Alkane’s Post-Merger Costs and Production Raise Questions on Future Margins

• Record quarterly operational cash flow of A$73 million
• Gold equivalent production of 30,511 ounces at AISC of A$2,988/oz
• Merger with Mandalay Resources completed in August 2025
• Strong balance sheet with A$191 million in cash, bullion, and investments
• Ongoing exploration success including new high-grade vein intercepts

Strong Quarterly Performance Post-Merger

Alkane Resources Limited has delivered a standout first quarter for fiscal year 2026, reporting a record operational cash flow of A$73 million alongside a gold equivalent production of 30,511 ounces at an all-in sustaining cost (AISC) of A$2,988 per ounce. This performance marks a significant milestone following the completion of its merger with Mandalay Resources Corporation in early August 2025, which has expanded Alkane’s operational footprint to three producing mines across Australia and Sweden.

The quarter was transitional, with only two months of production from the newly acquired Costerfield and Björkdal operations, yet the combined output demonstrates the enhanced scale and efficiency of the merged entity. Alkane’s Managing Director Nic Earner highlighted the company’s solid balance sheet, strengthened by the repayment of a A$45 million debt facility and a cash, bullion, and listed investment balance of A$191 million at quarter-end.

Operational Highlights Across Key Mines

The Tomingley gold mine in New South Wales led production with 18,335 ounces of gold poured, despite some short-term challenges with explosives quality that are being addressed. Meanwhile, Costerfield in Victoria maintained steady output, producing 6,189 gold equivalent ounces over two months, supported by targeted operational improvements such as drill and blast optimisation and enhanced grade control. Björkdal in Sweden contributed 5,987 ounces, overcoming external disruptions including storm-related power outages and completing a major maintenance shutdown to boost future throughput.

All three operations continue to focus on operational consistency and resource extension, with exploration drilling programs underway. Notably, new high-grade vein intercepts were reported at the True Blue prospect near Costerfield and at El Paso within the Tomingley region, underscoring the potential for resource growth.

Financial Strength and Strategic Projects

Alkane generated A$147 million in revenue during the quarter, benefiting from an average realised gold price of A$4,896 per ounce and a strong antimony price of A$35,646 per tonne. The company’s disciplined capital expenditure of A$27 million included investments in growth projects such as the Newell Highway realignment at Tomingley, which commenced construction with an expected completion in March 2027.

Forward-looking, Alkane remains on track to meet its full-year guidance of 160,000 to 175,000 gold equivalent ounces at an AISC range of A$2,600 to A$2,900 per ounce. The company also continues to advance exploration at its Northern Molong Porphyry Project and other assets, aiming to further enhance its resource base and production profile.

Outlook and Market Positioning

With the successful integration of Mandalay Resources and a robust financial position, Alkane is well positioned to capitalise on favourable commodity prices and operational synergies. The company’s diversified portfolio across multiple jurisdictions provides resilience and growth opportunities, while ongoing exploration success could extend mine lives and add value for shareholders.

Bottom Line?

Alkane’s strong start to FY26 sets the stage for sustained growth, but investors will watch closely for exploration outcomes and cost management.

Questions in the middle?

• How will Alkane manage operational integration challenges across its expanded mine portfolio?
• What impact will the Newell Highway realignment have on Tomingley’s production and costs?
• Can ongoing exploration at True Blue and El Paso translate into significant resource upgrades?