Alkane Resources (ASX:ALK) Doubles in a Year

Alkane Resources (ASX:ALK) Doubles in a Year — Hold Position or Add More?

Sonal Goyal

26 May 2026 04:33 PM AEST

Alkane Resources (ASX:ALK) Doubles in a Year — Hold Position or Add More?

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Highlights

Red Cloud Klondike Strike and Moelis Australia Securities both carry Buy ratings on ALK with a target price of AUD 2.30 — representing approximately 51% implied upside to the current price of AUD 1.52
Alkane Resources reported record Q3 FY2026 results: revenues of AUD 274 million, EBITDA of AUD 161 million, net profit of AUD 93 million (6.81 cents per share), and free Cash Flow of AUD 127.6 million
Cash, bullion, and liquid investments reached AUD 374 million at quarter end, with the Mandalay combination (adding Costerfield and Bjorkdal mines) now fully integrated into the Earnings base

Alkane Resources Limited (ASX:ALK) is trading at AUD 1.52 on 26 May 2026, unchanged on the day. Over the past 12 months, the stock has appreciated 100% — a doubling in value that reflects the transformative impact of the Mandalay Resources combination, record gold prices, and the addition of antimony revenues at a time when antimony pricing reached historically elevated levels. Both Red Cloud Klondike Strike and Moelis Australia Securities carry Buy ratings at AUD 2.30, implying approximately 51% further upside from the current price.

Two Broker Buy Ratings: What They Reflect

Red Cloud Klondike Strike and Moelis Australia Securities share the same AUD 2.30 target, an alignment that is analytically significant. Shared targets from independent Brokers with different analytical frameworks typically indicate convergence on similar production assumptions, gold price decks, and Balance Sheet projections.

Record Q3 2026 Results: The Numbers Behind the Ratings

Alkane released Q3 FY2026 financial results on 15 May 2026. Revenue for the quarter was AUD 274.4 million, compared to AUD 63.2 million in Q3 2025 — a 334% increase year-on-year. The increase was primarily driven by the addition of Costerfield and Bjorkdal following the Mandalay combination, combined with higher realised gold prices. Gold equivalent sales of 43,373 ounces were realised at an average price of AUD 6,315 per ounce, with antimony realised at AUD 34,394 per tonne.

EBITDA reached AUD 161.2 million for the quarter, compared to AUD 20.8 million in Q3 2025. Net profit was AUD 93.0 million, equating to 6.81 cents per share — versus AUD 8.1 million in the prior comparable period. Free cash flow was AUD 127.6 million. Cash, bullion, and liquid investments closed at AUD 374 million, comprising AUD 328 million in cash, AUD 34 million in bullion, and AUD 12 million in liquid investments. These are not incremental improvements — they are step-change results driven by a transformed Business scale.

The Mandalay Integration: From Single-Asset to Multi-Asset

Prior to the Mandalay combination, Alkane was primarily a Tomingley gold producer. The integration of Costerfield (Victoria, Australia — gold and antimony) and Bjorkdal (Sweden — gold) has expanded the production base, diversified the revenue mix, and introduced antimony as a secondary Commodity at a time when antimony pricing reached elevated levels. Costerfield contributed AUD 28.0 million in operating costs during Q3, and Bjorkdal contributed AUD 33.8 million — reflecting their scale within the expanded portfolio.

Cash operating costs per ounce of gold equivalent produced were AUD 2,037 in Q3 2026, identical to Q3 2025 — indicating that the expanded cost base is being managed at the same per-unit efficiency as the smaller prior operation. AISC per ounce increased to AUD 2,928 from AUD 2,590, partly due to higher sustaining Capital associated with the acquired Assets. Tomingley AISC fell to AUD 2,444 from AUD 2,590 year-on-year, reflecting increased gold production at the original asset.

Capital Allocation and Growth Projects

Total Capital Expenditure for Q3 2026 was AUD 46.9 million, compared to AUD 13.1 million in Q3 2025. The quarter included AUD 10 million Investment in growth projects at Tomingley, specifically the Newell Highway realignment, due for completion in the first half of 2027. Sustaining capital was AUD 24.3 million, of which AUD 19.0 million related to the Mandalay assets — predominantly underground capital development at Bjorkdal (AUD 7.1 million) and equipment replacements.

Exploration investment totalled AUD 12.5 million during the quarter: AUD 6.6 million at Costerfield, AUD 2.8 million at Bjorkdal, and AUD 3.0 million of non-operational exploratory drilling in NSW. The consistent allocation to exploration across all three asset locations reflects an intention to extend mine life at each operation rather than harvest existing reserves. Alkane has confirmed the company is on track to meet full-year 2026 guidance.

Gold and Antimony Price Tailwinds

The realised gold price of AUD 6,315 per ounce in Q3 2026 represents a materially elevated level relative to longer-run price assumptions in most broker models. Antimony, realised at AUD 34,394 per tonne (Q2 2026: AUD 42,488 per tonne), has softened quarter-on-quarter but remains above historical averages. The Q3 revenue uplift was therefore a product of both Volume growth from the Mandalay combination and commodity price strength, a combination that is unlikely to be extrapolated linearly by prudent broker models but which validates the earnings quality of the current business.

Conclusion

Alkane Resources presents a case study in value creation through Acquisition and commodity cycle alignment. The Mandalay combination has transformed the financial profile of the company — from a single-mine operator generating AUD 63 million in quarterly revenue to a three-mine, dual-commodity producer delivering AUD 274 million in a single quarter. Red Cloud and Moelis Buy ratings at AUD 2.30 reflect a view that the market has not yet fully priced this transformation. The stock trades at AUD 1.52 following a 100% 12-month return — the question is whether the next 51% to the broker target is as accessible as the previous 100%.

FAQs

Q: What broker ratings does Alkane Resources (ASX: ALK) currently carry?

A: Red Cloud Klondike Strike and Moelis Australia Securities both hold Buy ratings on ALK with a shared target price of AUD 2.30, implying approximately 51% upside from the current price of AUD 1.52.

Q: What were Alkane Q3 FY2026 financial results?

A: Alkane reported record revenues of AUD 274.4 million, EBITDA of AUD 161.2 million, net profit of AUD 93.0 million (6.81 cents per share), and free cash flow of AUD 127.6 million. Cash, bullion, and liquid investments reached AUD 374 million at quarter end.

Q: What is the Mandalay combination and how has it changed Alkane?

A: The combination with Mandalay Resources added the Costerfield mine (gold and antimony, Australia) and Bjorkdal mine (gold, Sweden) to the Tomingley operation. It transformed Alkane from a single-mine producer into a three-mine, dual-commodity company and is the primary driver of the step-change in quarterly financials.

Q: What are the two main commodities Alkane produces?

A: Alkane produces gold and antimony. In Q3 2026, gold equivalent sales totalled 43,373 ounces at AUD 6,315 per ounce, while antimony production was 377 tonnes at a realised price of AUD 34,394 per tonne.

Q: What is the Newell Highway realignment project at Tomingley?

A: The Newell Highway realignment is a growth capital project at the Tomingley mine in NSW, requiring the relocation of a section of highway to enable mine expansion. AUD 10 million was invested in the project during Q3 2026, and it is expected to be completed in the first half of 2027.

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