Alkane Resources : Quarterly Activities Report

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ASX and MEDIA RELEASE

24 January 2022

Quarterly Activities Report to 31 December 2021

Tomingley Gold Operations (Tomingley)

• Gold production met forecast for the quarter of 16,935oz, with site operating cash costs at A$1,089/oz and AISC of A$1,338/oz.
• Gold sales of 17,754 ounces for revenue of A$43.9M at an average price of A$2,475/oz.
• FY2022 production guidance for Tomingley is unchanged at 55,000oz to 60,000oz. FY2022 AISC guidance has lifted to $A1,500/oz to $1,650/oz due to the potential cost impact of the combined effects of workers self-isolating during the current omicron wave and from heavy rainfall impacting the pit walls and access ramp.

Tomingley Gold Extension Project (TGEP)

• The Environmental Impact Statement has been finalised and submitted to the NSW Government for their final review. Formal submission is expected later this month. The expected timing of Project Approval remains mid-2022.

Exploration

• The drill program at Boda continues to show extensive mineralisation, including high grade zones, over a 3km strike length from Boda Three to Kaiser. (see ASX Announcements 22 October 2021 and 17 December 2021)
• At Boda significant results included:

BOD059	906.7m grading 0.45g/t Au, 0.18% Cu from 309m
incl	219m grading 0.28g/t Au from 309m (gold only flanking zone)
also	672.7m grading 0.51g/t Au, 0.23% Cu from 543m
incl	115m grading 1.98g/t Au, 0.53% Cu from 864m
incl	2.8m grading 13.0g/t Au, 1.59% Cu from 901.5m
also	33m grading 4.06g/t Au, 1.29% Cu from 946m
incl	6m grading 11.2g/t Au, 1.81% Cu from 968m
KSDD043	927m grading 0.31g/t Au, 0.16% Cu from 159m
incl	157m grading 0.31g/t Au from 159m (gold only flanking zone)
also	754m grading 0.31g/t Au, 0.19% Cu from 332m
incl	74.7m grading 0.92g/t Au, 0.36% Cu from 680m
incl	12m grading 3.01g/t Au, 0.65% Cu from 732m
also	38m grading 0.60g/t Au, 0.79% Cu from 875m
incl	9m grading 1.04g/t Au, 1.40% Cu from 839m
also	6m grading 1.26g/t Au, 0.12% Cu from 1080m

CONTACT	: NIC EARNER, MANAGING DIRECTOR, ALKANE RESOURCES LTD, TEL [phone]
INVESTORS	:	NATALIE CHAPMAN, CORPORATE COMMUNICATIONS MANAGER, TEL [phone]
MEDIA	:	PAUL RYAN, CITADEL-MAGNUS, TEL [phone]

Level 4, 66 Kings Park Rd, West Perth WA 6005, AUSTRALIA (PO Box 768, West Perth WA 6872, AUSTRALIA)

Telephone: [phone] Facsimile: [phone] www.alkane.com.au [e-mail]

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• The preparation of an initial resource estimation for Boda continues, expected at the end of the current quarter.

Corporate

• Cash, bullion and listed investments position totalled A$118.3M.
• The debt facility of $20M with Macquarie Bank was repaid during the quarter.
• Shareholding of ASX listed gold developer Calidus Resources Ltd (ASX:CAI) was ~9.7% at end of December quarter.
• Shareholding of ASX listed gold developer Genesis Minerals Ltd (ASX:GMD) was ~12.7% at end of December quarter. During the quarter GMD shares to the value of $18.9M were sold.

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TOMINGLEY GOLD OPERATIONS

Tomingley Gold Operations Pty Ltd 100%

Tomingley Gold Operations (Tomingley) is a wholly owned subsidiary of Alkane, located near the village of Tomingley, approximately 50km southwest of Dubbo in Central Western New South Wales. The gold processing plant was commissioned in January 2014 and has been operating at the design capacity of 1Mtpa since late May 2014. Mining is based on four gold deposits (Wyoming One, Wyoming Three, Caloma One and Caloma Two).

