Drilling “for reasons other than finding gold” have given rise to the possibility of mining at the company’s Caloma prospect going underground.

Alkane’s managing director Ian Chalmers says geotech drilling, aimed at determining if rock at the edges of a proposed open pit mine at Caloma can “stand up over time”, revealed more “mineralisation” than expected.

“The amount of gold ... was a surprise,” he said.

Caloma itself was a welcome discovery in 2006 as Alkane dug even deeper at its nearby Wyoming One prospect in a bid to increase the Tomingley Gold Project’s (TGP) resource base and viability.

The definitive feasibility study for the project is scheduled for completion at the end of this month.

It will tell Alkane if it can profitably operate open pit mines at Caloma on one side of the Newell Highway, and Wyoming One and Wyoming Three on the other side.

While the company now knows of significant gold underneath the proposed open pits at Caloma and Wyoming One, it is focusing on the known resource of 840,000 ounces.

Mr Chalmers confirmed that Alkane, like other “primary producers”, was concerned about the impact on their plans and operations of the “dollar going up”.

But, he said, it continued to push towards obtaining a green light for the TGP that could be producing in a year or more.

An environmental assessment is reported to be “well advanced”and the project’s development application should be lodged with the NSW Department of Planning before the end of the month.

Based in Western Australia, Alkane works mostly in central western NSW.

Its other initiatives include the Dubbo Zirconia Project based on a world-class resource of metals and rare earth elements at Toongi.

A demonstration pilot plant is operating in Sydney and a definitive feasibility study under way.

The company hopes to be able to make a development commitment in mid-2010.