Alkane Resources (ASX: ALK)

Currency in AUD

Last close As at 04/02/2023

AUD0.70

0.03 (4.48%)

Market capitalisation

AUD416m

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.

Our valuation of Alkane continues to be underpinned by Tomingley (A$0.57/share). Liquid assets contribute a further A$0.06/share and Boda a further A$0.31/share. As such, we calculate that Alkane’s share price is now more than 100% covered by the value of tangible assets, with up to an additional A$0.59/share available in the form of further exploration success at the Northern Molong Porphyry Project as well as the gold price and the ever-increasing probability of the Roswell underground extension going ahead.

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Equity Analyst

Lord Ashbourne

Lord Ashbourne

Director, Energy & Resources

Key Management

  • Ian Chalmers

    Technical director

  • Ian Gandel

    Chairman

  • Nic Earner

    MD

Balance Sheet

Forecast net cash (A$m)

49.2

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 34.6 13.4 (12.7)
Relative 25.8 5.3 (16.4)
52 week high/low A$1.3/A$0.5

Financials

Alkane upgraded its FY23 guidance for gold production from 55,000–60,000oz to 62,000–70,000oz following H123 production at Tomingley of 37,790oz, lowering its expected unit costs to an all-in sustaining cost of A$1,550–1,800/oz, down from previous guidance of A$1,650–1,900/oz. Exploration has already led to an increase in Tomingley’s life from CY23 until CY31. Subsequent work has increased the Roswell resource by 37% as well as delineating a maiden resource at Boda of 5.2Moz Au or 10.1Moz AuE.

Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (fd) (c) P/E (x) P/CF (x)
2021A 127.8 70.5 46.3 5.30 13.6 5.9
2022A 165.0 87.5 52.1 3.63 19.8 3.1
2023E 140.1 69.2 37.8 4.39 16.4 6.2
2024E N/A N/A N/A N/A N/A N/A

Research

Metals & Mining

Alkane Resources — Coming to fruition

Metals & Mining

Alkane Resources — Boda bodes well

Metals & Mining

Alkane Resources — Reborn

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