Good value relative to history

Since FY18, Alkane has traded at an average P/E multiple of 13.4x basic adjusted EPS (within a range of 5.1–28.0x – see Exhibit 14). Applying this 13.4x multiple to our estimates implies an average share price for Alkane of A$2.75 in FY26 and one of A$2.49 in FY27. At the current gold price, it implies a share price for Alkane of A$2.75 in FY26 (unchanged), but one of A$4.51 in FY27 and A$6.86 in FY28.

Good value relative to peers

Alkane trades at a discount to its peers on 52% of valuation measures (66 out of 125 measures) based on our forecasts (at Edison’s relatively low gold price) and 64% based on consensus forecasts (see Exhibit 13). At US$4,500/oz Au, however, it trades at a discount to its peers on 96% of measures, based on Edison’s forecasts.

Valuation: Approaching A$5.00/share

Our core, absolute valuation of Alkane has remained steady at A$0.849/share (cf A$0.858/share previously) notwithstanding the noticeable strengthening of the Australian dollar against the US dollar in recent weeks. However, this valuation is conducted at Edison’s long-term (real) gold price of US$1,866/oz. At the current (real) price of gold of US$4,500/oz at the time of writing, it trebles to A$2.98/share, generating EPS of A$0.33–0.51/share from FY27 to FY34 (Exhibit 12). To this should then be added at least A$0.20/share for Boda-Kaiser, or A$1.35/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$5.00/share (Exhibit 15).

Q226 operational results

Alkane released its Q226 quarterly activities report on 27 January. The main highlights of its announcement were:

• Record quarterly gold production of 43,663oz gold equivalent (AuE) (174,652oz pa annualised cf FY26 guidance of 160–175koz) at an AISC of A$2,739oz AuE (cf FY26 guidance of A$2,600–2,900/oz), of which 44,084oz AuE were sold at an average price of A$5,785/oz Au to generate A$256m in revenue.
• Site operating cash flow of A$133m for the quarter (but could have been A$151m except for the timing of a final payment in January for a shipment of concentrate made in December).
• The discovery at Tomingley of a gold rich domain adjacent to McLeans and close to current underground infrastructure, including an intersection of 4.36g/t Au over 26m, which itself included an intersection of 22.8g/t Au over 3.3m.
• At Storheden, at Björkdal, extension drilling doubled the depth extent of the known system to 464m and the strike extent to 2.7km, including intercepts of 142.0g/t Au over 0.60m (estimated true width 0.25m) and 111.0g/t Au over 0.50m (estimated true width 0.25m).
• Cash, bullion and listed investments as at 31 December of A$246m after A$17m in corporate income tax payments during the quarter.

Relative to our prior expectations, Tomingley had an excellent quarter and produced 1,925oz Au (9.5%) above our prior estimate, with both mined and milled grades exceeding our forecasts. Simultaneously, Costerfield’s grade returned to over 10g/t for the first time since Q424, while the processed grade at Björkdal rose back to over 1.00g/t after falling to 0.9g/t in Q126. Costs, in general, were well controlled.

In the wake of Q2 results, we are forecasting production for the group of 163.8koz AuE in FY26, which is well within the guidance range of 160–175koz AuE at an AISC of A$2,600–2,900/oz Au for the full 12-month period (cf the statutory reporting period from 5 August, when the merger with Mandalay was completed).

Q226 and CY25 versus both Alkane and Mandalay guidance

Whereas Alkane’s year-end is June, Mandalay’s was, historically, December. Within this context, Mandalay provided the market with operational guidance for CY25, which is reproduced in Exhibit 1, below. With the caveat that Alkane changed guidance after the merger with Mandalay was completed and only took operational control of the assets on 5 August, we have been able to estimate the performance of both Costerfield and Björkdal in CY25 relative to Mandalay’s original guidance, below:

In general, it can be seen that Björkdal and Costerfield achieved their aggregate production target, albeit at a slightly higher cost and with a slight underperformance at Björkdal compensated for by Costerfield. While both mines were probably over budget in terms of capital expenditure during the (calendar) year, it is worth noting that at Costerfield in particular we estimate that prior management had expended c US$14.3m (ie 90–100%) of the mine’s annual budget by mid-year before Alkane management smoothed the quarterly expenditure rate in Q3 and Q4 of CY25 (in contrast to Björkdal, where we estimate that capital expenditure picked up in H2 CY25).

