Alkane Resources (ASX:ALK) reported what management described as a record-setting second quarter and first half of fiscal 2026, driven by strong gold and antimony prices alongside higher production across its three operating mines. The quarter ended December 31, 2025 represents the company’s second quarter of its June 30 fiscal year, and the results include a full six months from Tomingley and five months from the former Mandalay Resources assets at Costerfield and Björkdal following the merger that closed on August 5, 2025.
Record production and cash generation
Managing Director and CEO Nic Earner said Alkane produced just over 43,600 gold equivalent ounces (GEOs) in the December quarter, lifting first-half production to just over 74,000 GEOs. Earner noted that July production from the former Mandalay assets was not included in the first-half figure, and he said the company remains on track to meet group fiscal 2026 guidance of 160,000 to 175,000 GEOs on a full 12-month basis including July.
Chief Financial Officer James Carter said consolidated revenue was AUD 256.7 million for the quarter. Average realized gold price was AUD 5,078.85 per ounce (around US$3,857/oz), which he said was 18% higher than Q1. Average antimony prices were $42,500 per tonne (about $28,327 per tonne), up 19% from the previous quarter. Carter added that quarter cash flows would have been about AUD 18 million higher but for a Costerfield shipment that departed around the Christmas period, with payment received in early January and expected to be reflected in Q3 cash flows.
Carter reported consolidated site operating costs of AUD 2,031 per gold equivalent ounce produced, about 8% lower than the September quarter, which he attributed to improved throughput, capturing synergies from the merger, and cost discipline. All-in sustaining costs (AISC) were AUD 2,739 per gold equivalent ounce (about US$1,826/oz), also about 8% lower than the previous quarter and within the company’s fiscal 2026 guidance range. EBITDA for the quarter was a record AUD 147.2 million.
Mine-by-mine results: Tomingley, Björkdal, and Costerfield
Tomingley produced a bit over 22,000 ounces of gold after processing nearly 319,000 tonnes at an average grade of 2.5 g/t and average recovery of 89.8%. Earner said production was 20% higher than Q1, reflecting slightly improved operations and a planned move into higher-grade zones. AISC was AUD 2,216 per ounce, 16% lower than Q1. Earner cited minor operational challenges during the quarter—short circuit downtime that delayed paste fill, lower development rates leading to lower development ore, and stope redesigns to improve ore recovery—adding that these were resolved quickly. He also said the processing plant is milling in excess of budget, supported by a mobile crusher used to pre-crush material, which has contributed to a nominal increase in milling rates to about 1.3 million tonnes per annum. Operating cash flow from Tomingley was AUD 67 million, more than 70% higher than Q1.
Björkdal processed nearly 330,000 tonnes at an average grade of 1.04 g/t and recovery of 87.4%, producing just under 10,000 ounces of gold. AISC was AUD 4,117 per ounce, 2% higher than Q1. Earner described the quarter as solid, citing consistent stope productivity and stable development activities, alongside the start of critical equipment replacements that have improved machine availability. He said throughput was lower quarter-over-quarter due to a mill reline, as new linings wore more slowly than anticipated, limiting allowable mill load. Commissioning of a return water system from the mine was described as having a positive impact on flow performance and recoveries. Operating cash flow from Björkdal was AUD 35 million.
Costerfield, Alkane’s gold and antimony operation, processed nearly 35,000 tonnes and benefited from a planned higher-grade sequence. The mine achieved average gold grade of just over 10.4 g/t and antimony grade of 0.91%, both higher than Q1. Gold recovery was 93.9% and antimony recovery was 86.8%, also higher than Q1. The operation produced 10,790 ounces of gold and 267 tonnes of antimony, or 11,686 GEOs. AISC was AUD 2,149 per gold equivalent ounce, a 12% decrease from Q1. Earner said the operation is pursuing initiatives to improve ore quality and recovery, including drill-and-blast optimization, operator training, and a transition toward emulsion explosives aimed at improving recovery and reducing dilution. Costerfield operating cash flow was AUD 30 million.
