Alkane Resources (ASX: ALK) has increased the total gold resource at the Tomingley Gold Project in New South Wales to 811,700 ounces following a successful drilling campaign at the Caloma deposit.
The company has now defined a JORC Resource at Caloma of 5.45 million tonnes at 2.1 grams per tonne (g/t) gold for 811,700 ounces of gold, from the previous resource of 3.68 million tonnes at 1.8g/t for 218,300 ounces of gold.
This has lifted the overall resource at Tomingley to 12.59 million tonnes at 2g/t gold.
Caloma is expected to be one of three open cut operations within the Tomingley project, in addition to the Wyoming One and Wyoming Three gold deposits.
A new mine plan will be developed for Caloma, incorporating the upadated resource, and could see the mine life extended.
The updated resource was compiled by Richard Lewis of Lewis Mineral Resource Conuslting, who completed the original resource assessment for the Caloma deposit.
Earlier this month Alkane Resources announced a A$107 million partially underwritten capital raising that would support the construction and commissioning of the Tomingley Gold Project.
Alkane is targeting production at Tomingley in the first half of 2013, depending on the receipt of approvals.
A Definitive Feasibility Study for the project delivered production of 50,000 to 60,000 ounces of gold a year for an initial 7.5 years, and based on a gold price of A$1,700 per ounce the project should generate cash flow (EBITDA) of around A$250 million with an internal rate of return of 32%.
Funds from the raising will also go towards continued development of the Dubbo Zirconia Project.
Over the next two years, Alkane is planning to develop two significant resource projects in central west New South Wales which will have a combined capital expenditure of about $1 billion.
Development approvals pending
Alkane is awaiting development approval from the New South Wales Department of Planning and Infrastructure.
The response to submissions on the Environmental Assessment following public exhibition has been returned to the department.
In the meantime, Alkane is continuing to advance long lead time options such as the ball mill, production water supply, tendering for civil works and detailed design.