Alkane Resources

AU: ALK

Market CapAU$512.2m

Last Close AU$0.86

Alkane Resources has two main assets in Central West New South Wales: 1) the Tomingley gold mine, where recent exploration has increased the mine life by at least eight years, from FY23 to FY31, and 2) 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 its (already twice increased) production guidance of 50–55koz for FY21 by nearly 4%, at an AISC of A$1,320/oz and Q122 results have similarly started in line with budget. In the meantime, exploration at Tomingley’s San Antonio and Roswell extensions has led to an extension of the mine’s life from CY23 until at least CY31 at higher levels of production (eg up to 115koz pa) and lower levels of cost (eg AISC of A$1,350–1,450/oz) than currently.

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 34.7 16.7
2021A 127.8 70.5 46.3 5.30 16.2 7.1
2022E 136.4 52.3 27.8 3.24 26.5 9.8
2023E 128.2 57.3 31.4 3.67 23.4 8.9
Industry outlook

Our most recent valuation of Alkane attributes 33c/share in value to Tomingley plus net cash. To this may then be added 1) 6c for the eventual development of the Roswell underground extension, 2) 16c given the current level of the gold price, 3) 4c for residual resources, 4) 3c for ongoing exploration success, 5) 15c for ALK’s investments in Calidus and Genesis and 6) up to 79c for exploration at Boda (where Alkane is aiming to delineate a maiden mineral resource estimate in Q1 CY22).

Last updated on 18/01/2022
Content on Alkane Resources
Alkane Resources – Boda resource estimate within five months
Metals & mining | Update | 16 November 2021
Alkane Resources – Boda and Tomingley continue to deliver
Metals & mining | Update | 1 September 2021
Alkane Resources – Revealing the fruits of its labours
Metals & mining | 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 (10.4) (7.5) 9.6
Relative* (11.7) (8.1) (1.8)
52-week high/low A$1.2/A$0.7
*% relative to local index
Key management
Ian Gandel Chairman
Nic Earner MD
Ian Chalmers Technical director