Alkane Resources Doubles Profit, Completes Mandalay Merger—What’s Next?
Alkane Resources reported a robust FY2025 with a 87% jump in profit after tax to A$33 million, driven by higher gold production and prices. The company also completed a transformative merger with Mandalay Resources, creating a diversified gold and antimony producer.
- Profit after tax rises 87% to A$33 million
- Gold production up 23% to 70,120 ounces at AISC of A$2,561/oz
- Merger with Mandalay Resources effective 5 August 2025
- Strong balance sheet with A$60.3 million in cash, bullion, and investments
- Significant board changes post-merger with new leadership appointments
Strong Financial Performance Amid Operational Upgrades
Alkane Resources Limited (ASX, ALK) delivered a standout financial year for FY2025, reporting a profit after tax of A$33 million, nearly doubling the previous year's result. This surge was underpinned by a 23% increase in gold production to 70,120 ounces, achieved through higher grade ore and improved recoveries following a fine grind circuit upgrade at the Tomingley Gold Operations.
The company maintained its all-in sustaining cost (AISC) within guidance at A$2,561 per ounce, despite inflationary pressures, while benefiting from a 25% rise in the average realised gold price to A$3,770 per ounce. These factors combined to boost gold revenue by 52% to A$262 million.
Strategic Merger Creates Diversified Mining Platform
Post financial year-end, Alkane completed a "merger of equals" with Canadian-based Mandalay Resources Corporation, effective 5 August 2025. This transaction, approved by shareholders of both companies, positions the combined entity as a diversified gold and antimony producer with three cash-generating mines across Australia and Sweden.
The merger brings together Alkane’s Tomingley, Costerfield, and Björkdal mines with Mandalay’s assets, enhancing organic growth potential and strengthening the balance sheet. Alkane shareholders now own approximately 45% of the combined group, with Mandalay shareholders holding 55%.
Robust Balance Sheet and Capital Management
As at 30 June 2025, Alkane held A$60.3 million in cash, bullion, and listed investments, including A$48.1 million in cash and A$12.2 million in bullion. The company repaid its outstanding A$45 million Macquarie facility shortly after year-end, further solidifying its financial position.
Capital expenditure during the year focused on the Tomingley Gold Extension Project, including processing plant upgrades and paste plant construction, aimed at extending mine life and improving recoveries. Exploration efforts continued across key projects such as the Northern Molong Porphyry Project and regional targets near Tomingley, with results pending.
Leadership Transition and Future Outlook
The merger prompted significant board and executive changes, with former Mandalay executives joining Alkane’s board, including new Non-Executive Chair Andrew Quinn and directors Bradford Mills, Frazer Bourchier, and Dominic Duffy. Several Alkane directors resigned, reflecting the integration of leadership teams.
Managing Director Nic Earner highlighted the company’s strong operational performance and growth prospects, emphasizing the combined entity’s enhanced platform for production and exploration. The company did not declare dividends for FY2025, opting to reinvest in growth initiatives.
Looking ahead, Alkane plans to focus on safe underground operations at Tomingley, ongoing exploration, and advancing development projects to sustain and grow its resource base.
Bottom Line?
With a solid FY2025 performance and the Mandalay merger now complete, Alkane Resources is poised for a new growth chapter; but investors will watch closely for exploration results and integration progress.
Questions in the middle?
- How will the integration of Mandalay’s assets impact Alkane’s production and cost structure in FY2026?
- What are the expected timelines and capital requirements for advancing the Northern Molong Porphyry Project?
- How will the new board and management team shape Alkane’s strategic priorities post-merger?
