Shares in Alkane Resources shot up 14 per cent on Monday after the minerals explorer announced it has been granted a mining lease for its Tomingley Gold Project near Dubbo in NSW.

Alkane said the approval would allow development to proceed immediately following earlier development approval in July 2012.

The company expects the first gold output from Tomingley to be in late 2013 following an 11 month construction period.

At 1220 AEDT Alkane shares were eight cents, or 14.2 per cent, higher at 64.5 cents.

The company said that it also expects to submit an environmental impact statement for the Dubbo zirconia and rare earths project, from which production is expected in early 2016.

Both the Tomingley Gold and zirconia project would create 900 jobs and involve about $1 billion in capital expenditure over two years, Alkane said.

Zirconium is used in ceramics, and rare earth elements are used in high-tech consumer goods such as iPods and flat-screen televisions.

The company says about 39 per cent of revenue will come from zirconium, with 22 per cent from niobium. The rest will come from a combination of light and heavy rare earths.

China, which controls about 97 per cent of the world's rare earths, has imposed quotas on its exports.