Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) posted a sharp jump in cash generation in the September quarter after completing its “merger of equals” with Mandalay Resources, pushing the gold-and-antimony producer into the S&P/ASX 300 index. Site operating cash flow rose to A$73 million as revenue reached A$147 million on sales of 30,010 gold-equivalent ounces, helping the company close with A$191 million in cash, bullion and listed investments even after repaying A$45 million of debt and absorbing A$25 million of one-off merger costs.
“It has been a significant quarter with the merger with Mandalay completing in early August… With the repayment of our A$45 million debt and the one-off transaction costs of A$25 million behind us we have a very solid balance sheet with A$191 million in cash, bullion and listed investments at quarter end,” ALK managing director Nic Earner said.
Production and prices
Group production for the statutory quarter came in at a record 30,511 gold-equivalent ounces (gold plus antimony converted into a gold measure), at an all-in sustaining cost (AISC) of A$2,988 per gold-equivalent ounce. As the merger was completed on August 5, the quarter included three months from Tomingley (New South Wales) but two months from Costerfield (Victoria) and Björkdal (Sweden).
On a like-for-like “full quarter” basis across all three mines, output was 36,407 gold-equivalent ounces at an AISC of A$3,036/oz.
Realised pricing provided a tailwind. The average gold price achieved across the group was A$4,896/oz, while antimony averaged A$35,646 per tonne. At Björkdal, provisionally priced concentrate sales were marked to higher quarter-end spot prices, lifting the simple average realised gold price to A$6,335/oz for the period.
Mine contributions and cost drivers
Tomingley poured 18,335 ounces at AISC A$2,628/oz, generating A$79 million of revenue.
Management flagged short-term explosives quality issues that temporarily affected ore production, with the supplier engaged to prevent recurrence.
Costerfield delivered 6,189 gold-equivalent ounces at AISC A$2,451/oz, and Björkdal produced 5,987 ounces at AISC A$4,010/oz, where summer holidays and storm-related power interruptions constrained processing despite solid mining rates.
The group’s cost profile reflected sustaining capital of A$15 million and exploration spend of A$5.6 million in the statutory quarter, alongside A$6 million of growth capital, chiefly for the Newell Highway realignment tied to Tomingley’s expansion.
The following chart shows AISC and all-in cost comparisons by site, highlighting Björkdal as the highest-cost contributor this quarter. A separate cash-bridge graphic on the same page charts the progression from operating cash flows to the A$160 million quarter-end cash balance.
Balance sheet and hedging
Alkane ended the quarter unencumbered by its prior project loan after repayment and with modest equipment finance outstanding.
The company also delivered 7,250 ounces into legacy forward sales at an average A$2,832/oz during the quarter and retains 54,350 ounces of forward contracts out to June 2027 at an average A$2,859/oz. The company added Swedish-krona gold put options covering Björkdal’s 2026 output to protect downside pricing.
Outlook
Alkane reiterated full-year guidance for 160,000–175,000 gold-equivalent ounces at A$2,600–A$2,900/oz AISC, which assumes a full 12 months’ contribution from all three operations.
With merger integration underway, management points to operational improvements at Costerfield and throughput recovery at Björkdal, while Tomingley advances highway realignment works to enable longer-term mine plans.
Notes: “All-in sustaining cost” is a widely used industry metric that captures cash operating costs plus sustaining capital and royalties. “Gold-equivalent ounces” convert antimony output to a gold basis using prevailing prices to provide a single production measure.