Alkane Resources — Capital/Financing Update 2007

Oct 22, 2007

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RESOURCES LTD
ABN 35 000 689 216
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Corporate Profile

Alkane Board

ASX ANNOUNCEMENT – 23 October 2007

J. S. F. Dunlop (Chairman) D. I. Chalmers (Managing) A. D. Lethlean

I. J. Gandel I. R. Cornelius

DIAMOND CORE RESULTS CONFIRM CALOMA MINERALISATION EXTENDS TO DEPTH

L A Colless (Secretary)

Contact

Ian Chalmers

Managing Director

• Two core holes were completed in September at Caloma to assist with the geological interpretation and orientation of the multiple mineralised structures.

• Results from the first of the core holes demonstrates that gold mineralisation extends to depth.

96 Parry Street PERTH WA 6000 Telephone +61 8 9328 9411 Facsimile +61 8 9227 6011

Email ichalmers@alkane.com.au Web – www.alkane.com.au

• Results include:

PE 179D 20 metres grading 2.36g/t gold from 52 metres

12 month share price range

A$0.45 - $0.20

and 5 metres grading 2.28g/t gold from 99 metres

and 10.4 metres grading 2.27g/t gold from 132 metres including 2 metres grading 6.25g/t gold from 133 metres

Market Cap 22 October 07

~A$65 million

and 0.7 metres grading 10.00g/t gold from 209 metres

ASX Code: ALK

• A 10,000 metre RC resource drill out is scheduled to commence before the end of October.

• 2,500 metres of core drilling for additional geological, metallurgical and geotechnical data anticipated to commence later in the year.

200.9 million shares (Sept 07)

September 2007 Cash

~ $2.5 million

No debt

• Basic data compilation for the Definitive Feasibility Study is underway.

Media Relations

Westbrook Communications

Level 1, 17 Castlereagh Street SYDNEY NSW 2000 Telephone +61 2 9231 0922 Facsimile +61 2 9231 0131 Web – www.westbrookfin.com.au

Registered Office: 129 Edward Street Perth WA 6000 Telephone: 61 8 9227 5677 Facsimile: 61 8 9227 8178

PO Box 8178 Perth Business Centre Western Australia 6849 www.alkane.com.au mail@alkane.com.au

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The gold mineralisation identified at Caloma to date is associated with a Wyoming style feldspar porphyry intrusive, which appears to be several hundred metres in north-south extent and 80 to 100 metres in width (figure 1). Within the porphyry, altered and multiple mineralised zones have both north-south and east-west orientation with generally steep dips. Substantial widths of high grade mineralisation are often recorded where these structures intersect (eg PE133 37m @ 8.63g/t gold from 14m depth). Mineralisation is also evident on or near the east and west contacts of the porphyry, and within the adjoining volcaniclastic sediments.

Results of a scoping study released to the ASX (29 August 2007) indicated that geological interpretation of the central 300 metre sector of the mineralised porphyry at Caloma enabled a potential tonnage and grade model to be developed for that area. The drilling detail at this time is not sufficient for this body to be assigned as an Identified Mineral Resource but a conceptual range was determined to be 1.5 to 2.0 million tonnes grading 2.5g/t gold to 3.0g/t gold (120,000 to 190,000 ounces). This potential was assigned within a depth of about 100 metres from the surface.

Recent aircore drilling (ASX Announcement 27 September 2007) has extended this main mineralised zone to at least 700 metre north south strike extent.

Two diamond core holes were drilled near the centre of the Caloma porphyry to assist with geological interpretation and determine the orientation of the mineralisation at depth. Hole PE178D was drilled towards the north while PE179D was drilled towards the west. Detailed geological logging and sampling of the core has been completed and several zones of alteration and sulphide mineralisation with visible gold have been observed. Only results for PE179D are available and are summarised in the table below.

Table 1: TGP Results from PE179D greater than 0.5g/t gold @ 23 October 2007

Hole No	East	North	RL (m)	**Azimuth **	Inclin	Intcpt (m)	Grade (g/t Au)	Interval (m)	EOH (m)	Comments
PE179D	614905	6394120	~270	270°	60°	20.0	**2.36 **	52 - 72	**303 **	Includes RC
and						5.0	2.28	**99 - 104 **		**precollar **
and						**10.4 **	2.27	**132 – 143.4 **
including						2.0	6.25	133 - 135
and						**0.7 **	10.00	**209 – 209.7 **
and						0.9	2.88	221.9 – 222.8
and						1.9	2.51	**235.1 - 237 **
and						2.3	2.89	250 – 252.3

Gold analysis by 30g fire assay of half core samples at geological defined intervals. All true widths are not clear at this time.

The results from the hole have confirmed that the mineralised structures within the Caloma porphyry extend to at least 200 metre vertical depth and continue to demonstrate the potential of the Caloma body to host a substantial resource. A major RC resource drilling program of about 10,000 metres is scheduled to commence before the end of October. Also a 2,500 metre diamond core is planned to confirm geological characteristics and continuity of the mineralisation, as well as provide geotechnical and metallurgical data.

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Alkane Resources Ltd – ASX Announcement 23 October 2007

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BACKGROUND

Alkane is a multi commodity explorer and miner with its operations focussed in the Central West of New South Wales , centred about 400km northwest of Sydney. Over several years, including experience in developing the Peak Hill Gold Mine, Alkane has built a substantial resource base and is proceeding towards several developments:

The Tomingley Gold Project currently has a 606,000 ounce gold resource within the Wyoming deposits , of which 75% is in the Measured and Indicated categories. A recent discovery at Caloma could add significantly to the resource base and a substantial drilling program is scheduled to be completed by early 2008 to define this resource. A feasibility study for the development of the deposits is anticipated in the second half of 2008.

The Dubbo Zirconia Project is based upon a world class resource of the metals zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements. The deposit also contains significant uranium. Over several years Alkane has developed a flow sheet which can recover a variety of products which have expanding applications in electronics, ceramics, special alloys and glasses, fuel cells, nuclear power and as environmental drying agents and catalysts. A feasibility study is in progress, which includes the construction and operation of a Demonstration Pilot Plant, and a development commitment is anticipated by the end of 2008.

Near Orange, the Company has a joint venture ( ODEJV ) with Newmont, one of the world’s largest gold miners, which resulted in the discovery in 2006 of a potentially significant gold deposit at McPhillamys within the Moorilda Project . This discovery includes intersections of 123 metres grading 1.96g/t gold and 77 metres at 1.65g/t gold within a 300 metre by 200 metre mineralised zone. Exploration is continuing.

Elsewhere within the region, Alkane has defined a 2 million tonne 1.00% copper deposit which is being reviewed for its development potential at Galwadgere within the Wellington Project , and several other advanced exploration projects with encouraging drill intercepts.

In Western Australia the company holds 9 million shares (17%) of listed iron ore explorer BC Iron Limited and a diluting 25% residual interest in a nickel sulphide joint venture with Jubilee Mines near Leinster .

Mr D I Chalmers, FAusIMM, FAIG, (director of the Company) has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ian Chalmers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Alkane Resources Ltd – ASX Announcement 23 October 2007

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