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Highlights
- Solid gold production boosts Alkane’s cash position
- Flotation and fine-grinding circuits now fully operational
- Strategic merger to create a diversified gold and antimony producer
Alkane Resources Ltd (ASX:ALK) has posted robust results for the March 2025 quarter, strengthening its financial position while progressing with a transformational merger with Mandalay Resources Corporation (TSX:MND).
The Tomingley Gold Operations continued to deliver consistent results, producing 17,657 ounces of gold during the quarter and generating revenue of A$63.4 million from the sale of 16,513 ounces at an average price of A$3,839 per ounce. Operating site cash costs stood at A$2,178 per ounce, while the all-in-sustaining cost (AISC) reached A$2,770 per ounce. Alkane also reported a solid operating cash flow of A$29 million, reflecting the impact of high gold prices and operational efficiencies.
Key infrastructure upgrades at Tomingley, including the newly commissioned flotation and fine-grinding circuits, are now fully operational. Although performance was briefly impacted in January and February, improvements to kiln burners have since optimised throughput. The paste plant exceeded expectations, further supporting cost and production targets. Site preparations for the Newell Highway diversion are scheduled to begin in the current quarter, reflecting Alkane’s continued commitment to future development.
Exploration activities remained a priority, with strong results from resource expansion drilling at Tomingley. Several ore-grade intercepts were identified beyond existing models, increasing the project's long-term potential. Drilling also progressed across the Northern Molong Porphyry Project, with assays pending from Boda, South Boda, and Driell Creek prospects.
Alkane’s financial position strengthened, closing the quarter with A$50.5 million in cash and bullion, up from A$39.5 million previously. Including listed investments, total liquid assets rose to A$58.6 million. The quarter also featured underlying free cash flow of A$8.4 million before tax, alongside continued debt reduction and forward sales delivery at favourable prices.
In a major corporate development, Alkane and Mandalay Resources (TSX:MND) announced a proposed merger that will form a diversified, Australian-centric gold and antimony producer. The merged entity, operating under the Alkane Resources name, will manage three producing mines with a strengthened balance sheet. This move is expected to enhance cash generation, offer operational flexibility, and broaden growth opportunities across the portfolio.
Forward sales and hedging strategies remain firmly in place, with 68,800 ounces of gold secured at an average price of A$2,852 per ounce through to mid-2027, alongside 111,000 ounces protected with put options at A$3,000 per ounce.
This merger and strong quarterly performance underline Alkane’s strategy of building a scalable and resilient gold business poised for future expansion.
