Q&A

Alkane Resources released its latest annual results, for the period to 30 June 2026, on 21 August 2026; on our pro forma basis, FY26 revenue was A$962.6m, normalised pre-tax profit was A$328.0m and normalised EPS was A$0.18. This basis treats the Mandalay Resources merger as effective from 30 June 2025, so the figures differ slightly from the statutory FY26 financials. Revenue was exactly in line with our expectations, while net profit came within A$1.2m of our prior expectation. Net cash rose from an estimated pro forma A$131.0m at end-June 2025 to A$389.5m at end-June 2026 on an ex-dividend basis.

After Q127 operational results, our FY27 forecasts for Alkane Resources are revenue of A$889.1m, normalised pre-tax profit of A$277.7m and EPS of A$0.15. That EPS estimate, 14.89c, is conservative within the range of analysts' estimates. For FY28, we forecast revenue of A$814.8m, normalised pre-tax profit of A$206.5m and EPS of A$0.08. These forecasts assume that the spot gold price of US$4,000/oz prevails until 31 December 2027, before reverting to long-term levels. Our forecasts of 30 October 2026 reflect an 4.4% fall in the gold price since our previous note of 2 October 2026, from US$4,182/oz and a 1.1% strengthening of Australian dollar against the US dollar.

Yes. Alkane Resources proposed a maiden dividend of 2c/share for FY26, which it confirmed alongside its FY26 financial results on 21 August. The dividend totals A$27.3m. On the same day, Alkane announced an on-market share buyback of up to A$50m, to be executed over the next 12 months at the company's discretion. At the time of our 27 August 2026 note, the dividend and buyback together could return A$77.3m to shareholders over the next 12 months. Our cash projections to FY31 assume a flat annual dividend of 2c/share while Alkane builds cash for Boda-Kaiser.

Alkane Resources' investment case rests on being a profitable, cash-generating multi-asset company with the potential for dilution-free development. At our long-term US$1,941/oz gold price, we estimate Alkane could accumulate A$656m in net cash by the end of FY31, or 38% of Boda-Kaiser's A$1,712m pre-production capex requirement, which we believe would remove the need to raise equity or seek a strategic partner. One risk is a lower gold price: however, our core valuation of A$0.843/share uses a very conservative long-term gold price of US$1,941/oz, against A$2.09/share at US$4,000/oz. To this should then be added at least A$0.20/share for Boda-Kaiser, or A$1.27/share at current metals prices. Taking all assets into account, we estimate that, at the current gold price, the total value of Alkane could approach A$4.00/share. This is corroborated by a CAPM-type, cash flow and terminal valuation approach, which yields a comparable valuation of A$4.12/share, assuming a long-term real gold price of A$4,000/oz, a long-term cash flow per share growth rate of 4.1% post-FY30 (to match the real terms gold price increase pa since 1967) and extensions to the lives of its three mines ad infinitum. Alternatively, since FY18, Alkane has traded at an average P/E multiple of 12.7x basic adjusted EPS (within a range of 5.1–28.0x; Exhibit 8). Applying this 12.7x multiple to our estimate for FY27 implies an average share price for Alkane in FY27 of A$1.90.