Thanks Daniel, and good day everyone, particularly those watching online or the recording later on in proceedings.
Let me talk about Alkane. We've completed our merger with Mandalay Resources, and so as you can see from the opening slide, we now have three areas, but principally the ASX ALK, TSX also ALK, and on the OTCQX ALK.
So, a broad appeal. A lot of people still trading on both exchanges. So, I encourage you to continue to do so if you're an existing or interested shareholder.
This presentation, the disclaimer, are available online.
So, now that this merger is completed, which was on August the 5th, I'd like to tell you about where we're taking Alkane going forward and the production and cash profile that we're going to be.
So the first thing to note is, were we already merged last year, then we would have done 161,000 ounces equivalent.
This year our guidance is 170 to 175,000 ounces equivalent. That's going to come from three mines: Costerfield and Tomingley in Australia, and a mine, Björkdal, in Sweden. I'm going to talk about all three of those assets, but one thing that certainly happened post the merger is that our capital market position has significantly improved. Our market cap's trading 1.4, 1.5 billion Australian dollars, so getting very close to that billion US at present.
We've been confirmed as going into the ASX 300, well into that index in September, and there has been some index buying occurring. And yet to occur is the GDXJ reweighting that should come out later this week. But most importantly, our share liquidity has gone right up. Across this month, it's been sort of 8 to 10 million Australian dollars and over a million dollars Canadian on the TSX. So a lot of liquidity, and the shareholder base is rapidly diversifying.
But what I really want to point out to you all, and I'll hopefully make clear in this presentation, is we have a very powerful platform for growth. We finished at 30 June combined with a bit over 200 million Australian in cash and debt, and we've since paid down that debt, and so I'll talk about the cash balance. We approximately make 25 million Australian a quarter, and we're doing a lot of investment in both our existing mines as we position for the future, as well for other M&A, and we've got a board that can do that. We've got the Mandalay board and the Alkane board members coming together from each, with a new chair, Andy Quinn, ex-CIBC, ex-RBC, and LBMA.
So let's have a look at where these assets are. Tomingley, it's about a four-and-a-half-hour drive west-northwest of Sydney. This year it's going to do 75 to 80,000 ounces. I'll talk more about that.
Costerfield, which produces both gold and antimony, it's in fact the largest Western producer of antimony in the world. It's going to do sort of 45 to 51,000 equivalent ounces. And Björkdal in Sweden going to do 40 to 50,000 ounces this year. You can see we've got a pretty strong reserve base, one and a half million ounces, and then of course a massive resource base if we talk about the Boda-Kaiser project, but quite a significant resource base without it.
So let's get into a little bit more to unpack what I've described in the overview. This is last year. Last year as a merged entity, you can see building nearly 25 million cash per quarter, finishing an incredibly strong cash position, and that's despite, this is in the bank balance, that's after growth, after sustaining capex, after tax, and we expect a similar and yet improved position for this coming year.
This is our guidance for the coming year. Let me point out a couple of things. Firstly, Tomingley, the large growth capital that you can see there is us moving a highway, and I'll describe what that brings us: two open cuts.
Costerfield, the large growth capital is predominantly exploration expenditure that should bring us much longer mine life there. And at Björkdal, the very high sustaining capex, nearly 50 million Australian, is to open up mining areas and recycle equipment to improve the mining rate from that asset and therefore lower the all-in sustaining cost.
So like I said, our cash is building despite the high growth I just talked about. One thing to note is from that position we'll generate roughly 25 million bucks a quarter, and then the hedging position we have rolls off in June 2027, and then we add another 20 million Australian per quarter at current prices to that. So we'll be generating close to 50 million a quarter.
Then we have a lot of discoveries that I want to talk to you about that can extend the mine life and increase the production rate. Let's talk Tomingley first. That's a picture of the processing facility. It's a standard CIL facility with a fine grind circuit that takes a flotation con and grinds it down to 12 micron.
So Tomingley had four open cuts and has transitioned to underground. It's underground, the pictures that you just saw, and then another deposit about 2 km to the south that I'll be showing you on the next slide. It has a million tonne per annum CIL that we often run at 1.1. We're actually running at 1.3 at the moment. We've got the permit to expand it further should we wish. Decent reserves, decent resource, and a steady producer.
