Alkane Resources

AU: ALK

AU$536.5m market cap

AU$0.93 last close

Alkane Resources is an Australian production and development company. It previously produced 70,000oz Au pa from its open pit at Tomingley, but is now transitioning to underground operations and expects to produce around 32,000oz Au pa.

Investment summary

Alkane is seeking to leverage its cash balance (A$73.9m including bullion and listed investments as at end-Q120) and expertise by pursuing a strategy of investing in junior gold mining companies and projects at the same time as exploring the immediate environs of its existing mining operations in the Tomingley Corridor ahead of underground mining. To this end, in December, Alkane raised a further A$54.8m via equity. It is also studying a potential demerger of its Dubbo rare earth project, where a pilot plant is under construction.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 128.8 67.4 31.5 4.70 19.7 N/A
2019A 92.5 30.5 26.2 4.55 20.3 N/A
2020E 63.7 28.6 20.7 2.97 31.1 N/A
2021E 76.9 31.6 23.6 4.50 20.6 N/A
Industry outlook

Alkane is in the process of transitioning from treating the mid-grade stockpile to underground mining at Tomingley and produced 7,497oz gold in Q120, which caused it to increase its production guidance for FY20 to 30–35koz (cf 27-32koz previously) at an AISC of A$1,250–1,400/oz. In the meantime, it is prioritising drilling at its Northern Molong Gold-Copper Porphyry Project, where previous intercepts included 502m at a grade of 0.48g/t Au and 0.20% Cu.

Last updated on 18/02/2020
Share price graph
Balance sheet
Forecast net cash (A$m) 49.3
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 27.6 47.0 374.8
Relative* 27.1 40.1 306.5
52-week high/low A$1.0/A$0.2
*% relative to local index
Key management
Ian Gandel Chairman
Nic Earner MD
Ian Chalmers Technical director

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