Alkane Resources

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all set up, a lot of time change. That's correct, yep, you got the shot. Welcome to the next session here and we'll, we'll get started right away. There has been a change in the schedule in that the first, company that was supposed to appear, had pulled out. So all of the, prerequisites after that will be presenting 20 or 30 minutes earlier than what they had originally. So our first lead out at this point is with Alcane Resources Nick Earner, the managing director of the company. Thanks very much. So for anyone that's come to see Snowline, welcome, you've just had an upgrade. So, the disclaimer's probably the same as theirs though, so. Let me tell you about Alcae, why own us? We're an established producer. We've been, all of our mines have been producing for over 10 years. This year we're on track to do in the middle of that guidance, our financial year runs from 1 July to 30 June. We're generating a lot of cash, I'll talk you through that. We have antiy exposure, we continue to operate the largest western antimony mine, which we've been running since 2008, in the western world. It's still quite small by global standards. We had a lot of growth and mine life extension occurring, we've got this really large copper gold project, which I'll talk to you about, and we successfully competed in the merger which really springboarded us into this position in the middle of last year. So let's have a look at some of our fundamentals. First we'll talk about where the mines are, then we'll talk about where our balance sheet sits at. We've got 3 operating mines, Tommingly, about 4 hours' drive. West-ish of Sydney. That mine is an underground mine. It's wholly owned by us. There's no royalties on any of these mines, and we're an owner operator, so we run our ownmi underground. That produces bullion, and that bullion gets taken to Sydney where it's refined, and we sell it there just in the normal gold markets. Next we have Costerfield. That does around 50,000 ounces, gold equivalent. This is the mine that produces Anamy. We produce two products from there. We produce a gold concentrate, which gets refined in Melbourne into Dore into finished product, and we produce an anaminin gold concentrate which we sell overseas, predominantly into China at present, until other smelting options become available. Then we have in northern Sweden just inland from Schleftio near the bleeding smelter. We have, a gold mine there that's also underground, it's doing in the low 40,000 ounces, that produces 4 different concentrates, gravity gold concentrates that we sell in Europe and a flotation gold concentrate that we transport across the corridor to Dunedin. So we've got 1.36 billion shares on issue after the merger that we've just done. Our share price was $1.80 Australian, so $1.20 odd US as of last Friday, today it's $1.82. Normally when I present, it goes down a few cents, and I'm always wrong. But happily today, we're up. So the market cap, the market cap is about $2.5 billion odd Australian dollars, and, One of the reasons for such a big high to low, one is the CEO's this top guy, and you're seeing him today, but the second reason is, The second reason is that we've got pre-merger and post-merger, share prices within there. And a big factor, one of the reasons why we came together was we wanted to increase liquidity. We wanted to get index fund inclusion in the ASX 300, and we wanted a lot of funds, so I would go and meet people and they'd say what's your turnover, and I'd say we do $2 million a day, and they'd say that's too small. But now we're doing You know, 10 to $12 million a day on the ASX and a couple of million dollars on the TSX, so we've had a lot more fun engagement, and as well as that, not only are we in the ASX 300, but we're actually positioned circa 170, so we're a strong chance of going to the ASX 200 in the June rebalance, which should motivate another set of passive buying. Cash and gold bullion at the moment we've got just under $250 US. The only finance that we have is on our equipment. We've got about $13 million left to pay off. We have a revolving credit facility completely undrawn that's $110 million Australian dollars, so our total liquidity is just under half a billion dollars Australian dollars or just over $300. coverage, For Australian people familiar with the Australian market, Ord Monette, Bell Potter, Eros, Hartleys, Mollis Australia, and Red Cloud and Bemo in out of Toronto and Edison out of London. So let me tell you a bit about the assets where we're going. These are the three assets. This is our guidance for the year, our all in sustaining costs. Tommingley, we're sitting at the midpoint of all of these guidances. So Tommingley, call it a $1600 an ounce US mine. Costa field, similar, another $50. Yorkdale's our most expensive producer, I'll talk you through what we're doing about that at $2800 an ounce. Last quarter, You know, we added $130 into the bank post-growth, post Capex, all that sort of stuff, so we're in, we're in, we're in great shape. On average, at prices about now, we bank, post all the capital you're seeing and everything, we bank about 50 million bucks a quarter. Which is not too bad. so that's all in sustaining cost, and then our capital underneath, I'll talk you through it, but the Tomingly capital is moving a highway. To allow us to bring open cuts online. Costa field, almost all of that's going to exploration, and Bjorkdale, we're just starting to ramp up on mine development into a new mining area. So let's dive into the assets. Here is Tom Mingley at dawn. So, This top picture here, you can see, that is 8.5 kilometers of highway, we're spending the better part of 50 million bucks Australian to do it, because on the, on the right hand side of that picture, we're gonna have two open cuts in in a year's time. There's about 250,000 ounces in those open cuts, that's why we're doing it. That's included in those reserves, we have about 7 years of reserves ahead of us, that's included in those reserves. You can see we're well on track for our guidance, we're sort of Done 60,000 ounces here, our guidance was 750 to 800, we're on track for the high end of this particular guidance. This is a mine