At Alkane Resources, we're a gold producer and explorer based in Australia and listed on the ASX. We have two main pieces to our company: we have a producing asset, Tomingley, and we have the large Boda porphyry gold-copper deposit. The location that we're talking about is about a four-and-a-half-hour drive west-northwest of Sydney, so in the region that has Cadia, North Parkes, Cowal, etc. So Tomingley is a mine that we discovered and then developed through 2013; it's been operating since 2014. I'll tell you a fair bit more about that and its history and the future we have going for it. We're going to do about 70 to 80,000 ounces this year, and we have a continued capital growth program to go through to 100,000 ounces, and we're in a cash flow generating position. And Boda porphyry, two-thirds of it indicated, 50 million equivalent ounces in that deposit. So let's talk more about both of those assets. Firstly, our company's corporate profile.
The share price today — I did this as I was leaving Australia — the share price today is about 68, 69 cents, which lifts the market cap above 400 million Australian. I'm always talking Australian dollars here. So we're just reconciling the end of our quarter, but at the end of December we had, you know, circa $40 million. We expect that to go up $8 to $10 million this quarter as we finalize our accounts for the quarter, and we have a debt position of $45 million to Macquarie Bank and Equipment Finance. Of the remaining that you see there, $8 million, and what that does give us is an out-of-the-money hedge position. So in March 2023 we took out this debt, and so we have 75,000 ounces — we've just paid 6,000 of that off just as the quarter ticks over — so approximately 70,000 ounces well out of the money at 2,850. That's a third of our production, so a third is locked at that price, which is still profitable for us above our cost of production, and two-thirds we get the current Australian gold spot price. We're well covered by brokers, so you can look up quite a bit of research on us. And if you look there, directors and management, 20%, 18% of that is our chairman, Mr. Gandel, a businessman based in Melbourne. And the institutions we have mostly index funds; the GDXJ makes up about 13, 14% of the register.
Recent highlights for us: we have been going through a two-year capital program extending into a new mining area, and what this says is we've finished that, finally turned the corner, and we've started ramping up production and increasing our recovery. So let's have a look at Tomingley. Pictures: top left is the open cut pit that we originally had working, and the portal is just — you can see the ramp coming down into the portal there, guys working underground, and our processing manager Veron is standing on the new flotation circuit we put in to improve recovery. So Tomingley, if you look at that area, the grey area to the top right, the bottom left of those is the pit that we were just looking at in the picture. So we have a new tailings dam to the south, so we have over five years of tailings dam storage there, so we're in great shape. That's a new dam that we've built, and then we have an underground drive going from Wyoming all the way down to the San Antonio and Roswell resources, and it's that increased grade in that new resource that sees us move up steadily in production. And then when the open pits at San Antonio come online, that's what moves us through to 100,000 ounces. So you can see that production there. At the moment we're about a 70-odd thousand ounce mine, but we're ramping that production up further. And the most important thing to stress is that we're now cash flow positive again. So we've spent two years investing in this new mining area, which has years ahead of it, and so we're now cash flow positive again. So we'll start to see the cash balance rise, which, you know, ourselves and a lot of our investors have been waiting for.
This is a side schematic of those ore bodies, gives you a bit of an idea of the new tailings dam there that you can see. You can see the existing pits, and then our underground decline that took us approximately two years to put in, and then where the majority of our ore at the moment is coming from the Roswell underground. And happily, that's a higher grade ore body than we've typically mined inside the sort of U areas to the right of screen that you see. So this is where we've spent the better part of, you know, $150 million, as well as that underground decline. We've put in the new paste plants, we get full ore recovery underground at Tomingley. We now have a fine grind circuit that we grind down to 12 micron, lifting our recoveries by 7%. We're moving a highway to enable that open cut to be developed, and then once the highway's moved, we kick into those open cuts, and that lets us go to one and a half million tons per annum. So if you look at that, and I'll dive into a bit more detail.
Top line is our production range quarter on quarter. March, we're lining up to meet the bottom end of that period — bottom end of that range. Mill tons, we're on track. Head grade, you can see the head grade rising as we bring the Roswell online. That recovery lifting as our flotation and fine grind starts up, and our sustaining capital is really falling away because we've done a lot of sustaining capital and starting the new mine area at Roswell. And so that's what's driven our cost at being at two and a half thousand Aussie per ounce roughly this financial year, but next financial year that really falls away as the Roswell production and grade ramp up. And the growth capital you see is us — majority of that is moving this highway that we're talking about. There's no doubt that the strong tailwind of high gold price is of course helping our balance sheet through this period of time, so it enables us to do all this and continue to generate cash.