Notwithstanding Mandalay’s prior guidance, on 9 September, Alkane provided its own guidance for the combined group’s operations for FY26 (ie end-June 2025 to end-June 2026), which is reproduced, below.

FY26 capex

Björkdal FY26 AISC guidance includes a significant amount of sustaining capital, which will provide multi-year benefits, including increased capital development in order to access new ore, new water management infrastructure, tailings dam construction and a major fleet replacement programme that falls into the new financial year. In the meantime, exploration expenditure will include in-fill and extensional drilling in the North Zone, Eastern Extension, Storheden and Norrberget to build high-grade inventory and support future mining studies. Once these initiatives are completed, AISC is expected to return to more normal levels in FY27.

Growth capital expenditures at Tomingley in FY26 include realignment and associated site services’ infrastructure on the Newell Highway. In order to commence open-cut mining at San Antonio, the Newell Highway will need to be relocated c 1km to the west of its existing corridor. This is a substantial body of work that has been through several design iterations over a number of years to receive full approval from Transport for NSW. The ore from the open-cut operations will then be added to underground mine production at Roswell. Construction of the diversion has now commenced, with work expected to be completed in H1 CY27, after which open-cut mining at San Antonio will commence. In the meantime, exploration has been targeting reserve and resource growth at Caloma 2, Roswell, Wyoming and Macleans.

At Costerfield, the predominant growth expenditure will be on exploration, focusing on near-mine and regional drilling at the True Blue, Sub KC, Brunswick South and Kendall zones to support further extensions of the mine life and potential processing expansion.

FY26 production

The main source of ore to the plant at Tomingley is now Roswell and, while only a small portion of the overall ore reserve has been mined, initial grade reconciliations from the deposit are reported to be performing well. At the same time, the flotation and fine grind circuit and the paste plant are now in steady-state operation, having rectified the problem of high rates of wear that caused ore to be ground to 14 microns instead of 12 microns in Q1 and resulted in sub-optimal metallurgical recovery.

At Costerfield, production will be derived from the Youle zone in FY26, which is planned to produce at higher antimony grades, and the Shepherd zone, which is predominantly gold. Work continues to prioritise operational consistency across all aspects of the operation and trials will occur in Q3 to determine the potential benefits of pre-crushing ore feed to further improve throughput, crusher downtime and blend control, with the continuous optimisation of blending and recovery continuing to be a focus.

Mill throughput at Björkdal in Q226 was slightly lower than in Q1, primarily owing to mill linings not wearing at the anticipated rate, which limited the maximum allowable mill load. In mitigation, the completion and commissioning of a new return water system from the mine has had a positive impact on flotation performance to date, with the more stable water temperature compared with river-sourced water enhancing process stability and contributing to improved recoveries. This new water redundancy also reduces the mill’s vulnerability to seasonal fluctuations in river conditions. At Björkdal, production in FY26 will be derived from the Main zone, Lake zone and three levels in the lower Aurora zone.

In the light of its guidance, we have formulated quarterly forecasts for each of Alkane’s three operating mines for the remainder of the financial year, as follows (including actual numbers to December 2025):

Of note for all three operations is the continuation of the improvements in production that began after Alkane formally took control of Mandalay’s operations on 5 August. A comparison of the statutory (5 August to 30 September) and full period (1 July to 30 September) production numbers for Costerfield and Björkdal indicates that both mines produced more gold pro rata in the period 5 August to 30 September than in the period 1 July to 5 August and this is a trend that has clearly continued into Q226.

