Alkane Advances Near-Mine Kendal Deposit with High Grade Antimony-Gold Intercepts at Costerfield

Program Summary

Kendal Assay Highlights

Alkane Managing Director & CEO, Nic Earner, said: “The drilling results obtained from the Kendal deposit over the past year demonstrate the large potential remaining for significant high-grade mineralisation at shallow levels near to the Costerfield mine. Accessing and mining the newly defined mineralisation is a top priority for the Costerfield team and should provide the processing plant with an additional source of high-grade gold and antimony ore for some time to come.” 

Costerfield Deposit

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The Costerfield antimony-gold deposit was discovered in 1861. Antimony had already been identified in the district as early as 1853, as prospectors attracted to the McIvor (Heathcote) alluvial gold rush began to explore the surrounding hills for the primary deposits. Several lodes along a 3km corridor were rapidly opened up, the bulk of historical production coming from leases at the northern end of the field; the Costerfield (Main), Bombay and Minerva mines. Production from these mines primarily took place in two phases, between 1861-1883 and 1903-1924, and a short-lived attempt at redeveloping the mine occurred between 1933-1939.

Modern mining has been continuous since 2006, when Australian Gold Development (AGD) commenced underground operations at Augusta, at the southern end of the field. AGD’s Costerfield operation was purchased by Mandalay Resources in 2010, and extraction of the vertically continuous vein system has progressively moved north beneath the Costerfield, Minerva and Bombay group of mines, where the high-grade Youle and Shepherd lodes were discovered.

Mandalay Resources merged with Alkane Resources in 2025.

As mining of the underlying vein systems has progressed, it has been recognised that significant amounts of untested mineralisation remain at the level of the historic mines (within 300m of surface) both laterally and within the footprint of the workings. This is primarily due to the structural complexity of the ore system, which consists in places of sheeted vein swarms that can be difficult to interpret along strike without modern methods, including close-spaced drilling that was unavailable to the historic miners.

Figure 1. Regional map of the Costerfield Project in GDA grid showing Alkane tenements and the main corridors of mineralisation identified.

Deposit Geology and the Kendal System

The Kendal deposit (and the Costerfield mine) is located on the hinge and western flank of the north-striking Costerfield Anticline which forms the culmination of the Costerfield Dome. The Costerfield Anticline is asymmetrical with a steeply dipping eastern limb, and a gentle dip to the western limb. Numerous smaller scale parasitic folds and warps occupy the broad hinge zone, which often exhibit a weak axial cleavage or parting fabric in the host siltstone. It is this fabric which appears to be the dominant structural host or control for the Kendal veins.

Numerous bedding parallel faults, often containing early-generation laminated quartz veins bisect the system and act as a significant control on grade. Individual veins appear to be offset to the west with depth across these faults, although vein development clearly post-dates fault activity and often can be seen to run along the shallow-dipping faults in a healed manner. Down-dip, the Kendal mineralisation encounters a major west-dipping thrust fault and becomes Youle Lode, which persists downward until the thrust fault begins to shallow, at which point mineralisation breaks back out into a vertical vein system mirroring Kendal, called Shepherd. The Kendal system does not appear to persist into the eastern limb of the greater Costerfield Anticline, which is consistent with other vertical vein systems at Costerfield, potentially due to the lack of cleavage development and small angle between bedding and veining.

Figure 2. Geological cross section of the Costerfield gold-antimony vein system at mine northing 7200N, showing the Kendal vein system’s position in the Costerfield Anticline and its relationship with the below Youle and Shepherd veins which are currently mined.

2025 Drilling Program

When the upper portion of Youle Lode was first accessed in 2018 by Mandalay Resources, it was confirmed that the lode system was upwardly continuous, bifurcating and steepening over subhorizontal faulting to form the Kendal system. Over the period of mining, occasional diamond drill holes were placed through Kendal and the adjacent historic mines, which gradually built confidence that a significant amount of mineralisation still existed above the modern mining level. In September 2024, Mandalay Resources issued a TSX announcement, describing the first portion of the Kendal system (the 580 Vein) to be thoroughly tested with modern drilling. The drilling described in this update builds on that work and has tested along the length of the three main historic mines. The bulk of remaining mineralisation identified to date is located adjacent to the Minerva and Costerfield mines, although continuity of the system is demonstrated all the way through to the Bombay mine in the south.

Significant amounts of historical drilling have tested the near-surface portion of the Kendal system, including a campaign of RC percussion drilling conducted by Australian Gold Development in 1995-1996. These historic intercepts have not been verified or validated by Alkane, and their positions are displayed in the release figures due to their relevance to the Kendal target area at height and are indicatory only as support to the geological interpretation.

Drilling Results

With the drill information to date in hand, a total of 25 individual veins have been delineated by Alkane through the Kendal system, building on historical modelling with the inclusion of this program’s drilling data, providing linking intercepts between the three historical mines, and significant extension for some. The Kendal veins extend over a strike of 600m, and some individual veins can be traced for most of this length, for example the 520 vein, which has been interpreted over a length of 500m, with up to 200m of vertical extent. The width of the Kendal system averages around 70m for much of its strike.