We've finished a pretty big capital program there. We've got a new paste plant above the Roswell deposit. We've got a flotation and fine grind circuit. One of the tensions we have at Tomingley, we previously intended to do slightly more ounces in the next 12 to 24 months, is like many producers, we've slightly lowered our cut-off rate and we're taking things at the extremities of the Roswell orebody, which is slightly lowering our ounce forecast, but certainly increasing the life and long-term profitability of the operation.
But what I want to talk about is we're actually moving a highway. The highway runs damn near right over the top of Roswell, San Antonio. That highway is being moved, and the first thing we're doing is developing those two open cuts at San Antonio. That brings 250,000 ounces from an open cut, which helps us keep the all-in sustaining cost down lower.
And at Roswell, we're mining underground at the moment. There's a paste plant that feeds that underground orebody that's open at depth, and it's our most exciting area apart from in between the two orebodies for exploration. So, we have a seven-year mine life here at this run rate. We're really looking to extend it further and potentially increase if that capital makes sense.
Looking at Costerfield, this is a very, very high-grade mine. It does 140,000 tonnes per year, quite low, but it does that at typically around the 12 g per tonne equivalent.
This year it's only going to do around 800 to 900 tonnes of contained antimony, which is part of that equivalence, but it's in a 45 to 50,000 ounce range at the all-in sustaining cost I showed you earlier, in the sort of $2,300 to $2,400 Australian per ounce. This has a reserve life that we're looking to extend. So we have Costerfield Deeps, Brunswick South that I'm going to show you.
So this is what we're looking to do with the capital there. We're putting money in drilling off the existing infrastructure. You can see it runs Brunswick South where we get some very high-grade intercepts that are very typical. So we often get 2 g over, I mean, sorry, 2 oz over half a metre, 3 oz over 20 cm, and so on. And when we then publish diluted grade, it's diluted grade over a 1.88 m stope width that we end up with, we end up with that 12 g per tonne head grade.
But one of the most interesting things, something that we're pretty excited about, is this True Blue discovery. If you look at the picture on the right, that is over the better part of three and a half kilometres, the entire history mining since 2009 under Mandalay control. And about 1.88 km to the west of that, we have the True Blue discovery, and you can see very typical again, ounce over a couple of metres, several ounces over half a metre. It's very high grade, and interestingly higher in antimony, so we should see our antimony rise.
So what we're doing here, we've got between three and four drill rigs depending on sequencing. We're spending the better part of 25 million Australian dollars across this mine to increase reserve life and also to really cement in where we want to put the infrastructure as we drive across from Uley across to the new orebody. So we expect to be driving across there in about 12 months from now, and we've started the permitting processes.
People, when we say permitting process, often worry, but Victoria accelerated through it. It took us only seven months to get our new tailings dam permit here at Costerfield, and you're talking a group of people at both Alkane and Mandalay who are very, very used to getting things approved. We've had several mines and mine extensions approved in New South Wales and Victoria across the last decade. So, we're really excited about that, and we look forward to bringing people a lot more about the True Blue discovery and Costerfield lifting its production rate in the near future.
Touch very briefly on antimony. Obviously, a massive, massive run in price. I certainly think that we're going to settle somewhere around the $20,000 per tonne because I think that is where the market was settling, bifurcated between Australia and, I guess I'll call it the not-Australia, sorry, China and the Western world, as China restricted antimony supply. But it's very, very difficult to tell. This is about 6% of our revenue, and very much enjoying the increased revenue at present. We're making hay while the sun shines.
A reminder again, Costerfield is the largest Western producer of antimony. Björkdal in Sweden, this has been running for the better part of 30 years. The large open cut you can see there ran simultaneously with an underground, and now it's just an underground mine.
So you can see that we've got quite a long reserve life at this 40 to 50,000 ounce range. If we want to move this to a 50 to 55,000 ounce producer or above, there's two ways that that happens. The first way is by increasing the mining rate, hence opening up new mining areas here, both through exploration and particularly just through mine development, which has increased sustaining capex and the equipment to go with that.
The second is we've done a lot of exploration for higher grades, and we find periodically, every couple of years, these Skellefteå discoveries where you can see you get very high grades over a small section. They can contain 20,000 ounces, 40,000 ounces, and then we mine those out of sequence. That doesn't mean the whole orebody is moving to that, but you certainly do get two or three years of higher production, and we're looking to bring one of those online at the moment.
