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Alkane chases status

PERTH-based junior gold producer Alkane Exploration NL plans to become a significant player in the zirconia industry.

Alkane will stake its long term growth potential on large rare metal resources in its leases in NSW.

It is currently deciding the feasibility of establishing a $30 million project to process 200,000 tonnes per annum of zirconium ore along with other associated rare metals from this large resource located twenty kilometres south of Dubbo and fifty kilometres north east of Peak Hill.

The deposit contains zirconium, hafnium, yttrium, niobium, tantalum and rare earth elements within a hydrothermally altered trachyte.

According to consultant geologist Margaret Kirk, the markets for these products are specialised and varied and the challenge for Alkane will be to establish itself in the marketplaces involved.

Alkane has spent several years conducting metallurgical tests to find the best way to process the ore and is currently concentrating testing on sulphuric acid leaching-solvent extraction.

This processing method has a potential synergy with the development of the Peak Hill sulphide gold/copper ore as Peak Hill would produce sulphuric acid as a by-product which could then be used in the sulphuric acid leaching process at the Dubbo zirconia project.

A feasibility study is expected to be finished in the first half of 2000 and production could potentially commence in 2002.

Ms Kirk said initial results of the study were favourable showing the feasibility of the sulphuric acid leaching process with a high recovery of zirconium at 93 per cent, recoveries of yttrium, rare earths and niobium ranging from 58 per cent to 68 per cent and low recovery of tantalum at 38 per cent.

It is estimated that the project could generate annual revenue between $42 million and $57 million depending on commodity prices and assuming a plant capacity of 200,000tpa.

Capital costs of development have been pegged at an estimated $30

million and $50 million depending on whether sulphuric acid is purchased or produced on site from the Peak Hill by-product.

Alkane will need to raise significant finance to develop the project. However, an end user of zirconia could be attracted as an investor in the project and as a guaranteed customer.

Any remaining capital could be raised through debt or a share issue.

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Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 29/06/18

1 year TSR5 year TSR
87thRed 5145%-33%
484thAlkane Resources-2%-5%
491stBCI Minerals-4%-43%
633rdExcelsior Gold-25%-15%
781stBlackham Resources-64%-5%
722 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Share Transactions

25/06/18
$320k Bought
06/06/18
$254k Bought
04/12/17
$0 Issued
Total value as at the date of the transaction
Source: Morningstar

Revenue

29th↑Alkane Resources$117.9m
35th↓Red 5$69.6m
37th↑Excelsior Gold$64.1m
39th↓BCI Minerals$63.6m
41st↑Blackham Resources$54.9m
507 listed resources companies ranked by revenue.
Source: Morningstar

Remuneration from Alkane Resources

153rdNicholas Earner$605k
172ndIan Chalmers$581k
217thMichael Ball$502k
Ranked by total remuneration from all listed WA companies

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