Alara Resources has reported its first full-year profit after its Oman copper operation produced above nameplate capacity, lifting revenue 145% to A$135.3 million. The turnaround is substantial, but negative operating cash flow and a planned A$6 million equity raise keep the balance sheet firmly in focus.
- A$19.7 million FY26 net profit after tax, versus a A$19.0 million loss
- 42,844 WMT of copper concentrate produced, containing 8,071 tonnes of copper
- A$27.4 million cash at year-end, despite A$1.9 million negative operating cash flow
- 7.70 Mt Probable Ore Reserve supports approximately eight years at 1.0 Mtpa
- Approximately A$6 million equity placement expected in Q2 FY27
Oman mine delivers Alara’s first full-year profit
Alara Resources Limited (ASX:AUQ) has crossed the most important threshold in its short production history: its 51%-owned Al Wash-hi Majaza copper mine helped deliver a full-year profit. Group revenue and income rose 145% to A$135.3 million in FY26, while net profit after tax reached A$19.7 million, reversing the A$19.0 million loss recorded in FY25.
The operation produced 42,844 wet metric tonnes of copper concentrate containing 8,071 tonnes of copper on a 100% basis. Its 1 Mtpa concentrator ran above nameplate capacity throughout the year, with 30 parcels dispatched from Sohar Port. Gold in concentrate sold also increased 32% to 3,241 ounces. The result marks a sharp change from the mine’s construction and commissioning phase, although Alara’s attributable share of the operation remains 51%.
The production momentum continued into the September 2026 quarter, when AHRL dispatched 15 parcels containing approximately 2,952 tonnes of copper, 42% above the previous quarterly record. That operating run was outlined in the record September copper quarter, which closed with the 65th concentrate shipment leaving Oman.
Reserve supports eight years, but depletion has changed the base
An independently audited resource and reserve statement gives the mine a 7.70 Mt Probable Ore Reserve at 0.81% copper and 0.25 grams per tonne of gold. At a 1.0 Mtpa run rate, that supports approximately eight years of production. The statement also places 98% of the 10.23 Mt Mineral Resource in the Measured and Indicated categories.
That headline mine-life figure needs to be read alongside the reserve movement. The audited estimate superseded an interim depletion-adjusted figure in the Directors’ Report, and the Mineral Resource fell from 13.80 Mt to 10.23 Mt after the first application of a reasonable-prospects-for-eventual-economic-extraction pit-shell constraint and mining depletion. Ore Reserves declined 8% from the prior reported 8.38 Mt, chiefly reflecting 0.86 Mt of depletion, partly offset by higher metal-price assumptions and stockpiles. The audited eight-year reserve had already put that distinction on the market’s radar.
Profit has not yet become operating cash flow
Alara ended June with A$27.4 million in cash, more than double the prior year’s A$12.4 million, and total equity rose to A$25.6 million from A$2.4 million. But the cash-flow statement is less comfortable than the profit line: operating activities consumed A$1.9 million, while investing activities used A$14.0 million. Financing supplied A$31.4 million, including borrowings and the A$3.4 million placement completed in July 2025.
The accounts disclose a material uncertainty related to going concern. Management forecasts an approximately A$2.8 million cash shortfall over the following 12 months and anticipates raising about A$6 million through an equity placement in Q2 FY27. The company also carries A$123.9 million in financial liabilities, including the Sohar International Bank facility used to fund the mine and processing infrastructure. Related-party creditors have agreed to defer A$32.1 million of current liabilities, with deferred amounts bearing interest at 10%.
Shareholders have already provided evidence of support: the post-year-end entitlement offer attracted about A$4.95 million of applications against its A$3.84 million target. That outcome was covered in the oversubscribed entitlement offer, but the next proposed placement will test whether that appetite extends beyond existing holders and whether funding arrives on terms that limit dilution.
Exploration aims to extend the mine and build a second growth leg
Alara completed 15,504 metres of near-mine diamond drilling across 60 holes at Al Wash-hi Majaza. Initial interpretations indicate continuity of mineralisation in the southern extension, with mineralisation remaining open along strike and at depth. Follow-up work is intended to test mine-life extensions and western low-magnetic targets.
The wider Oman portfolio is moving through earlier stages of definition. A 6,132-line-kilometre HeliTEM survey has been completed across the approximately 1,448 km² Block 22B concession, with interpretation expected in Q2 FY27. Twelve copper-gold prospects have been identified across Block 22B and the adjoining Al Wash-hi and Mullaq area, but rock-chip results remain selective and no prospect has yet been ranked. Daris 3A5 holds a second mining licence, while Daris East licensing and community negotiations remain unresolved.
November appeal remains a live operational risk
In June, Oman’s Primary Administrative Court in Ibra dismissed all substantive claims brought against Al Hadeetha Resources, finding the project approvals and mining licence were lawfully issued and that environmental impacts had not been established on the evidence. The claimants appealed, with a hearing scheduled for November 2026. Regional tensions also delayed some shipments and extended payment cycles during FY26, although the company said production was not affected.
Alara has therefore reached commercial production with a markedly stronger income statement, but not yet with self-evidently self-funding operations. The next proof point is whether above-nameplate output converts into sustained operating cash after debt service, working-capital movements and the next capital raise are taken into account.
Bottom Line?
Alara’s operational turnaround is now established in the accounts; the harder test is converting that profit into cash while funding growth and managing the November appeal.
Questions in the middle?
- Can above-nameplate production translate into consistently positive operating cash flow after working-capital movements and debt costs?
- Will the planned approximately A$6 million placement fund exploration without materially diluting existing shareholders?
- Can near-mine drilling and Block 22B interpretation replace reserves consumed by production and extend the operating horizon beyond roughly eight years?