Alkane Resources Strikes Gold at Depth: High-Grade Intercepts Spark Expansion Hopes at Tomingley

Key Highlights:

• Multiple high-grade gold intercepts reported at Caloma One and Roswell deposits
• Tomingley underground drilling reveals 3.1m @ 196.95g/t Au and 58m @ 11.59g/t Au
• Expansion potential may drive future resource updates and long-term production
• Strong insider ownership at 29.4%; Simply Wall St rating 4/6 for growth

Alkane Resources Ltd (ASX: ALK) has released a set of robust drilling results from its Tomingley Gold Operations in Central West New South Wales, indicating significant potential for resource growth and long-term production upside. Shares of Alkane closed at A$0.61 on Monday, down 6.15%, yet the market may be overlooking the strategic significance of these new high-grade intercepts.

Underground drilling at the Caloma One and Roswell deposits continues to unlock deeper, high-grade zones previously outside existing models. A highlight from Caloma One includes hole CL1UG253D, which intersected 3.1 metres grading an extraordinary 196.95 grams per tonne (g/t) gold, including a peak assay of 589g/t over one metre. At Roswell, drillhole ROSUG513D returned 58 metres at 11.59g/t, with a five-metre stretch averaging 82.51g/t—an intercept that would turn heads in any global gold district.

These results form part of an aggressive underground diamond drilling campaign aimed at expanding the current resource base and refining mine planning. At Caloma One, 71 holes totaling over 15,000 metres targeted new lodes adjacent to existing operations, confirming a network of mineralised structures across multiple zones. Notably, several intercepts exceeded 25g/t Au over substantial widths, reinforcing the area’s potential as a long-life underground producer.

Managing Director Nic Earner emphasised the upside embedded in Tomingley’s geology: “Most of Tomingley’s deposits remain open at depth and along strike. This drilling further demonstrates the significant resource expansion potential across the mine site.”

The Roswell deposit, part of a 1.5-kilometre-long mineralised trend, is undergoing systematic infill drilling from the 1010-level platform. Thirteen holes covering 2,395 metres have been reported so far, delivering wide, high-grade zones, such as 64.9m @ 2.82g/t (ROSUG516D) and 47m @ 5.07g/t (ROSUG521D). These results will directly support future reserve updates and underscore the consistency of mineralisation across Tomingley’s underground extensions.

Since first gold production in 2014, Tomingley has transitioned from open-pit to underground mining, with infrastructure in place to support a 1Mtpa processing facility. Current mining activities span several deposits including Caloma Two, Wyoming One, and Roswell, with ongoing efforts to develop an integrated long-life operation. Alkane is already assessing the economic potential of incorporating the new Caloma One lodes into its reserve base.

The technical success at Tomingley also complements Alkane’s broader ambition to become a multi-asset gold and copper producer in Australia. The company’s long-standing exploration credibility—highlighted by its Boda discovery in 2019—positions it well to leverage gold market volatility and maintain operational momentum well into the next decade.

Growth Backed by Financial Momentum and Market Signals

Beyond exploration success, Alkane’s fundamentals are catching the eye. According to Simply Wall St(Source: Hyperlinked), the company earns a 4 out of 6 growth rating, supported by a projected 49.3% annual earnings growth rate, far outpacing the broader Australian market. Despite today's dip in share price—down 6.15% to A$0.61, with a 52-week range between A$0.38 and A$0.715—Alkane is trading significantly below its estimated fair value, presenting potential upside for investors seeking value in the gold sector.

The company reported A$121.5 million in sales and A$13.16 million in net income for the half-year ending December 2024. Gold production was up year-over-year, though profit margins declined, reflecting a more competitive cost environment.

Insider confidence remains high, with insiders holding 29.4% of shares, suggesting strong alignment with shareholders. Alkane’s market cap currently stands at A$369.38 million, making it a mid-tier producer with room to scale.

As global gold prices flirt with historic highs and investor appetite for quality mid-tier producers strengthens, Alkane’s disciplined, results-driven approach at Tomingley offers a compelling narrative. The next resource and reserve update could serve as a catalyst—especially if further drilling confirms the continuity of these newly identified high-grade zones.