Alkane Resources Limited reported a significant jump in Q2 2026 production and revenue following its acquisition of Mandalay Resources, reaffirming its full-year guidance amid strong operational performance.
- Consolidated gold equivalent production rises to 43,663 ounces in Q2 2026
- Revenue jumps to AUD 256.7 million driven by higher production and metal prices
- Cash operating costs per ounce decrease at Tomingley despite expanded operations
- Sustaining and growth capital expenditures increase, including Newell Highway realignment
- FY 2026 production guidance reiterated at 155,000–168,000 gold equivalent ounces
Strong Operational Growth Post-Mandalay Acquisition
Alkane Resources Limited (ASX – ALK) has delivered a robust second quarter for fiscal 2026, marked by record production and revenue figures following its strategic acquisition of Mandalay Resources. The integration of Mandalay’s assets, notably the Björkdal and Costerfield mines, has significantly expanded Alkane’s footprint and output, propelling consolidated gold equivalent production to 43,663 ounces, nearly tripling the prior year’s comparable quarter.
This surge reflects not only the addition of new operations but also operational improvements at Alkane’s flagship Tomingley mine in New South Wales, which produced 22,089 ounces of gold during the quarter. The use of a mobile crusher has increased milling throughput, while recent plant upgrades have enhanced ore processing efficiency.
Financial Performance Highlights
Revenue for the quarter soared to AUD 256.7 million, a substantial increase from AUD 59.2 million in Q2 2025. This growth was driven by higher production volumes combined with improved realised prices for gold and antimony. The average realised gold price rose to AUD 5,785 per ounce, with Björkdal achieving an impressive AUD 6,930 per ounce, boosted by favourable market price adjustments during the quarter.
Operating costs also increased to AUD 102.8 million, reflecting the enlarged operational base. However, Alkane managed to reduce cash operating costs per ounce at Tomingley by 19% to AUD 1,811, benefiting from higher production volumes and operational efficiencies. The all-in sustaining cost (AISC) per ounce at Tomingley fell sharply to AUD 2,216, underscoring improved cost control despite increased sustaining capital expenditures in the prior year.
Capital Investment and Exploration Drive Future Growth
Capital expenditure rose to AUD 40.8 million for the quarter, including AUD 9 million invested in growth projects such as the Newell Highway realignment at Tomingley, expected to complete in the first half of 2027. Exploration drilling continued aggressively across all operations, with significant programs at Costerfield, Björkdal, and Tomingley aimed at resource expansion and extending mine life.
Exploration highlights include the discovery of new mineralisation zones at Tomingley’s McLeans area and promising depth extensions at Björkdal’s Storheden deposit, where recent drilling returned high-grade gold intercepts. These efforts position Alkane well for sustained production growth beyond the current fiscal year.
Balance Sheet Strength and Guidance
Alkane closed the quarter with a strong cash position of AUD 218 million and liquid investments of AUD 14 million, bolstered by record gold sales of 44,084 ounces. The company fully repaid its Macquarie Bank facility in August 2025, reducing debt and enhancing financial flexibility.
Reaffirming confidence in its operational outlook, Alkane reiterated its FY 2026 attributable production guidance of 155,000 to 168,000 gold equivalent ounces at an all-in sustaining cost range of AUD 2,600 to AUD 2,900 per ounce. This guidance accounts for the Mandalay assets only from the acquisition date, reflecting the company’s expanded scale.
Bottom Line?
With its expanded asset base and strong cash flow, Alkane is well positioned to capitalise on exploration successes and commodity price momentum in the year ahead.
Questions in the middle?
- How will the provisional acquisition accounting adjustments for Mandalay impact Alkane’s future financial results?
- What are the timelines and expected returns for the Newell Highway realignment and other growth projects?
- How sensitive is Alkane’s cost structure and profitability to fluctuations in gold and antimony prices?