The antimony content of the Kendal system, as tested in the program, is significantly higher than that of the Shepherd system, which is a main source of ore for the Costerfield operation, and also demonstrates very high gold content (refer to Appendix 1 for a complete list of significant intercepts from the current drill program).

Many exceptional intercepts were achieved during the program and integrated into the Costerfield geological model. Below are some highlights in addition to those stated above:

The 501 vein, which is near modern infrastructure and has recently been accessed for mining, hosts many of the recent (and earlier, unreported) standout intercepts. In addition to the above, several other highly promising intersections were recorded adjacent to the modelled veins:

It is anticipated that these intercepts will be integrated into the existing geological model as future drilling adds additional context.

Figure 3. Costerfield / Kendal area plan view with major Kendal vein best fit traces displayed (green), cross section positions (yellow lines), 2025 drill traces and >10g/t AuEq intercepts labelled. Historic Kendal intercept positions are shown as faded circle.

Figure 4. Long Section of the Kendal 501 Vein with high grade assays highlighted. The lower portion of the 501 vein has already been accessed by Alkane, and diluted face grades are shown alongside drilling intercepts.

Figure 5. Long Section of the Kendal 520 Vein with high grade 2025 assays highlighted. The section shows the strong continuity of the Kendal system outside of the historically mined sections, both vertically and along strike.

The veins are dominantly single-generation, typically consisting of quartz and carbonate, grading to massive stibnite towards the centre line of the veins. Gold can be coarse and present in any part of the vein, and “rusty” gold is often noted, colloform free gold left after the chemical breakdown of the mineral aurostibite, which is common at Costerfield. The veins are surrounded by a narrow (>2m) wallrock sulphide alteration of pyrite and arsenopyrite.

Figure 6. Drill core photos from BC418 (590 Vein) showing the nature of veining with individual assay grades of the samples. Composited interval graded 13.6g/t gold and 16.4% antimony over 2.22m (ETW 1.37m).

Figure 7. Photo of drill core from BC463 (520 Vein) showing the sheeted nature of the ore veins. Note the oxidised interval adjacent to the intercept signifies an historical stope adjacent to the in situ high-grade veins. Composited interval graded 143.7g/t gold and 10.8% antimony over 1.35m (ETW 1.06m).

Figure 8. Cross section looking north at mine northing 7120N showing Kendal veins in cross section and drill intercepts between 7000N and 7135N. 2025 drill intersections grading over 10g/t AuEq when diluted to 1.8m are labelled. The historic Costerfield Main shaft and workings can be seen centred at 15,500E, and the modern Alkane development offset to the west and depth. Note the average depth of the Kendal mineralisation ascends to the north with the plunge of the anticline.

Figure 9. Cross section looking north at mine northing 6780N, showing Kendal veins in cross section and drill intercepts between 6750N and 6825N. 2025 drill intersections grading over 10g/t AuEq when diluted to 1.8m are labelled. This northing passes through the old central Minerva mine and shows the sheeted nature of the east-dipping Costerfield, Minerva and Bombay (540,541 and 542) lodes, in contrast to the northern end of the system where the Costerfield lode is the most significant east-dipping vein.

Future Plans

Geological modelling and interpretation of results are ongoing, subject to reporting a mineral resource in respect of the Kendal system, the Company intends to work towards integrating those mineral resources into the Costerfield resource and life-of-mine plan in the near future. Early confidence in the southern portions of the tested veins led to the internal decision to begin access development from existing infrastructure late in 2025. Further drilling of the Kendal system is warranted, including on the underexplored Costerfield Main reef to the east of the historic mine. Currently, near mine drilling is focused on the south of the field, where the recently discovered Brunswick South deposit is being drilled alongside extensions to the Cuffley deposit. Drilling at Kendal is expected to resume in 2026.

This document has been authorised for release to the market by Nic Earner, Managing Director and CEO.

ABOUT ALKANE ‐ www.alkres.com ‐ ASX:ALK | TSX: ALK | OTCQX: ALKRY

Alkane (ASX:ALK; TSX:ALK; OTCQX:ALKRY) is an Australia-based gold and antimony producer with a portfolio of three operating mines across Australia and Sweden. The Company has a strong balance sheet and is positioned for further growth.

Alkane’s wholly owned producing assets are the Tomingley open pit and underground gold mine southwest of Dubbo in Central West New South Wales, the Costerfield gold and antimony underground mining operation northeast of Heathcote in Central Victoria, and the Björkdal underground gold mine northwest of Skellefteå in Sweden (approximately 750 km north of Stockholm). Ongoing near-mine regional exploration continues to grow resources at all three operations.

Alkane also owns the very large gold-copper porphyry Boda-Kaiser Project in Central West New South Wales and has outlined an economic development pathway in a Scoping Study. The Company has ongoing exploration within the surrounding Northern Molong Porphyry Project and is confident of further enhancing eastern Australia’s reputation as a significant gold, copper and antimony production region.

