on the antimony coming out of Costa Field. It's, you know- Yeah ... one of the, a key Western world supplier. Yeah. Um, is there any sort of short-term impetus to embrace those strong commodity prices, or is that the exploration you're talking about or?

I, I, I think, I think potentially for sort of exploration approvals, potentially you c- you can get some degree of government interest. Um, you know, those in the audience who, who are Australian will know that, uh, well, but it's happening a bit in the US as well. People talking about critical minerals is a way to try and, I think, engage the public in understanding that, you know, we, we do use mining. Um, and so absolutely, you, you do get some degree of political imperative by having, um, antimony, copper, a-and other things inside your portfolio. But, you know, the, the reality of it is it forms about three percent of our, three percent of our revenue. And, um, so in terms of acquisition, no, I would not look at a primarily wholly antimony asset. But I would look at another gold asset with an antimony, silver or copper credit.

Yeah. Thanks. Um, just to touch a bit more on Boda Kaiser. Yeah. Obviously very, very large compelling economics. Um, but perhaps maybe a, a partner might be involved to develop the, the twenty million tonnes per annum. So sort of where would you like to push the value to a-as Alkane first, you know, studies permitting-wise, et cetera?

Well, well, I think it's getting approval, right? We can all get that there's a massive difference between an unapproved project and an approved project. And so we would absolutely wanna take that through the approvals. We don't think necessarily any partner is better or worse than us. Well, there's probably a few worse, but not any better than us at getting that approved. And then it really comes, let's say in twenty twenty-nine, w-w-well, how do we make the most money for shareholders? Is it a partial sell down? Is it developing ourselves? Is it a majority share down? Is it complete sale if someone, someone wants to? We'll, we'll evaluate, we'll evaluate all of those things when the time comes. At the moment, we want to redefine the economics of it, but most particularly, we wanna conclude all the intense work, which other speakers have referred to, that's required to get something permitted, rumbling and away in this, in this environment. And we, we're pretty confident that we will.

Thank you. Yeah. Any last questions? No? Okay. All right. Nope. Great. Thank you very much, Nic and- Thanks, mate ... Alkane Resources. Cheers. [audience applauding]