Alkane’s Record Production Raises Questions on Cost Control and Future Growth
Alkane Resources delivered a record quarterly gold equivalent production of 43,663 ounces with strong cash flow, maintaining its full-year guidance amid ongoing exploration success and operational improvements.
- Record quarterly gold equivalent production of 43,663 ounces at AISC $2,739/oz
- Strong site operating cash flow of $133 million for Q2 FY26
- Cash, bullion, and listed investments balance rises to $246 million
- Exploration extends Storheden deposit and discovers new gold zones at Tomingley
- Newell Highway realignment project progressing, completion expected H1 2027
Record Production and Financial Strength
Alkane Resources Limited has reported a standout second quarter for fiscal year 2026, achieving a record gold equivalent production of 43,663 ounces at an all-in sustaining cost (AISC) of $2,739 per ounce. This performance marks a significant increase from the previous quarter and reflects the combined output from its Australian and Swedish operations following the merger with Mandalay Resources.
The company’s operational cash flow surged to $133 million for the quarter, underpinning a robust balance sheet with cash, bullion, and listed investments totalling $246 million. This financial strength positions Alkane well to support ongoing exploration and development initiatives.
Operational Highlights Across Key Mines
Production gains were driven by improved performance at the Tomingley gold mine in New South Wales, the Costerfield gold-antimony operation in Victoria, and the Björkdal gold mine in Sweden. Tomingley processed over 318,000 tonnes of ore with a gold grade of 2.5 grams per tonne, producing 22,089 ounces of gold. Costerfield delivered 11,686 gold equivalent ounces, benefiting from higher grades and operational efficiencies. Björkdal contributed 9,888 ounces of gold, with ongoing equipment upgrades enhancing recovery rates despite some mill throughput constraints.
Exploration Success and Project Development
Exploration efforts continue to bear fruit, with significant drilling results extending the Storheden deposit at Björkdal to a depth of 464 metres and a strike length of 2.7 kilometres. At Tomingley, a newly discovered gold-rich domain near existing underground infrastructure promises to add value to the mine’s resource base. Meanwhile, the Newell Highway realignment project, critical for site access and operational logistics at Tomingley, is underway with completion expected in the first half of 2027.
Financial Discipline and Future Outlook
Alkane’s disciplined cost management is evident in the reduction of AISC from $2,988 per ounce in the previous quarter to $2,739 per ounce, driven by higher grades and production volumes. The company generated $256 million in revenue for the quarter, supported by rising gold and antimony prices. Alkane’s full-year production guidance remains on track at 160,000 to 175,000 gold equivalent ounces with AISC between $2,600 and $2,900 per ounce.
With a strong cash position and ongoing exploration success, Alkane is well placed to sustain its growth trajectory and enhance shareholder value in a volatile commodity market.
Bottom Line?
Alkane’s record quarter and strong cash flow set the stage for sustained growth, but commodity price swings and operational challenges remain key watchpoints.
Questions in the middle?
- How will Alkane manage potential cost pressures as production scales?
- What impact will the Newell Highway realignment have on operational efficiency and costs?
- Can ongoing exploration discoveries translate into meaningful resource extensions and mine life increases?