Within this context, it is worth noting that Costerfield is currently mining below both its reserve and resource grade for antimony, while Björkdal is mining below both its reserve and its resource grade for gold. These therefore represent potential upside for both assets relative to their official mine plans.

A note on gold prices

The average gold price in H126 was US$3,802/oz (source: Bloomberg). Consistent with our general policy, our gold price forecast for CY26 now assumes that the current spot price of US$4,500/oz will prevail for the remainder of the calendar year, before reverting to our long-term levels as follows:

The gold prices in Exhibit 4 are derived with respect to historical precedent. However, almost the only modern precedent to today’s market is that of 1970–81 when gold rose from its post-war currency peg of US$35/oz to a peak of US$850/oz in January 1980 before falling by over 60% in the following two years. The analysis above implicitly assumes a repeat of the same pattern, with 2026 being an analogue to 1980 and 2027 being an analogue to 1981. However, there are material differences between the two periods of time. The biggest is that, in 1980, the US was still the world’s largest creditor nation and what suddenly reversed gold’s fortunes was the policy adopted by the then-new Federal Reserve chairman, Paul Volcker, to ‘defend the value of the US dollar.’ That entailed sharply raising real interest rates from near zero to around 4% (among other things, causing a sharp recession in the US and most other western countries in the early 1980s) where they remained for almost the next two decades. Now, however, the US is the world’s largest debtor nation and no one in either the US administration or the Federal Reserve (not even Kevin Warsh) is talking about the defence of the dollar. In fact, quite the opposite: they are talking about allowing the dollar to find a level at which US exports can compete on world markets and stimulating the domestic economy with real interest rates as low as possible. Hence, all the forces that have pushed gold to its recent peak over US$5,000/oz are still pushing it in the same direction (ie upwards).

President Trump’s nomination for the next chairman of the Federal Reserve, Kevin Warsh, appeared to the be catalyst for gold’s sell-off from its recent record highs late last month. He is reported to be in alignment with Mr Trump in wanting to shrink the Fed’s balance sheet at the same time as cutting rates dramatically, thus effectively tightening liquidity at the long end of the yield curve and cutting short-term rates. In themselves, neither a steepening of the yield curve nor cuts to the Fed’s balance sheet are traditionally positive harbingers for gold. However, there must be a certain degree of scepticism as to whether and to what extent these twin aims can be achieved. With the Fed Funds rate at 3.5–3.75% at the short end of the yield curve, there is apparently minimal scope to cut rates further with US CPI inflation sticking at 2.7%. At the other end of the spectrum, the yield of the 30-year Treasury of 4.8% (real yield 2.1%) is, as yet, not competitive compared with gold’s compound average annual growth rate of 4.1% in real terms since 1967.

While it is tempting to look at graphs of the gold price and to attempt to call a ‘top’, investors should be cautious as many of the forces that drive it are often self-reinforcing, especially the fact that above ground stocks of gold of c 216,000 tonnes dwarf newly mined supply of c 3,700 tonnes per year. Hence, traditional supply and demand analysis often fails in the case of gold, where price discovery tends to occur among existing holders, rather than new buyers and new sellers. This means, while the price has appreciated a lot, in the absence of a fundamental shift in macroeconomic policy, there is no reason to suppose that it cannot continue to rise for many years to come. The following demonstrates the extent to which this is possible:

• The gold price required to cover the total US monetary base is US$20,273/oz. This is analogous to the classical gold standard, according to which the Federal Reserve was required to hold enough gold to redeem all of its liabilities (ie US dollars) that could be in circulation. Although President Nixon formally closed this dollar window in August 1971, in the era of a floating gold price, US gold reserves were nevertheless still able to cover the US total monetary base as recently as 1980.
• The gold price required to cover the US net international investment position is US$109,416/oz. While this number appears very large, it would theoretically allow the US to cover all of its accumulated deficits since c 1979 and, to a certain extent, reset its economy (albeit with a currency unbacked by gold).
• The gold price required to cover the US net international investment position and to cover its monetary base is US$129,690/oz.

