Alkane Resources

AU: ALK

AU$725m market cap

AU$1.25 last close

Alkane Resources is an Australian production and development company. It previously produced 70,000oz pa of gold from the open-pit operations at Tomingley gold mine, but is transitioning to underground operations and expects to produce c 32,000oz pa of gold.

Investment summary

Alkane is leveraging its expertise and cash balance (A$66.1m at end-Q320) to invest in both junior gold mining companies and projects at the same time as exploring around its existing mining operations at Tomingley. Simultaneously, it is also studying the potential to demerge its Dubbo rare earth project, where a pilot plant is under construction and into which Export Finance Australia has expressed a funding interest.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 128.8 67.4 31.5 4.81 26.0 11.7
2019A 92.5 30.5 26.2 4.60 27.2 18.0
2020E 67.3 22.9 21.3 2.51 49.8 58.2
2021E 76.9 31.9 27.5 3.44 36.3 28.0
Industry outlook

Our updated valuation of Alkane now attributes 25c/share in value to its Tomingley asset plus cash and 52c for its Dubbo asset. To this should then be added 14c for its investments and at least 6c for its maiden Roswell and San Antonio resources. To this total of 97c can then be added up to a further 73c in value from contingent assets (mostly the Boda prospect in the Northern Molong Porphyry Project which is developing into a genuine Au-Cu alkalic porphyry target), the final valuation for which will depend on future exploration success.

Last updated on 02/07/2020
Share price graph
Balance sheet
Forecast net cash (A$m) 78.1
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 27.6 100.0 201.5
Relative* 25.4 75.2 236.0
52-week high/low A$1.2/A$0.4
*% relative to local index
Key management
Ian Gandel Chairman
Nic Earner MD
Ian Chalmers Technical director

Content on Alkane Resources