Exploration spending and growth initiatives
Earner emphasized organic growth through resource expansion as a strategic pillar and described active exploration across the portfolio. He detailed quarterly exploration investment of AUD 2 million at Tomingley, AUD 2 million at Björkdal, and AUD 6 million at Costerfield, alongside AUD 3 million spent on work across the Northern Molong Porphyry Project, including Boda-Kaiser.
- Tomingley: Programs included extension drilling under existing pits, resource infill at Roswell, a new gold-rich zone at McLean’s near infrastructure, drilling at El Paso, and early testing at Peak Hill for gold-copper porphyry potential, plus geophysical targeting and drill testing at Glen Isla.
- Björkdal: Drilling targeted northern and eastern depth extensions and work at Storhusberget, where Earner said results indicated a doubling of known depth and extent of Björkdal-style veins across three target domains. He cited highlight intercepts including 34 g/t over 1.6m, 142 g/t over 0.6m, and 111 g/t over 0.5m. The company also began work to extend the Norrberget resource.
- Costerfield: Drilling focused on Brunswick South, Kendall (above current Yule workings), and below King Cobra (beneath Cuffley and Augusta). Earner also described progress at True Blue with multiple diamond rigs on infill and step-out drilling, and testing for Sunday Creek-style mineralization below historic mines.
At the broader Northern Molong Porphyry Project, Earner said Alkane completed a mobile magnetotelluric survey across most of the deposit area and continues to progress a 4,500-meter reconnaissance drill program, with results to be announced as received.
Balance sheet, capital allocation, and outlook
Carter said cash flow from operations totaled AUD 133 million in the quarter, up 82% from Q1. Corporate and other expenses were AUD 20 million, including AUD 7 million for corporate and technical support, a AUD 6 million cash bond tied to the Newell Highway realignment project (expected to be returned over about 18 months upon successful completion), AUD 3 million for Boda exploration, and about AUD 2 million for rehab and closure costs. Alkane ended the quarter with AUD 218 million in cash, a AUD 58 million increase from the September quarter. Total liquidity—cash, bullion, and listed investments—was AUD 246 million. Carter said debt was limited to equipment financing for mobile equipment.
Looking ahead, Earner said Alkane maintained fiscal 2026 consolidated AISC guidance of AUD 2,600 to AUD 2,900 per ounce and reiterated production guidance, while emphasizing planned investment of AUD 78 million to AUD 88 million into growth capital and exploration. He characterized the Newell Highway realignment at Tomingley as a “gateway” to the high-grade San Antonio open pits, expected to be accessible in 2027. On processing expansion at Tomingley, Earner said pre-crushing is currently delivering throughput gains the company had expected from a larger plant expansion, and he indicated that without a major new discovery comparable to Roswell, Alkane does not yet have ore resources to justify a major upgrade to significantly higher capacity.
In Q&A, Earner addressed the company’s newly announced issuer-sponsored ADR program, saying Alkane expects the sponsored ADR to attract more liquidity than the unsponsored alternative and to provide North American retail investors a more accessible vehicle. He also discussed the company’s interest in further index inclusion, arguing that ASX index entry has supported turnover and helped bring index funds onto the register, with the ASX 200 seen as an opportunity to deepen exposure to Australian superannuation capital.
On capital priorities, Earner said management currently believes shareholder value is best created by delivering on production, reinvesting to keep costs low, expanding the resource base, and pursuing undervalued inorganic opportunities. He said the board reviews dividends regularly and could consider returning cash if internal value-creation opportunities do not absorb the growing cash balance. Earner also said the company’s current plan is to deliver into its hedge book in accordance with schedules published in quarterly reports, citing gold price volatility and shareholder feedback preferring the company to remain a “known quantity” operationally rather than taking additional gold price risk.
About Alkane Resources (ASX:ALK)
Alkane Resources Ltd operates as a gold exploration and production company in Australia. The company explores for gold, copper, nickel, zinc, and silver deposits. It also invests in junior gold mining companies and projects. The company was incorporated in 1969 and is headquartered in West Perth, Australia.