While gold would need to increase c 29 times to get from its level now to US$129,690/oz, it is perhaps worth noting that it has already gone up by 129 times to get from its level of US$35/oz in 1967 to its current price. The main impediment to the last two scenarios will be the reaction of other (creditor nation) central banks. The world’s largest three creditor nations are Germany, Japan and China. While Germany and Japan already have currencies that freely float against the US dollar, China does not. With the US facing the prospect of a material decline in the purchasing power of the dollar, in continuing to maintain its currency peg, China will also subject its citizens to a similar decline at a time when this is perhaps not their expectation. Therefore, at some point along this trajectory, it is likely that the People’s Bank of China will abandon this currency peg in order to both preserve its citizens’ wealth and to manage the transition of China’s workers from global producers to global consumers, albeit at the cost of accepting a much weaker US dollar and the US becoming much more competitive in global export markets. Of course, it is possible for the US and China to reach some sort of accommodation before the US dollar reaches the levels discussed. However, this analysis demonstrates that, in the absence of a major change in policy direction from either nation, the bull market for gold may be very far from over.

Updated FY26 forecasts

For the purposes of our estimates and forecasts, we have considered pre-merger Alkane Resources as a distinct entity until 30 June 2025, whereupon we assume the effective balance sheet merger of Alkane and Mandalay, followed by financial forecasts for the combined entity from that date. This amounts to a pro forma treatment of its results. Alkane’s statutory accounts will consolidate the two companies on 5 August and FY26 will reflect results from pre-merger Alkane for the 36 days to 5 August and combined results for the 329 days thereafter. Both forecasts are shown in the exhibit below, although for the purposes of our formal forecasts and valuations only pro forma estimates are considered so that they relate to comparable 12-month periods of time.

These forecasts compare to those of the broader market as follows:

Longer-term exploration and development initiatives

Tomingley

At Tomingley, we expect plant capacity to be maintained at 1.3Mtpa, rather than being raised to 1.5Mtpa, thereby saving incremental capital expenditure of c A$30m while simultaneously increasing the reserve life of the mine by approximately three years. For the moment, we have not incorporated any additional exploration upside into Tomingley’s mine plan, although we note that, a) including all sources, there remains a further c 7.6 years of potential resource life available to the operation once reserves are depleted and b) it has always been successful in the past in drilling up new resources and then converting them into reserves (NB see Alkane’s announcement, dated 3 November 2025, regarding the discovery of new mineralisation at McLeans as well as the exploration disclosures of its Quarterly Activities Reports on 29 October and 27 January). Recent exploration at Tomingley has concentrated on extension drilling underground at Wyoming Three below the open cut and testing the potential of the northern extension to the andesite that is host to the majority of the Caloma gold resource at Caloma North. However, focus in now beginning to shift to the broader trend between Tomingley and Peak Hill. In particular:

• Resource expansion drilling at McLeans (see Alkane announcement: Tomingley Drilling Discovers New Mineralisation at McLeans, on 3 November 2025), where recent results include:
  • 26m at 4.36g/t Au including 3.3m at 22.8g/t Au
  • 8m at 4.38g/t Au including 0.2m at 12.6g/t Au.
• Resource infill drilling of Roswell Western Monzodiorite, where results include:
  • 7.9m at 14.6g/t Au including 1.1m at 84.4g/t Au.
  • 6.5m at 8.03g/t Au including 0.9m at 37.3g/t Au.
• Drilling to assess the potential of El Paso to host a gold resource that could easily be accommodated at the Tomingley processing plant only 6km distant and where recent results include:
  • 8.2m at 3.74g/t Au including 0.1m at 25.0g/t Au.
• Testing the potential for copper-gold porphyry mineralisation beneath the (refractory) Peak Hill epithermal deposits.
• Electrical geophysical targeting and subsequent drill testing for low sulphidation epithermal gold quartz veins at Glen Isla, c 6km east of Tomingley.

