Multi-commodity mining and exploration firm Alkane Resources has opened the A$116m ($105m) Tomingley gold mine in New South Wales (NSW), Australia.
NSW Minister for Resources and Energy Anthony Roberts opened the mine, which is located 14km north of Alkane's inactive Peak Hill gold mine and about 50km south-west of Dubbo, Tomingley.
The mine started operations in February this year following its first gold bar pour and the commissioning of the processing plant.
The project is anticipated to achieve design capacity by the end of April and is expected to produce between 350,000oz to 400,000oz of gold over a seven and a half years mine life.
Yearly cashflow is expected to be around A$20m to A$25m at current gold prices, based on yearly production of 50,000oz to 60,000oz of gold.
Alkane has executed a gold hedge of 25,000oz at A$1,449 for delivery on 16 May with Credit Suisse International, with physical gold to be delivered into the hedge or rolled into a series of forwards, depending on the spot price at maturity.
The original feasibility for the project is based on the three gold deposits of Wyoming One, Wyoming Three and Caloma.
Further exploration at the Caloma Two deposit has added a further 109,300oz of gold to the resource inventory, and additional development of potential underground operations may extend the mine life to ten years.
Alkane Resources managing director Ian Chalmers said: "Delivering Tomingley on time and on budget, funded without debt, is a reflection of Alkane's capabilities and, with Tomingley now in production, surplus cashflows generated can be used to fund the company's exploration / development projects and corporate expenses, and to assist with the financing programme for the A$1bn Dubbo zirconia and rare earths project."
Image: Tomingley gold mine is anticipated to achieve design capacity by the end of April. Photo: courtesy of Alkane Resources.