Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) continued to achieve forecasted gold production and generate cash flows in the September quarter at its flagship Tomingley Gold Operations in Central West New South Wales.
Strong gold production
Gold production reached 18,418 ounces, while gold sales totalled 18,208 ounces, generating A$62.3 million in revenue at an average price of A$3,422 per ounce.
The site’s operating cash costs were reported at A$1,840 per ounce, with an all-in sustaining cost (AISC) of A$2,182 per ounce.
The company maintained its FY2025 guidance of 70,000 to 80,000 ounces of production, with AISC expected between A$2,400 and A$2,600 per ounce, factoring in one-off capital costs for decline development.
The quarter saw A$19.2 million in operating cash flow, bolstered by a favourable gold price environment.
Alkane managing director Nic Earner said: “This has been another quarter of solid production performance that has been leveraged by the strong gold price.
“We remain on track with our capital expansion work, with both the paste plant and processing upgrades scheduled for commissioning in the December quarter of this year.
“We’ve passed the point of peak expenditure in the current phase of the Tomingley expansion as we look to continue to grow production through commissioning of the new plants.
“We will then be focusing on the Newell Highway diversion and maintaining a high level of operational excellence to maximise the value of our increased production capacity.”
Alkane’s liquidity position remains strong, with cash, bullion and investments totalling A$52 million at quarter-end and a total liquidity of A$67 million, including A$15 million in undrawn finance facilities.
Expansion projects and exploration
The Tomingley Gold Extension Project (TGEP) continues to progress, with the paste plant and the upgraded process plant flotation and fine grinding circuit expected to be commissioned in the last quarter of this year.
The expansion is nearing completion, with gold processing recoveries expected to improve by around 7% post-commissioning.
Alkane’s exploration initiatives also delivered results, with the company reporting a net increase of 11% in reserves, bringing the total to 705,000 ounces at 1.9 grams per tonne gold following re-estimations of resources.
The Northern Molong Porphyry Project also saw further exploration activity, including passive seismic surveys and geochemical studies.
Banking and finance
Alkane reported an increase in mobile equipment financing to A$19.5 million, driven by the acquisition of CAT 2900XE underground loaders and a new production drill rig.
The company also has a A$60 million Project Loan Facility with Macquarie Bank Limited, of which A$45 million has been drawn, an increase of A$2.2 million compared to the June quarter.
Forward sales and put options
Alkane also holds gold forward sale contracts extending through to 2027, with some 81,700 ounces hedged at an average price of A$2,842 per ounce.
In addition, put options have been secured, ensuring that nearly all non-hedged ounces produced from the 2025 to 2027 financial years will yield a minimum price of A$3,000 per ounce.
Alkane's investments in exploration and capital projects are setting the stage for continued growth, while operational excellence remains central to the company’s strategic objectives.