Costerfield

Costerfield is notable for having higher gold grades at depth and higher antimony grades near the surface. Exploration at this asset is directed towards extending the life of the mine from its current, formal three years of reserve life (something, as at Tomingley, that it has been consistently successful in achieving in the past) to five to seven years of reserve plus approximately three years of resource life. The Costerfield mine has two portals at Augusta and Brunswick (see Exhibit 9, below) and its principal exploration focus is the True Blue corridor, where there are c 4km of shallow workings coincident with a prospective geochemical signature and which appears to represent a parallel structure approximately 2km east of the current mining area, beneath which Alkane has three rigs predominantly focused on infill drilling. After True Blue, Alkane’s second priority is Kendall, where it is exploring a series of veins above the currently active Youle and Shepherd mining fronts, which are believed to host potential 500koz systems. Thereafter:

• Brunswick South drilling seeks to expand on the high-grade discovery made earlier in the year just 350m from the horizontal drive at the Brunswick mine, where grades twice those currently mined were intersected both above and below existing infrastructure. Once expansion testing is complete, exploration activity will progress to infill drilling later this year.
• Sub King Cobra (Sub KC) drilling aims to both infill and extend mineral resources below the Cuffley and Augusta workings at a depth of c 1,200m to test for additional Costerfield-type structures.

Björkdal

Björkdal is a large, mineralised system that is currently supporting production of c 1.4Mtpa, of which c 950ktpa is derived from the underground mine and 450ktpa is derived from low-grade stockpiles on surface. In contrast to Costerfield (where the focus is on tonnage), at Björkdal Alkane’s focus is on maximising the grade of the underground mine in order to achieve a consistent 50–55koz in production per year and to drive down unit costs (AISC A$4,117/oz in Q226) by c 20% and cement it as Alkane’s longest life asset (based on reserves).

The Björkdal mine is situated on a large marble structure, dipping at c 30°, where local stresses have fractured the host rock, opening it up as a pathway for mineralised fluids. As a result, the nature of the mineralisation is discontinuous such that maximising grade effectively conflates with seeking new ore sources, which, in turn, will allow Alkane to increase its development rate and to open up new areas for mining. The orebody is currently being mined with a focus on the northern and eastern depth extension. Within this context, Alkane’s immediate exploration activity is therefore:

• Infill and extension drilling in the northwestern continuation of the Björkdal deposit in order to extend underground mining operations within the North Zone (see Exhibit 10).
• Infill and extension drilling in the separate northeastern plunge of the Björkdal deposit from the Main Zone.
• The depth extension of the recently modelled Storheden resources as a precursor to developing a mine plan for the area within the next 12 months and lifting the mining rate by opening up a new mining front with a new mining fleet. In December, the results of the recent Storheden drilling were released. Highlights of the announcement include an extension of the known depth of the deposit to 464m and strike length to 2.7km with a series of Björkdal-style veins interpreted across three main target domains. Assay highlights included 142.0g/t gold over 0.60m (estimate true width 0.25m) and 111.0g/t gold over 0.50m (estimated true width 0.25m).
• Drilling out the extension of the potential 3g/t open cut Norrberget resource, 5km distant from Björkdal, albeit with the caveat that mining in this area will also require a new permit.

