Alkane Resources reported steady gold production and cash flow for FY2025 at its Tomingley operations, while securing shareholder approval for a transformative merger with Mandalay Resources.
- Gold production of 70,120oz for FY2025 within guidance
- All-in sustaining costs (AISC) at A$2,560/oz for the year
- Quarterly revenue of A$78 million at A$4,221/oz average gold price
- Shareholders approve merger with Mandalay Resources, completion expected August 2025
- Cash, bullion, and investments increased to A$68.3 million
Steady Production and Cost Control at Tomingley
Alkane Resources has closed FY2025 with gold production of 70,120 ounces from its Tomingley Gold Operations, comfortably within its guidance range. The June quarter alone contributed 19,193 ounces, supported by strong underground mining performance, particularly from the Roswell deposit. Operating costs remained well managed, with an all-in sustaining cost (AISC) of A$2,560 per ounce for the full year, aligning with company forecasts.
This disciplined cost structure helped generate operating cash flow of A$94 million for FY2025, including A$26.6 million in the last quarter. Gold sales for the quarter reached 18,476 ounces, yielding revenue of A$78 million at an average realised price of A$4,221 per ounce, reflecting a favourable gold price environment.
Merger with Mandalay Resources Nears Completion
In a significant corporate development, Alkane and Mandalay Resources shareholders have approved their "merger of equals," expected to finalize around 5 August 2025. This union will create a larger, diversified gold and antimony producer with enhanced scale and financial flexibility. Alkane’s Managing Director Nic Earner highlighted the strategic benefits, emphasizing the combined entity’s stronger balance sheet and expanded growth options.
Post-quarter, Alkane’s cash, bullion, and listed investments rose to A$68.3 million, up A$9.7 million from the previous quarter, providing a solid financial foundation as the companies integrate. The combined entity’s FY2026 guidance will be released in the September quarter, offering investors a clearer view of the merged operations’ outlook.
Exploration and Infrastructure Progress
Exploration remains a key focus, with resource expansion drilling at Tomingley delivering promising ore-grade intercepts beyond current models. Regional drilling results are anticipated in August, potentially extending the mine’s life and production profile. Alkane is also advancing infrastructure projects, including the Newell Highway diversion, set to commence construction in August 2025, which will improve site access and logistics.
Capital expenditure during the quarter included sustaining investments in underground development and equipment upgrades, alongside growth initiatives such as the Paste Plant and Process Plant upgrades. These investments underpin Alkane’s commitment to operational excellence and future expansion.
Risk Management and Financial Position
Alkane continues to manage price risk prudently, holding forward gold sale contracts for 61,600 ounces at prices averaging around A$2,840 per ounce, alongside put options providing downside protection at A$3,000 per ounce. Debt repayments and lease reductions further strengthen the balance sheet ahead of the merger.
With a robust cash position and ongoing exploration success, Alkane is well positioned to capitalize on the opportunities the merger with Mandalay presents, while maintaining operational stability at Tomingley.
Bottom Line?
As Alkane and Mandalay unite, the market will watch closely for how the combined entity leverages scale and exploration upside to drive growth.
Questions in the middle?
- How will the merger impact operational integration and cost synergies?
- What will the FY2026 production and cost guidance look like for the combined company?
- Can exploration results at Tomingley and Northern Molong Porphyry translate into extended mine life or new projects?