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Alkane Resources Is Leveraged To A Rising Gold Price At Tomingley

Alkane Resources' (ASX:ALK) economics at its Tomingley gold mine in New South Wales are set to be major beneficiaries of the strengthening gold price.

Tomingley is based on three gold deposits located 14 kilometres north of the company's previously operated Peak Hill Gold Mine, and 50 kilometres south west of Dubbo.

It boasts a base case life of mine production of 7.5 years which is estimated to total 350,000 to 400,000 ounces at an average sustaining cash cost of around A$1,000 per ounce.

Spot gold is currently A$1410 an ounce.

Yearly cash flow will be around $20 million to $25 million at current gold prices based on yearly production of 50,000 ounces to 60,000 ounces of gold.

This cash flow could rise substantially if the gold price trends higher.

In addition, additional exploration at the Caloma Two deposit has added another 109,300 ounces of gold to the resource inventory and further development of potential underground operations could extend the mine life to 10 years.

First gold pour was achieved on 14 February 2014 and the core focus of activities has been the maximisation of mining productivity, completion and optimisation of the process plant and overall production cost management.

The project was delivered on time and on budget under the leadership of managing director Ian Chalmers.

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