Boda-Kaiser

Alkane will be commencing water, infrastructure and flora and fauna studies this year at Boda-Kaiser, as well as simultaneously progressing it towards a Project Approval application. Its exploration focus is:

• Exploring Boda 4 for potential southern extensions to the Boda 2-3 deposit for new copper-gold porphyry centres (which often occur in clusters).
• Drill testing the geology between Boda and Kaiser (which is assumed to be fault-displaced) for new high-grade copper-gold hydrothermal centres.
• Extension drilling immediately south of the Kaiser resource.
• Drill testing via the induced polarisation (IP) and changeability target associated with phyllic alteration for copper-gold porphyry mineralisation at Driell Creek.
• Further drill testing of the monzonite hosting copper-gold mineralisation at Glen Hollow, where previous results include 45m at 0.87g/t Au and 0.15% Cu.
• Testing an IP changeability response from the 2024 survey within the Comobella Intrusive Complex at Haddington, where historical results include 18m at 0.95g/t Au and 0.15% Cu.
• An airborne Mobile Magneto-Telluric survey over the northern half of the Northern Molong Porphyry project to identify new conductors hidden beneath the Gunnedah Basin as possible sulphide mineralisation.

Hereafter, Alkane’s target timeline at Boda-Kaiser is:

• 2025–27:
  • Stakeholder consultation
  • Environmental studies
  • Remaining property negotiations
  • Site selection
  • Rail, power, road, water and windfarm negotiations
• 2027–29:
  • Project approvals
• 2029–31:
  • Bankable feasibility study
  • Financing and final investment decision
• 2031–33:
  • Construction and commissioning

Corporate

On 30 January, Alkane announced it had executed a term sheet comprising a conditional placement and earn-in agreement with Nagambie Resources in relation to the latter’s core gold-antimony project tenement package, located on a mining lease approximately 40km north-east of Alkane’s Costerfield operations in Victoria. To date, there has been limited deep drilling to test potential depth extensions at Nagambie, with Alkane’s proposed investment now expected to target this potential as a priority.

Strategically, and in the longer term, Alkane is also pursuing further inorganic growth opportunities. While these could come in all shapes and sizes, management has indicated that such targets are likely to be located in Australia, New Zealand, the US, Canada and/or Scandinavia and are likely to be producing (or within two years of production) at a rate of c 70–110koz per year. Ideally, any business combination would be completed as:

• a merger of equals (such as Alkane completed with Mandalay);
• the acquisition of a developer (subject to price); or
• the acquisition of an asset lacking critical capital.

Valuation

Updated absolute valuation

Our valuation of Alkane (post-merger) is based on the present value of our forecast life of operations dividend stream to investors discounted back to present value at a (real) rate of 10% per year, excluding discretionary exploration expenditure. Taking into account Q2 operational results and our forecasts for the remainder of FY26 (Exhibit 3), our valuation of the dividend stream potentially available to Alkane shareholders from its combined mining operations has held steady at A$0.849/share (cf A$0.858/share previously). This increases to A$0.862/share once the value of residual resources at Tomingley, San Antonio and Roswell is also included.

A graph of our updated expectations for Alkane’s EPS, (maximum potential) DPS and valuation from the present to end-FY41 (at a long-term gold price of US$1,866/oz from 2030 onwards in real 2025 US dollar terms) is as follows:

Note that the DPS columns in Exhibits 11 and 12 represent theoretical, maximum potential dividends that we believe could be paid by the company, rather than actual dividends forecast, and are used for valuation purposes only. In reality and given the likely capital requirements of the Northern Molong Porphyry project, in particular, a balance will need to be found between shareholder returns in the form of capital growth and dividend distributions. However, with the merged company now showing net cash on its balance sheet and with the project finance facility provided by Macquarie for the San Antonio-Roswell project having been fully repaid, we believe that the prospects for a near- to medium-term dividend payout to shareholders have improved markedly.

In the meantime, it is worth noting that the valuation above is calculated at a conservative long-term (real) gold price of US$1,866/oz in 2025 US dollar terms (see Exhibit 4). At the current gold price of US$4,500/oz, this valuation more than trebles to A$2.98/share.

At the same time, Alkane remains cheap relative to its peers on an enterprise value equating to just US$113.63 per resource ounce, despite being a profitable, cash-generating multi-asset company with the potential for dilution-free development.