This gives you a bit of an idea of the Roswell underground. Doesn't mean a lot, except I really want you to have a look at those red scattered dots in and around the ore body. You know, I have a release that we're currently finishing with sort of extensional drilling and stuff in and around here as well that'll come out within the next week. But you can see that this is an ore body that keeps extending, and that's the nature — we drill this from surface. This is approximately 450m below surface. We drilled it from surface, and we keep expanding this ore body and extending the mine life. We have a whole heap of new underground equipment. This is the new diesel-electric Cat 2900 loaders that we have running there, so we have a reasonable amount of automation on each bogging level. This is the paste plant that we installed, you know, running up — that's running up the conveyor. We have infrastructure underground, we have dual line paste holes, etc. So we're getting 100% ore recovery from within Roswell, which is fantastic. This paste plant is oversized for us, so because, as you know, paste, you know, affects your mining sequence, so typically this gets about 50 to 60% utilization.
We have a vast — well, not vast — we have a road network that joins it up. It's — it's fast for us where we've — beside the new highway there, and so we already have the infrastructure in place ready to haul ore and a pipeline for the open cuts. And this is the new circuit that we just put in, which has been commissioned, where it's an IsaMill there grinding down to 12 micron. In our ore body we have a section that's — we have a section that's refractory, about 3, 4, 5%, and then we have a section that is bound. And we found that when we went to the new Roswell ore body, our recoveries, you know, we were expecting to move from sort of 87% down to 82%. And so by grinding down to 12 micron, increasing liberation, and then running that flotation concentrate through our conventional CIL circuit, that allowed us to lift up by 7%. So it was well worth the money when you consider that we've got 700,000 ounces in reserve ahead of us.
We definitely have production beyond the current plan. So I've released sort of a five-year look ahead, but we have beyond that — it just depends on what areas we discover as to where it comes. And to give you an idea, this is under the existing mine, and those new lodes that we have there, there's nearly a year's production in that at close to 3g per ton. That'll get incorporated into the reserve going forward. So it's a mine that we — when we started, we had seven years. We thought, you know, the original plan was to start in 2014, closing in 2021. It had 378,000 ounces in the original plan. We've already poured 650,000 ounces. We've got another 700,000 ounces ahead of us. It's not an uncommon phenomenon in small mining operations, but ours is certainly going great.
I'll tell you about the copper-gold porphyry, and, you know, I can take a lot more questions or grab me outside about Tomingley. This porphyry, 15 million equivalent ounces in resource. It's a calcalkaline porphyry. This is about 70km to the east of our existing operation. I'm not saying there's synergies, just helping you place it. It's still in that location in New South Wales, about 110km north of Cadia. That's all the drilling in a full cross-section there. We've done 260km worth of drilling, and of that 15 million ounce equivalent, about 10 million ounces is indicated and 5 million ounces is inferred. The grade's roughly 32, 33 for gold and just under 2% copper is what drives that. So we did a scoping study, or a PEA for Canadians. This is at $4,600 gold, and you can see that the capex here, 1.8 billion. It's a large project. We'll obviously need a larger partner in the years to come to do it, but, you know, reasonable production rate, reasonable IRR. Obviously the price is helping to drive that.
So what does this mean? This means that we're encouraged to go through the approvals process. So right now we have — this is the preliminary pit designs, obviously scoping level, and so we're commencing the environmental studies because I think everybody understands there's heaps of great geological resources around the world, but getting them approved and allowing them to therefore come into production is one of the largest challenges. It's becoming potentially even a larger challenge than the very discovery of them itself. So we've commenced that approvals process. We've started the environmental studies. We'll collect two and a half years of baseline data, and then we'll put in our submission to the government in order to take and get that approved. So this is the kind of thing that we want to have applications in for approval in three years' time, and then that's typically a two-year approval process beyond that, and then we'll see where we're at, going, you know, find a partner that wishes to develop this project with us.
So if I recap, what are we going to do? Clearly, we're just going to get on with the business of mining and generating cash and expanding our operation. There's bedding down and efficiency to do there. We're going to continue to do the environmental studies at Boda, but as well as that, we have historically and continue to look at inorganic growth opportunities. We would very much like to acquire, merge, some sort of relationship with someone who can come into production in 2026, 2027, in medium-term growth where we can match our cash flow to build a larger company or to merge with another existing producer. We're of the view that a larger company with increased liquidity is more attractive to investors, and we very much want to be part of that story as it occurs within Australia or potentially even overseas. So, you know, continue to watch this space. We're very, very actively looking at opportunities there and engaging with others seeking opportunities.
So summary: we've got a project, Tomingley. We've got capacity to go and get projects explored and developed. We've had plenty of major project approvals done in Australia — is a simple but, you know, time-consuming and difficult jurisdiction to have approvals in, and we have a track record in that. We're cheap versus our peers on a lot of the metrics, but the main reason for that is we've been spending money when others have been making it. But now we're going through a cash inflection point and we'll be making money as well. So encourage you to check us out, put us on your watch list, and drop me a line or grab me later if you've got any other questions. Thank you.
