Costerfield’s JORC Debut: What Mining Risks Lurk Despite Robust Reserves?

Introduction to Costerfield’s New Resource Statement

Alkane Resources Limited has released its first-ever JORC-compliant Mineral Resources and Ore Reserves statement for the Costerfield Property as at 30 June 2025. This milestone report confirms a total Mineral Resource of approximately 1.7 million tonnes grading 7.9 grams per tonne (g/t) gold and 2.3% antimony, alongside Ore Reserves of 537,100 tonnes at 8.7 g/t gold and 2.0% antimony. The company has demonstrated a mine life extending to 2030, underpinning the operation’s long-term viability.

Resource Highlights and True Blue Discovery

The Mineral Resource estimate includes measured, indicated, and inferred categories, with measured and indicated resources totaling 1,162 kt grading 8.0 g/t gold and 2.6% antimony. Notably, the recent discovery of the True Blue Deposit adds a significant inferred resource of 145,000 tonnes at 13.1 g/t gold and 3.1% antimony, equivalent to 96,000 ounces of gold equivalent at a grade of 22.6 g/t. This discovery represents a meaningful step in reinforcing the resource base and future production potential.

Geological and Operational Context

Costerfield is situated in Victoria’s mining district near Heathcote and has been operational since 2006. The underground mine sources ore from multiple lodes including Augusta, Cuffley, Brunswick, Youle, and Shepherd. The operation benefits from a conventional flotation processing plant with a capacity of approximately 150,000 tonnes per annum. Alkane’s extensive drilling and sampling programs, supported by rigorous QA/QC protocols and independent reviews by SRK Consulting, have ensured the robustness of the resource and reserve estimates.

Mining and Processing Methodologies

The Ore Reserve estimation is based on long-hole stoping with cemented rock fill, a method well-suited to the narrow vein geometry of the deposit. Mining designs incorporate dilution and recovery factors derived from operational data, ensuring realistic production forecasts. The Brunswick Processing Plant has been operational since 2007 and has undergone upgrades to improve throughput and recovery, with gold and antimony recoveries forecast at approximately 92% and 90%, respectively.

Economic Viability and Market Outlook

Economic evaluation confirms the Ore Reserve mine plan’s robust net present value (NPV) under current commodity prices, with gold priced at US$2,100 per ounce and antimony at US$16,000 per tonne. The report acknowledges the recent surge in antimony prices driven by Chinese export restrictions, which tighten global supply and support a bullish outlook for antimony. Alkane’s marketing consultant anticipates continued strength in international antimony prices, enhancing the project’s economic prospects.

Governance and Forward-Looking Considerations

Alkane has implemented strong governance and internal controls over resource and reserve estimation, including board approvals and independent technical reviews. While the mining lease is due for renewal in 2026, the company expects renewal to proceed without impediment. Investors should note that commodity price volatility and geotechnical risks inherent in underground mining remain factors to monitor as the operation progresses.