Relative valuation

Alkane trades at a discount to its peers on 52% of the valuation measures shown in Exhibit 13 below (66 out of 125 individual instances) based on Edison’s forecasts and 64% based on consensus forecasts (80 out of 123 individual instances). However, this is at Edison’s exceptionally conservative gold prices of US$2,068/oz in CY27 and US$1,863/oz in CY28 etcetera, as per Exhibit 4. Assuming that the current price of gold of US$4,500/oz prevails over the next three years, Alkane trades at a discount to its peers on 96% of the valuation measures shown (120 out of 125 individual instances).

Based on Edison’s gold price forecasts, the average price implied for Alkane by its peers is A$2.95/share in FY26. Based on the current gold price of US$4,500/oz ad infinitum, it is A$2.95/share in FY26, A$2.72/share in FY27 and A$3.09/share in FY28.

Historical valuation

Since FY18, Alkane has traded within a contemporary year 1 P/E range of 5.1–28.0x and at an average P/E level of 13.4x basic adjusted EPS, as shown below.

Applying this 13.4x multiple to our adjusted EPS estimates for the next three years implies an average share price for Alkane of A$2.75 in FY26 and A$2.49 in FY27, before falling to A$1.30 in FY28 (when our forecast gold price declines to the level shown in Exhibit 4).

At the current price of gold, this 13.4x multiple implies an average share price for Alkane of A$2.75 in FY26, A$4.51 in FY27 and A$6.86 in FY28.

Alkane group valuation

Taking the wider group’s assets into consideration, a summary of our Alkane group valuation is as follows:

While the per share valuation of Boda-Kaiser has been diluted by Alkane’s merger with Mandalay, we believe that this is more than made up for by the combined entity’s increased cash generation potential until 2031, which has the ability to fund the project’s pre-production capex requirement in their entirety (see Financials below). For the purposes of our valuation of Boda-Kaiser, we have included the in-situ valuation of the combined resource as a core asset. We have included the difference between the discounted dividend flow valuation and the in-situ valuation as a contingent asset. However, we note the similarity between the two, which confers confidence in the valuation (see our July 2024 note). In due course, while we would expect the Boda and Kaiser in-situ valuation to remain relatively constant (all other things being equal), we would expect the discounted dividend flow valuation of the asset to rise with the passage of time and the attainment of the various milestones inherent in bringing such a deposit to account. In the meantime, we have valued Boda 2, 3 and 4 at zero as a core asset on the basis that it has yet to delineate a resource, but at 22c as a contingent asset in the event that it is shown to be as large as the original Boda deposit (which we think is a possibility, see Alkane’s Boda-Kaiser regional exploration update).

Financials

As at 30 June 2025, Alkane had net debt on its balance sheet of A$11.2m (cf A$27.7m as at end December 2024) and we estimate pro forma net cash of A$131.0m. As at 30 September, the company reported that it had A$160m in cash plus A$14m in bullion and a further A$17m in listed investments. As at 31 December, Alkane reported that it had A$218m in cash plus A$14m in bullion and a further A$14m in listed investments, after A$133m in positive mine operating cash flows and A$58m in underlying post-tax free cash flow.

Boda-Kaiser has a pre-production capex requirement of c US$1,188m, or A$1,686m at the prevailing fx rate (cf A$1,821m previously). At Edison’s relatively conservative long-term gold price of US$1,866/oz, we estimate that Alkane has the potential to accumulate A$976m in net cash by the end of FY31 to contribute to the funding of the Boda-Kaiser project. This amounts to 58% of the total capex requirement and, in our opinion, would obviate the need for the company to either raise additional equity or seek a strategic partner to develop the project. At the current (real) gold price of US$4,500/oz, however, we estimate that Alkane could accumulate A$3,465m in net cash to contribute towards Boda-Kaiser pre-production capex. In which case, it could also contemplate dividend distributions to shareholders in the intervening timespan.