Nestled in the Peruvian Andes, La Rinconada is the highest permanent settlement on Earth, with its inhabitants living between 16,404 feet and 17,388 feet above sea level. Life in La Rinconada is extremely difficult due to the lack of oxygen, with inhabitants experiencing high altitude sickness, chronic mountain sickness, and other health issues. Despite these challenges, the town has remained a center for gold mining, attracting thousands of miners in search of fortune.
Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) reported its financial results for the March quarter, highlighting A$30.5 million in gold sales from its Tomingley Gold Operations and an updated mineral resource and reserve estimate for the Roswell Deposit, part of the Tomingley Gold Extension Project.
Gold production at Tomingley Gold Operations totaled 10,861 ounces, and the company sold 10,385 ounces of gold at an average price of A$2,933 per ounce, generating A$30.5 million in revenue. Despite lower recoveries, the company maintained its full-year guidance for Tomingley, expecting production between 60,000 to 65,000 ounces at an AISC of $A1,750 to $2,100 per ounce.
Alkane also released an updated mineral resource and reserve estimate for the Roswell Deposit within the Tomingley Gold Extension Project. The updated estimates include an open-cut resource of 3.9 million tonnes at 1.7 g/t gold for 213,000 ounces and an underground resource of 5.55 million tonnes at 2.7 g/t gold for 489,000 ounces. The open-cut reserve stands at 3.9 million tonnes at 1.7 g/t gold for 213,000 ounces, while the underground reserve is estimated at 3.209 million tonnes at 2.3 g/t gold for 237,000 ounces.
Alkane continues to progress its expansion capital works at Tomingley, with concrete works for the paste plant completed and the belt filter installed. Stope mining of ore at Roswell has commenced, and concrete works at the process plant flotation and fine grinding circuit are nearing completion.
Exploration activities continued at the Northern Molong Porphyry Project, with diamond core and RC drilling at Kaiser. The updated Kaiser mineral resource estimation is expected by the end of April 2024, followed by a scoping level assessment of potential project economics later in the quarter.
At the end of the March quarter, Alkane’s cash, bullion, and listed investments totaled A$41.1 million, with total liquidity reaching $91.1 million. The company also holds a 7% shareholding in Calidus Resources.
Calibre Mining has emerged as a strong contender in the precious metals sector, thanks to its successful acquisition of Marathon Gold and its ongoing operational success. The company is now in a prime position to capitalize on higher gold prices and continue delivering value to its shareholders.
In 2023, Calibre achieved record gold production and outperformed its guidance, demonstrating its ability to consistently deliver results. The company’s Libertad and Limon Complex assets have been major contributors to this growth, and the addition of the Valentine Gold Project promises to further boost production in the coming years.
Calibre’s cost management has also been impressive, with all-in sustaining costs (AISC) remaining below industry averages despite inflationary pressures. The company is on track to bring AISC below $1,250/oz once the Valentine Project comes online, which will significantly improve its margins and cash flow generation.
With construction at Valentine well underway, Calibre is expected to face higher capital expenditures in the near term. However, the company is well-positioned to manage this with its strong financial performance and recent equity financing. The expected free cash flow generation from Valentine’s commercial production will further strengthen Calibre’s financial position, enabling it to pay down debt and enhance its overall balance sheet.
While Calibre’s valuation has increased due to its recent share dilution, the company still trades at a reasonable multiple of 0.75x P/NAV. Its growth prospects and improved jurisdictional profile warrant a premium valuation, and at current levels, Calibre offers potential for strong returns if it continues to execute on its plans and capitalize on favorable market conditions.
New Found Gold (NFGC) has agreed to acquire the Kingsway gold project from Labrador Gold (NKOSF) in an all-stock deal. The acquisition will add to New Found’s existing Queensway gold project in Newfoundland and Labrador, providing the company with additional growth potential in the region.
