Alkane Resources

AU: ALK

Market CapAU$384m

Last Close AU$0.65

Alkane Resources has two main assets in Central West New South Wales: the Tomingley gold mine, where recent exploration has increased the mine life by at least eight years, from FY23 to FY31, and its Boda prospect at Northern Molong, which is shaping up to be a tier 1 alkalic porphyry district.

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Investment summary

Alkane exceeded guidance in FY21 by nearly 4% and production of 44koz in 9M22 is in line with budget (at an all-in sustaining cost (AISC) guidance range of A$1,500–1,650/oz). Exploration at San Antonio and Roswell has already led to an increase in Tomingley’s life from CY23 until CY31 at production levels up to 115koz pa and AISC down to A$1,350–1,450/oz. Subsequent exploration has also increased the Roswell resource by 37%.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2020A 72.5 29.4 20.6 2.48 26.2 12.6
2021A 127.8 70.5 46.3 5.30 12.3 5.4
2022E 136.4 52.3 27.8 3.24 20.1 7.4
2023E 128.2 57.3 31.4 3.67 17.7 6.8
Industry outlook

Our most recent valuation of Alkane attributed 33c/share in value to Tomingley plus net cash. To this could then be added 1) 6c for the eventual development of the Roswell underground extension, 2) 16c given the then level of the gold price (US$1,818/oz), 3) 4c for residual resources, 4) 3c for ongoing exploration success, 5) 15c for Alkane’s investments in Calidus and Genesis (albeit it has now sold the majority of its Genesis stake), and 6) up to 79c for exploration at Boda (where Alkane is aiming to announce a maiden resource imminently).

Last updated on 01/07/2022
Content on Alkane Resources
Alkane Resources – Boda resource estimate within five months
Metals & mining | research Update | 16 November 2021
Alkane Resources – Boda and Tomingley continue to deliver
Metals & mining | research Update | 1 September 2021
Alkane Resources – Revealing the fruits of its labours
Metals & mining | research Outlook | 9 July 2021
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Sector
Metals & mining
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Share price graph
Balance sheet
Forecast net debt (m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (36.8) (45.3) (42.4)
Relative* (29.8) (36.7) (35.4)
52-week high/low A$1.3/A$0.6
*% relative to local index
Key management
Ian Gandel Chairman
Nic Earner MD
Ian Chalmers Technical director

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