Operations Performance

Tomingley underground continued to perform well during the quarter. The cutback in the northeast of the Caloma pit also performed well. The omicron COVID-19 outbreak in NSW has resulted in a number of employees and their close contacts testing positive, requiring isolation and recovery. At times this has affected approximately 10 to 20% of the workforce. In addition, very high rainfall has occurred in western NSW, resulting in some pit wall and ramp erosion that required remediation and stabilisation.

Despite these circumstances FY2022 production guidance for Tomingley is unchanged at 55,000oz to 60,000oz. FY2022 AISC guidance has however been lifted to $A1,500/oz to $1,650/oz due to the expectation of potential cost increase, due to productivity impacts.

A total of 16,935 ounces of gold was poured for the quarter. The site cash costs for the quarter were A$1,089/oz with an all-in sustaining cost (AISC) of A$1,338/oz.

Gold sold for the quarter was 17,754 ounces at an average sales price of A$2,475/oz, generating revenue of A$43.9M. Bullion stocks were 1,203 ounces (fair value of A$3.0M at quarter end). Site operating cash flow was A$25.7M for the quarter.

Tomingley Gold Extension Project

Alkane's intention is to develop the Roswell and San Antonio deposits, which are located 3 - 5km south of Tomingley, as soon as possible.

Alkane continues to progress approvals for this development. The Environmental Impact Statement has been finalised and submitted to the NSW Government for final review. Formal submission is expected later in January 2022. The expected timing of Project Approval remains mid-2022.

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Regional Exploration

Near-mine exploration continued at Tomingley targeting additional mineralisation outside the existing resource models at Roswell and San Antonio, as well as Macleans, El Paso and the Plains prospect to the east of Roswell.

Tomingley FY 2022 Quarterly and Annual Production Figures

	Tomingley Production						FY			Sep Quarter			Dec Quarter			FY
						2021			2021			2021			2022
	Open cut
	Waste mined		BCM	1,218,779		290,371		233,937		524,308
	Ore mined		Tonnes	71,347		93,118		91,185		184,303
	Strip Ratio		Ratio	32.8		8.0		7.2		8.0
	Grade		g/t	0.64		0.63		0.83		0.73
	Underground
	Ore mined		Tonnes	706,889		226,054		208,534		434,588
	Grade		g/t	2.63		1.87		2.42		2.29
	Ore milled		Tonnes	928,531		247,884		257,384		505,268
	Head grade		g/t	2.14		1.79		2.42		2.11
	Recovery	%		88.8		85.1		85.4		85.2
	Gold poured		Ounces	56,958		12,141		16,935		29,076
	Revenue Summary
	Gold sold		Ounces	55,929		13,359		17,754		31,113
	Average price realised		A$/oz	2,286		2,467		2,475		2,472
	Gold revenue		A$M	127.8		33.0		43.9		76.9
	Cost Summary
	Surface works		A$/oz	17		263		199		227
	Mining		A$/oz	452		709		431		550
	Processing		A$/oz	347		406		321		357
	Site Support		A$/oz	125		154		138		145
	C1 Site Cash Cost			A$/oz			940			1,531			1,089			1,279
	Royalties		A$/oz	73		65		78		73
	Sustaining capital		A$/oz	296		268		114		180
	Gold in circuit movement		A$/oz	-58		16		-6		3
	Rehabilitation		A$/oz	20		20		20		20
	Corporate		A$/oz	49		61		42		50
	AISC1			A$/oz			1,320			1,961			1,338			1,606
	Bullion on hand		Ounces	3,246		2,025		1,203		1,203
	Stockpiles
	Ore for immediate milling		Tonnes	71,938		143,535		185,869		185,869
	Grade		g/t	0.95		0.92		0.85		0.85
	Contained gold		Ounces	2,856		4,246		5,114		5,114

1AISC = All in Sustaining Cost comprises all site operating costs, royalties, mine exploration, sustaining capex, mine development and an allocation of corporate costs, calculated on the basis of ounces sold. AISC does not include share based payments or net realisable value provision for ore inventory.

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