Alkane Resources reported a strong Q1 FY2026 with $147 million in revenue and 30,511 gold equivalent ounces produced, bolstered by its recent merger with Mandalay Resources. The company’s balance sheet is solid with $191 million in cash and investments after repaying debt and covering merger costs.
- Q1 FY2026 revenue jumps to $147 million driven by Mandalay merger
- Gold equivalent production reaches 30,511 ounces across three mines
- Consolidated cash operating cost at $2,215 per ounce gold equivalent
- Balance sheet strengthened with $191 million in cash, bullion, and investments
- Operational challenges at Tomingley and Costerfield addressed amid growth
Merger Boosts Scale and Revenue
Alkane Resources has kicked off FY2026 with a robust first quarter, reporting consolidated revenue of $147.2 million, a significant leap from $62.3 million in the same period last year. This surge is largely attributable to the August completion of its merger with Mandalay Resources, which added two operating mines; Costerfield in Victoria and Björkdal in Sweden; to Alkane’s portfolio alongside its flagship Tomingley operation in New South Wales.
The combined entity produced 30,511 gold equivalent ounces during the quarter, with Tomingley contributing 18,335 ounces over three months, and Björkdal and Costerfield adding production for two months post-merger. This expanded production base, coupled with higher realised gold and antimony prices, underpinned the revenue growth.
Cost Pressures and Operational Nuances
Despite the revenue gains, Alkane’s consolidated cash operating cost rose to $2,215 per ounce of gold equivalent, up from $1,819 in Q1 2025. This increase reflects higher processing costs at Tomingley, including the deployment of a hire mobile crusher to boost throughput, as well as the integration of Björkdal and Costerfield, which have higher unit costs of $2,805 and $1,927 per ounce respectively.
All-in sustaining costs (AISC) also climbed to $2,988 per ounce, driven by these operational cost increases and the expanded asset base. Tomingley faced short-term challenges with explosives quality, which the site is actively addressing, while Costerfield contended with complex ground conditions affecting ore recovery. Björkdal experienced some processing interruptions due to maintenance and external factors but completed a major shutdown on schedule, positioning it for improved performance ahead.
Financial Strength and Strategic Positioning
Alkane’s balance sheet remains robust following the merger, with $191 million in cash, bullion, and liquid investments after repaying $45 million in debt and incurring $25 million in one-off merger-related costs. Adjusted EBITDA rose to $36.9 million, reflecting operational scale, though net profit was impacted by inventory accounting adjustments and transaction expenses.
Looking forward, Alkane is well positioned to capitalise on its diversified asset base and ongoing exploration programs at all three mines. The company’s large-scale Boda-Kaiser gold-copper project in New South Wales also remains a key development focus, potentially adding further growth avenues.
Management’s focus on operational consistency, cost control, and integration of the Mandalay assets will be critical to sustaining momentum and delivering shareholder value in the coming quarters.
Bottom Line?
Alkane’s expanded footprint and strong balance sheet set the stage for growth, but operational cost pressures and integration challenges warrant close monitoring.
Questions in the middle?
- How will Alkane manage rising operating costs across its expanded mine portfolio?
- What impact will operational challenges at Tomingley and Costerfield have on future production?
- When can investors expect to see contributions from the Boda-Kaiser project?