On August 16, Alkane Resources (ASX:) published the test results of 10 more holes drilled in Boda. Although our estimate of the total mineralized stock in Boda has changed little as a result of this series of holes, probably their main consequence is the increase in the potential resource in the high-grade sulfide cemented breccia from c2.1Moz gold equivalent (AuE) to c3.5Moz. AuE above 3.0 g/t AuE. This is the result of the extension of this structure to at least 800 m (cf. 500 m earlier) from the interpretation of the test results of holes KSDD034 and 034W2, KSRC038D and KSRC042, and in particular KSRC043, which represents a 31 m intersection of surface with a degree of 2.94 g/t.
EPS estimates
Stock price performance
Stock price performance
First suspicion of a conceptual mine at Boda
The extension of the high-grade zone to 800 m offers the possibility of a continuous mine from the surface at Boda. Although it is still early, this could be in the form of a traditional open mine with a long hole. However, a sub-level or full cave can also be economical, both in the beginning and over time. , we expect Alkane to announce both a tighter, higher quality resource related to the sulfide cemented breccia in Boda, as well as one for the massive mineralized envelope (probably at an economic cut of c0.3 g/t). Initially, it is likely that the majority of delineated wells will fall into the inferred category, although we would expect this to be sequentially upgraded to higher categories with subsequent drillings.
Valuation: up to 130c per share
Our base case valuation of the expanded and expanded Tomingley operation is 35 Australian cents per share (cf. 32c earlier), to which (if unforeseen circumstances) a further 6c could be added for the eventual development of the Roswell underground extension and possibly 12c given the current gold price. To this total of 53c can be added an additional 4c to reflect the value of the remaining (unmined) resources plus 3c for continued exploration success at Roswell, San Antonio and El Paso to bring the total for the wider Tomingley operation to 60c (including cash). kept centrally). Beyond that, we value Alkane's holdings in Calidus and Genesis at 9c per share and the exploration completed so far in Boda and Boda Two within the Northern Molong Porphyry Project at 61c with enough blue skies left to bring the total to 130c ( see earlier 125c – see Exhibit 10).
Recent developments
Since our last comment, Alkane has: drilled in Boda, Boda Two and Boda Three at its Northern Molong Porphyry Project in Central West New South Wales in Australia, and
Has disclosed its financial results for the year to the end of June 2021.
This note updates our analysis of the company regarding both announcements. However, as underlying earnings for FY21 were within A$1.0 million (or 3.3%) of our earlier forecast (see pages 9-11), in this case, Boda drilling results have been prioritized, which, among others, have increased the vertical extension of the high-grade sulphide cemented breccia zone to a total of 800 m (cf. 500 m earlier) from the surface.