that we discovered ourselves, got approved ourselves, developed ourselves, and we've been operating it by ourselves for over a decade. So Great, this is the engine room of our company at the moment. Exploration, clearly, like everybody, with a small mind, we're constantly chasing how we can increase our reserves. Items 3 and 4 are right near, within 100 m of existing infrastructure at the mine. Good solid grades, of course I put the best ones up, I didn't bother putting the dusters that were, that defined the end of it up, but so, typically, Roswell has run about 2.5 g per ton. And this looks similar in these areas, so we, we have a pretty big future here, and we, that this range, this whole exploration belt which we own and have operated for ages, is over 15 kilometers in length. So we're very, Expectant of extending our reserve life further. Costafield, this is the one that produces Antony in Victoria, about an hour and a half's drive north of Melbourne. This is a narrow high, high grade deposit. These are diluted grades, so this runs at about 12 g per ton equivalent. And the mining width that we do here is 1.8 m. I would argue. That we are the best narrow vein miners in Australia. That's pretty easy to say because there's not many narrow vein mines, right, but. But, but this team has been doing this for over 20 years, and dilution is a, a thing that we manage very, very closely. The mill here is only 140,000 tons per annum. But our vertical extraction rate and the way the ore body's set up, that's all we do. So we do about 150, 160,000 tons per annum. That's, this is what gets us about this 50,000 ounces. So, here. Typical grades, and I'll I'll show them on the next page, we often, it's, you know, 5, 1015 centimeters running at 67 ounces per ton. That's that's a classic grades that you see here. So we, we have multiple mining areas and we've been doing it for a long time. So we have a joint venture with a company called Nagambie that we've just started as potential additional fee to this. It's about 40 kilometers away. It runs lower gold, higher Antony. And we're working out, you know, what is there, it's an earning on exploration, 25 million bucks we're spending over a period of a few years. So if you look at our immediate mine exploration focus, if you look at 33 is actually above where I just showed you, so again, 345, all within around our existing infrastructure, but that's, that's a classic sort of drill result that you get. 1 m 0.5 m, 20 centimeters grading, a lot, right? But what you end up washing out at is about this 12 to 15 g per ton ore body. So We, we, we see a lot of life here and then we think we have found a repeat structure in true blue which is 1.5 km to the, To the west of this mine, we currently have that in for approvals, so at the moment, so we expect to be mining that soon. So Costerfield, it's been a 3 year reserve, For 20 years, so we're very focused on extending that reserve out. Bjorkdale in Sweden Ah, so this, this ran as an open cut from the mid-eighties through to the just it through to 2019, it's now underground. It has a very, very long reserve life. The key here is costs. There's a 1.4 million tons per annum mill. Currently we get out of the underground about 950,000 tons a year. The remaining 450,000 tons comes from low grade surface stockpiles. So all of our focus is on bringing on new mining areas and new resources. To take that 0.5.6 grams per ton and make it 1.4 g per ton, and therefore go to 50,000 plus ounces, and therefore decrease the oil and sustaining costs, that's our big focus there at the moment. So where are we doing that, we have the store hidden resource, which we've identified, which we are currently, Working through their, The portal location and other things to develop across that area, so that's one thing we're doing. We have a small open cut to the right of the picture that we're bringing online that's got about 1.5 million tons in it that we'll use to supplant. That's 3 or 4 years of diverted feed, and we have extensions at depth in both areas. So Yeah, Bjorkdale, we're very, very confident that we will increase the mining rate out of there and lower the oil and sustaining costs. Very briefly, cos it's topical, and it's topical worldwide. All three of our mines are grid powered, so we don't use diesel gensets or anything like that, but all three are grid powered, 2 in New South Wales. This one is hydropowered, and the cost of the hydropower is roughly 2 cents per kilowatt hour. The cost in our other operations is around 11 to 13 cents per kilowatt hour Australian. So certainly some of the news that you might see about some Australian gold producers being under threat with diesel, that is not the case for us. Now I'll talk to you about our big project that we have coming down the pipeline. Boer Kaiser was discovered by us in 2019, we put the Discovery hole in. This is 15 million ounce equivalent at just under 0.6 g per ton. It's a very, very big resource. We did a scoping study back when gold was free at $3500 an ounce. my wife reminds me of that, she said, I want, you're in gold, give me a really big chunky gold necklace, and I said, no, no darling, it's $3500 an ounce, there's no way I'm paying for that. Don't I look like a muppet now? But anyway, so back when then, so obviously there's a lot more revenue that can come out of this project. So clearly it was 24% IRR at nearly half the gold price. Clearly this is a project that will execute in this environment, so this is all about the approvals. We continue to look up through this region, this is the size of our tenement, we continue to look for is there a higher grade portion that's better than 0.6 that we can feed in. We continue to look at that, it's quite prospective. But this is what we're doing. Of course this is a grind, we absolutely get that. But we have been operating in this region for the better part of 50 years, and when we get this approved, it will be the 4th major approval we've had done in 13 years. So we're not, we're we're very, very used to this. We're doing all the environmental studies, we're negotiating around buying properties or, and that sort of stuff, we're selecting sites, we're negotiating rail water. This is bread and butter, obviously for a