And the other thing we're doing is at Storheden, which is into the picture as you see it, we've got another deposit where we want to open up a third mining front. So pretty exciting at Björkdal, and absolutely needed because this mine, long mine life, really efficient operators, power costs there are in the cents per kilowatt hour. So, but it's higher cost, and we want to increase that run rate to bring that cost down lower.
And you can obviously do the maths. You know, you move that by 10,000 ounces, 10,000 ounces should see a corresponding reduction of 25% in the all-in sustaining cost.
So we're pretty excited about what we're seeing at Björkdal as well. And within the tenement package as well, we have some open cut opportunities that we're looking to progress.
Last but not least is quite a large project we have in New South Wales, about 75 km from Tomingley, but would not be processed there, near Wellington. This is about 110 km north of Cadia. We call this the Boda-Kaiser deposit. We discovered that in 2019 after a lot of exploration in the area, drilled that out to indicated.
So by JORC standards, two-thirds of this is indicated. It's 14.7 million ounces equivalent. It's about a 0.58 g per tonne gold equivalent. You can see the scoping study results we did there. You can see the drilling. We've done sort of 260 km worth of drilling. The orebody goes down over 1.2 km. The tighter drilled areas you can see are where the indicated tonnes are, and then the other areas where the inferred tonnes are.
But the thing to point out is this scoping study, which was done a year and a bit ago. Back then the price was, you know, circa $3,800, $3,500. We updated that about six months ago for $4,600 an ounce. This is the $4,600 per ounce numbers that you see. So we can add another, you know, 800 on 4,600, we can add another billion plus dollars to that pre-cash flow just by looking at this on the current gold price. This will be developed one day.
We have an open cut and then an underground coming off from that. A very, very exciting prospect, but reality of this permitting process. We've got two years of baseline environmentals we've studied. Then we've got the application process in New South Wales. We want to get this approved inside four years. As I stated, Alkane as a company has had three major projects approved through exactly the same permitting process in the last 12 years. So, we're quite confident in our ability to do that.
And then we expect that we would be looking for joint venture partners to develop it, although we may of course have the capacity ourselves, but our natural state is to look for a joint venture partner. So, very exciting prospect that is lying dormant within our share price at present.
So if I look at the growth deliverables that we have as a management team and fresh board for this financial year, we're now a 1 July to 30 June financial year. So over the next 12 months, absolutely. We want to continue our track record of both businesses delivering on production. We want to consolidate the costs and drive those down at Björkdal. We expect to expand the mineral resources at each to at least replenish reserve.
Tomingley, it's all about making sure we deliver that new highway realignment. We expect that process will take 14 to 16 months. It's weather dependent, and then we'll start to develop the open cuts.
Costerfield will be putting in those permit applications before the end of the year and getting ready to develop and finalizing our feasibility for driving across to True Blue. Björkdal, we want to open up new mining areas and lift the mining rate as I just described. The environmental studies and corporate, we're just going to keep adding to the balance sheet and we continue to identify inorganic growth opportunities. Australia, New Zealand, USA, Canada, Scandinavia, we have centres of gravity in two, and then the existing Mandalay presence in North America that lets us look at some pretty good value assets in all of those locations.
So, let me wrap it up. We are absolutely an established producer. Mandalay, if you look at all three mines, one of them running since 2009 under Mandalay control, another running from the late 80s and picked up by Mandalay in the mid-teens. Alkane discovered, built, operated for 12 years at Tomingley. So, we're very much an established producer.
We're in the 160 to 175,000 ounce equivalent run rate. We expect to lift that to 180 and beyond over the next 12 to 18 months. Strong cash generation post all growth, post all tax. We expect to be generating, not this quarter because we've paid down the debt and we've got transaction costs, but from 30 September on, we expect our cash balance of Aussie dollars 130 to 140 million bucks at the end of this quarter. We expect to be growing that approximately 25 a quarter.
We have antimony exposure. It's only 6%, but we are still the largest Western producer, and we are the player that's actually doing things in this space. And we're putting a lot of money into growth, both for mine life extension and to increase production going forward to therefore lower the costs.
So thank you very much for anyone listening and for people online. You've got our contact details there for people to send through any questions if they wish, and enjoy the rest of the conference, everybody. Thank you.
