Alkane Resources Proposes Maiden Dividend After Record FY26 Production

Record Production and Cash Flow Drive Maiden Dividend Proposal

Alkane Resources (ASX:ALK) closed FY26 on a high note, delivering 168,337 gold equivalent ounces (AuEq) for the full year, hitting the top end of its guidance range. The June quarter alone contributed 42,491 AuEq ounces, albeit slightly down from the previous quarter due to natural grade fluctuations. The company’s all-in sustaining cost (AISC) for the quarter rose to $3,011 per AuEq ounce, reflecting lower feed grades and external price pressures, nudging FY26 AISC slightly above guidance at $2,925 per AuEq ounce.

Strong operational cash flow of $174 million in Q4 bolstered Alkane’s balance sheet to $454 million in cash, bullion, and investments, underpinning the board's decision to propose Alkane's inaugural fully franked dividend of 2 cents per share. This milestone marks a tangible return to shareholders amid Alkane’s growth trajectory and financial strength.

Operational Highlights Across Three Mines

The company’s trio of mines; Tomingley (NSW), Costerfield (Victoria), and Björkdal (Sweden); each contributed to the record output. Tomingley set records for annual ounce production and underground ore mined, processing 1.27 million tonnes at a gold grade of 2.33 g/t, producing 82,973 ounces of gold with an AISC of $2,429/oz. The Newell Highway diversion project at Tomingley progressed steadily, targeting completion in early 2027.

Costerfield, known for its high-grade gold and antimony, produced 37,134 ounces of gold and 1,224 tonnes of antimony for the year, meeting or exceeding production and cost guidance. Operational challenges such as ground conditions and drilling rates were being addressed through targeted improvements, including transitioning to owner-operated capital development and blast optimisation.

Björkdal delivered 38,243 ounces of gold with an AISC of $3,979/oz, maintaining consistent mining performance despite a slight dip in quarterly production. Capital works for tailings dam lifts ramped up, and exploration drilling targeted extensions at the northern and eastern zones, including the Storheden and Norrberget deposits.

Exploration Momentum at Northern Molong Porphyry Project

Exploration activity continued to underpin Alkane’s growth ambitions, particularly at the Northern Molong Porphyry Project (NMPP) which encompasses the Boda-Kaiser Au-Cu deposits. Recent drilling between Boda and Kaiser intersected magmatic-hydrothermal breccias with notable mineralisation over significant widths, including 23.5 metres at 0.17 g/t Au and 0.14% Cu, and 42.1 metres at similar grades. A Mobile Magnetotellurics survey identified six new high-priority targets, expanding the scope for future resource growth.

Near-mine exploration at Tomingley, Costerfield, and Björkdal focused on resource extensions and infill drilling, with high-grade intercepts reported at Brunswick South (Costerfield) and the Björkdal mine extensions. These efforts aim to sustain and potentially extend mine life across Alkane’s portfolio.

Financial Position and Capital Deployment

Alkane’s financial discipline was evident with $52 million spent in the quarter on sustaining, growth, and exploration capital. Growth projects include the Newell Highway realignment at Tomingley, tailings storage facility construction at Björkdal, and development of Brunswick South at Costerfield. The company also executed new banking facilities totaling $150 million, enhancing liquidity and funding flexibility.

Gold equivalent sales for Q4 reached 47,411 ounces, generating $257 million in revenue at an average realised gold price of $5,442/oz and antimony price of $24,276/t. Hedging activity included 8,500 ounces filled during the quarter at Tomingley, with forward contracts extending into mid-2027.

FY27 Guidance and Outlook

Looking ahead, Alkane targets production of 163,000 to 177,000 AuEq ounces at an AISC of $2,900 to $3,200 per ounce in FY27. Exploration expenditure is budgeted at $55 to $65 million, with growth capital rising to $160 to $190 million, reflecting a ramp-up in development activities across the group’s assets. Key projects include advancing the Newell Highway diversion, Brunswick South development, Storheden mine development, and tailings dam expansion at Björkdal.

The company’s maiden dividend proposal signals confidence in sustaining cash flows and growth, but remains subject to audit completion and board approval.