Competent Persons Statement

As an Australian Company with securities listed on the Australian Securities Exchange (ASX), Alkane is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act 2001 and the ASX. Investors should note that it is a requirement of the ASX Listing Rules that the reporting of ore reserves and mineral resources in Australia is in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and that Alkane's ore reserve and mineral resource estimates and reporting comply with the JORC Code.

Alkane is also subject to certain Canadian disclosure requirements and standards as a result of its secondary listing on the Toronto Stock Exchange (TSX), including the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). Investors should note that it is a requirement of Canadian securities law that the reporting of mineral reserves and mineral resources in Canada and the disclosure of scientific and technical information concerning a mineral project on a property material to Alkane comply with NI 43-101.

Unless otherwise advised above, or in the relevant ASX announcements referenced, the information in this announcement that relates to exploration results, mineral resources and ore reserves is based on, and fairly represents, information compiled by Mr Chris Davis, who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Alkane Resources Limited. Mr Davis has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as a Competent Person as defined in the JORC Code and as a Qualified Person under NI 43-101. Mr Davis consents to the inclusion in this announcement of the matters based on his information in the form and context in which they appear. The information in this announcement that relates to previously reported exploration results, mineral resources and ore reserves is extracted from the Company’s ASX announcements noted in the text of the announcement and available to view on the Company’s website. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original announcements and that, in the case of estimates of mineral resources or ore reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

Technical Reports released to the TSX or for TSX Market

The NI 43-101 compliant technical report titled ‘NI 43-101 Technical Report, Costerfield Operation, Victoria, Australia’ and dated 28 March 2025, with an effective date of 31 December 2024 supports the information contained herein and is available on the ASX and under Alkane’s profile on SEDAR+ at www.sedarplus.ca.

Reference should be made to the full text of the foregoing technical report for the assumptions, qualifications and limitations relating to the Mineral Resource Estimates and Ore Reserves contained therein and herein. All material assumptions and technical parameters underpinning the estimates in the technical reports continue to apply and have not materially changed.

Cautionary Note Regarding Forward-Looking Information and Statements

This announcement contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation and may include future-oriented financial information or financial outlook information (collectively Forward-Looking Information). Actual results and outcomes may vary materially from the amounts set out in any Forward-Looking Information. As well, Forward-Looking Information may relate to: future outlook and anticipated events; expectations regarding exploration potential; production capabilities and future financial or operating performance, including AISC, investment returns, margins and share price performance; production and cost guidance and the timing thereof; issuing updated resources and reserves estimate and the timing thereof; the potential of Alkane to meet industry targets, public profile and expectations; and future plans, projections, objectives, estimates and forecasts and the timing related thereto.

Forward-Looking Information is generally identified by the use of words like "will", "create", "enhance", "improve", "potential", "expect", "upside", "growth" and similar expressions and phrases or statements that certain actions, events or results "may", "could", or "should", or the negative connotation of such terms, are intended to identify Forward-Looking Information.

Although Alkane believes that the expectations reflected in the Forward-Looking Information are reasonable, undue reliance should not be placed on Forward-Looking Information since no assurance can be provided that such expectations will prove to be correct. Forward-Looking Information is based on information available at the time those statements are made and/or good faith belief of the officers and directors of Alkane as of that time with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or suggested by the Forward-Looking Information. Forward-Looking Information involves numerous risks and uncertainties. Such factors include, without limitation: risks relating to changes in the gold and antimony price.

Forward-Looking Information is designed to help readers understand Alkane’s views as of that time with respect to future events and speak only as of the date they are made. Except as required by applicable law, Alkane assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the Forward-looking Information. If Alkane updates any one or more forward-looking statements, no inference should be drawn that the company will make additional updates with respect to those or other Forward-looking Information. All Forward-Looking Information contained in this announcement is expressly qualified in its entirety by this cautionary statement.

Disclaimer

Alkane has prepared this announcement based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions or conclusions contained in this announcement. To the maximum extent permitted by law, none of Alkane, its directors, officers, employees, associates, advisers and agents, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it.

This announcement is not an offer, invitation, solicitation, or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this announcement nor anything in it shall form the basis of any contract or commitment whatsoever.

APPENDIX 1 – Tabulated Drilling Results

Significant intercepts from the Kendal drilling program at Costerfield

Price assumptions are:

Recovery assumptions are:

The Au recovery assumption and Sb recovery assumption is based on established processing and sales in respect of Costerfield.

It is the Company’s opinion that all elements included in the metal equivalent calculation have a reasonable potential to be recovered and sold.

2.   Composites that are not interpreted to be connected to a named vein and are below 2 g/t AuEq when diluted to 1.8m are not considered significant and are not recorded here.

Drill hole collar details from modern Kendal drilling at Costerfield:

Notes:

Appendix 2 - JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

Section 2 Reporting of Exploration Results

Criteria listed in the Section 1 also apply to this section.

CONTACT:  NIC EARNER, MANAGING DIRECTOR & CEO, ALKANE RESOURCES LTD, TEL +61 8 9227 5677
INVESTORS & MEDIA:  NATALIE CHAPMAN, CORPORATE COMMUNICATIONS MANAGER, TEL +61 418 642 556

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