Rising Costs and Integration Risks Shadow Alkane’s Post-Merger Surge
Alkane Resources Ltd has reported a remarkable half-year surge in revenue and profit, driven by its strategic merger with Mandalay Resources Corporation and soaring gold prices.
- Revenue jumps 232% to $403.95 million
- Profit after tax soars 393% to $64.9 million
- Gold equivalent production more than doubles to 74,174 ounces
- Merger with Mandalay Resources adds Costerfield and Björkdal operations
- No dividends declared despite strong financial performance
A Transformative Merger Boosts Alkane's Scale
Alkane Resources Ltd has unveiled a striking half-year financial performance for the period ending 31 December 2025, underpinned by its August 2025 merger with Mandalay Resources Corporation. This strategic acquisition brought the Costerfield gold-antimony and Björkdal gold operations into Alkane’s portfolio, significantly expanding its production footprint across Australia and Sweden.
The merger has been a game changer, propelling Alkane’s revenue to $403.95 million; a 232% increase compared to the prior corresponding period. Profit after tax attributable to Alkane’s owners surged by 393% to $64.9 million, reflecting the combined operational scale and the benefit of higher realised gold prices during the half-year.
Operational Highlights Across Three Mines
Alkane’s gold equivalent production more than doubled to 74,174 ounces, with an all-in sustaining cost (AISC) of $2,841 per ounce, slightly higher than the previous year’s $2,598 per ounce. The company’s wholly owned Tomingley mine in New South Wales increased gold production by 22% to 40,424 ounces, aided by a 19% increase in mill feed following the commissioning of a mobile crusher.
The newly acquired Costerfield operation in Victoria contributed 16,433 ounces of gold and 391 tonnes of antimony, translating to 17,875 gold equivalent ounces at an AISC of $2,254 per ounce. Meanwhile, the Björkdal mine in Sweden produced 15,875 ounces of gold with an AISC of $4,077 per ounce. Both operations benefited from robust gold prices, with average realised prices reaching $5,421 per ounce group-wide, up from $3,498 in the previous period.
Exploration and Development Momentum
Alkane continues to invest in exploration across its assets. At Tomingley, drilling has intersected significant new gold mineralisation at El Paso and discovered a new mineralised zone at McLeans. Near-mine drilling at Costerfield targets resource expansion in several key veins, while Björkdal’s programs focus on extending orebody depth and expanding the Storheden deposit.
Additionally, Alkane is progressing its Northern Molong Porphyry Project with ongoing geophysical surveys and reconnaissance drilling, aiming to unlock further gold-copper potential. Environmental baseline studies are underway to support future development approvals.
Financial Position and Corporate Developments
The company’s balance sheet reflects the acquisition’s impact, with total assets rising to $1.36 billion and net tangible assets per share doubling to 71.92 cents. Alkane has not declared dividends for the period, opting to reinvest cash flows into growth and exploration. The financial statements were reviewed by KPMG with no qualifications, underscoring the robustness of the reported results.
Leadership changes accompanied the merger, with several new non-executive directors appointed to guide the expanded group. Alkane also maintains strategic investments in junior explorers Medallion Metals and Sky Metals, aligning with its growth strategy.
Bottom Line?
Alkane’s integration of Mandalay assets and strong gold market conditions set the stage for continued growth, but investors will watch closely for cost control and exploration success.
Questions in the middle?
- How will Alkane manage rising all-in sustaining costs amid expansion?
- What are the timelines and prospects for resource upgrades from ongoing exploration?
- Will Alkane initiate dividend payments as cash flow strengthens post-merger?
