Alara Resources has swung from a $19.03 million loss to a $19.67 million net profit after tax as its Oman copper operation generated $135.35 million in revenue. The turnaround comes with a material going-concern uncertainty, planned further equity funding and a legal appeal due in November.
- FY26 net profit after tax of $19.67 million
- Revenue increased to $135.35 million from $55.32 million
- Al Wash-hi produced 8,071 tonnes of contained copper
- Cash rose to $27.36 million, but current liabilities exceeded assets by $6.95 million
- Probable ore reserves fell to 7.48 million tonnes after mining depletion
Copper Revenue Drives Profit Turnaround
Alara Resources Limited (ASX:AUQ) has turned a $19.03 million loss into a $19.67 million net profit after tax, with its Oman copper operation doing the heavy lifting. Revenue reached $135.35 million for the year ended 30 June 2026, up from $55.32 million a year earlier, while profit before tax rose to $20.89 million from a $19.03 million loss.
Copper sales accounted for $134.44 million of revenue. The Al Wash-hi Majaza mine and concentrator, held through Alara’s 51%-owned Al Hadeetha Resources, produced approximately 8,071 tonnes of contained copper in concentrate during FY26 and operated above nameplate capacity, according to the directors’ report. Cash and cash equivalents increased to $27.36 million from $12.43 million, although operating activities still consumed $1.91 million during the year.
Going Concern Warning Sits Beneath the Earnings Result
The more consequential passage in the accounts is the auditor’s material uncertainty related to going concern. Alara reported a $6.95 million deficiency in net current assets at year-end, while the group recorded cash outflows from operating and investing activities of $15.89 million.
Management’s 12-month cash-flow forecast indicates a funding shortfall of approximately $2.80 million. The company expects to raise about $6 million through an equity placement in the second quarter of FY27, despite having completed a $3.84 million entitlement offer after year-end. The auditor issued an unmodified opinion, but highlighted that the group’s ability to continue normal operations depends in part on securing additional funding.
Debt and Reserve Depletion Keep Pressure on the Mine
Alara’s financial liabilities totalled $123.85 million at 30 June, including $92.45 million owed to Sohar International Bank on a facility supporting the Wash-hi Majaza infrastructure. The accounts state that there were no breaches of the facility’s covenants during the year, but interest and scheduled debt obligations remain important variables for a group with negative net current assets.
The mine’s resource base also moved backwards on production, rather than expanding during the year. Mineral Resources inclusive of Ore Reserves fell from 13.80 million tonnes at 0.86% copper to 12.90 million tonnes at 0.85%, while Probable Ore Reserves declined from 8.38 million tonnes to 7.48 million tonnes. Alara attributed the reduction to mining depletion and minor reconciliation adjustments, with no resources or reserves added during FY26.
Exploration and Legal Catalysts Move Into FY27
Exploration drilling at Wash-hi covered 15,504 metres across 60 diamond holes during the two phases, with the southern extension showing indications of mineralisation continuity. Gold assays from part of the work were still outstanding after year-end, and an independent review of the resource and reserve estimates by SRK is expected in the second quarter of FY27.
Alara is also advancing exploration across Block 22B, Block 8 and the Daris project, while processing data from a 6,132-line-kilometre HeliTEM airborne survey over Block 22B. These programmes may generate targets, but the company expressly cautions that geophysical anomalies do not establish economically recoverable mineralisation.
A separate legal risk has not disappeared. Although an Omani court dismissed substantive claims brought by local residents against Al Hadeetha Resources and government authorities, the claimants have appealed and a hearing is scheduled for November 2026. The next test for Alara is therefore not simply whether the mine can remain profitable, but whether production cash flow, debt servicing and fresh capital can keep pace with the company’s expanding list of technical and legal commitments.
Bottom Line?
The profit turnaround is substantial, but the next funding decision and November appeal will determine how much of that improvement can be converted into durable financial flexibility.
Questions in the middle?
- Can Alara complete the planned approximately $6 million equity raising on acceptable terms?
- Will the November appeal create any operational or licensing disruption at Al Wash-hi Majaza?
- Can exploration and the independent resource review replace reserves consumed by ongoing mining?