mining company that wants to come into production. The reason why I mention this and go on about it is if you look at our share price versus our peers in Australia, you will see that this carries very little value in our stock price. So this is the most leveraged thing I think we can do to our market cap. If this is approved, then it can't sit at $0 inside the stock price. It has to be worth something, and I've watched presentations here of projects similar to this with market caps that are over a billion dollars. So I suggest it's worth 0, or maybe they're not worth a billion, it's, you work it out. So what are we doing? We're a production company, the biggest thing we're doing is focusing on safe and stable delivery of production, cos that gives the cash flow and the cash flow gives a differentiation to a lot of other people. We're working on the mineral resources. Particularly at Tomming we're moving that highway. Particularly at Costerfield we're developing that new mining area. Particularly at Bjorkdale, it's a new mining area, it's the open cut, it's lifting the mining rate, and Bodokaiser, it's all about the studies. We continue to look at inorganic growth opportunities. The merger with Mandalay is very, very successful for us. I think the strength of our balance sheet is enabling us to do a lot of things. We would like to do similar things again or buy another development project that fits within our existing production in Bode Kaiser out in 2030. So, we look in Australia, New Zealand, US, Canada, and Scandinavia for those opportunities, and we're nearly always in a data room. So that's us, Certainly, thank you very much, appreciate your time. Fire away with any questions. Any questions from the audience here in the second row. Thanks Nick, great presentation, and congratulations to you on the team, on the merger and obviously the record share price. I just noticed in your component on Costafield you mentioned that you might have some mineralization that's similar to Southern Cross's Sunday Creek. How much effort will you be putting into chasing that because that obviously could be game changing. Yeah, yeah, so yeah, it's a that's a good question. So Sunday Creek obviously carries, you know, a very prospective area, it's about 45 kilometers from here, and they appear to have, you know, stacked vein sets of of a density that they're that they're looking to mine. So for us, This is probably a tier 1.5 target. And the reason why I say that is we're an operating mine. So I'm not trying to convince you that one day I can operate. I'm not trying to get it permitted. I'm making money. And that is a new area that we will eventually go into, but if you look at the intercepts that Southern Cross get, they're they're they're just like these intercepts. So we have those all in and around our existing operations, so that's what we're focusing on. But certainly we'll be drilling there within the next 12 months, absolutely. Yeah, it's, it's, it's an incredibly prospective area. The issue in most of these areas in, in New South Wales and Victoria is landholder density. It's around where have people got farms, have people subdivided their farms into, into these 5 acre lots. That is tough going in there. This is an underground mine in a with a really small footprint, which is great. but yeah, that's the challenge. Thank you, good, good question. Just yell it out, you're right, yeah. Needs it on the mic for the, audience. Thanks, I'm very excited about Trilo as well. Ah, Victoria, possibly for good reasons, had a bit of a negative reputation for permitting and support. Yeah. I've heard that's changed, can you perhaps. Yeah it's, it's, it's, it's true. You know, it's, it takes a long time for perception of anywhere to change, and certainly Victoria, mostly I think driven by their pushing back on oil and gas and mineral sands, had a quite a negative reputation on approvals. But they've really reformed their department. And certainly, I think that you know, we had a tailing stamp here approved from application to thing in 9 months, alright, so that's quite, quite quick. They're certainly doing that, I think. The work that Southern Cross are doing with the regulator, they'll, they'll almost certainly get approved as well, right, so both of these things will give confidence into the marketplace. So the Victorian government is incredibly proactive, and I think their balance sheet as a state would encourage them to seek investment. If people can read into that, yeah, yeah, so, so, certainly across the three jurisdictions we operate and we also have, you know, work out of Western Australia, Victoria and New South Wales are really, really similar. And Scandinavia as well. I think we all get you can't. Get the benefits of a tier one jurisdiction, infrastructure, trained people, etc. without the cost of that, and the cost of that is that you'll go through a rigorous approval process. On the bright side, once it's approved, the odds of someone taking it off you at gunpoint is really low. So that I consider to be a strength. Any other questions out there? One right there. yes, on, on your antimony deposits, are you actually, doing any, processing and refining, of those, and, do you have actual, Customers for those Oh yeah, yeah, we are, we are right now, the largest producer of antimony in the western world, and we have been for a long time. Other people will start over the next 1 to 2 years and will pass us. We produce an Antony and gold concentrate, contains about 45% antony by mass, contains about 2 to 5 ounces per ton of gold. That's bagged and shipped, predominantly that's sold into China at present. A lot of people are working on producing, you know, Western processing capacity, but as yet there's nothing of scale. But yes, we are producing and have been for a long time. It makes up about 3% of our revenue as an entire group, it makes up about 7% of the revenue of that site. But it goes to China. Yeah, predominantly, yeah. Yep. People that think, oh that's disgusting, you heathen. Where else would you have me send it? It'll just be sitting on a pile somewhere. So, and then if someone else wants to process it, show me the money, and you can have it. Thanks. That's all we have time for. Thank you very much.