Episode Details

Interview with Nic Earner, Managing Director of Alkane Resources Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/alkane-resources-asxalk-record-quarterly-cashflow-with-multiple-growth-pathways-9499

Recording date: 27th September 2026

Alkane Resources (ASX:ALK, TSX:ALK, OTCQX:ALKRY) is a mid-tier gold and antimony producer with three operating mines: Tomingley in New South Wales, Costerfield in Victoria and Björkdal in northern Sweden. It also owns the large Boda-Kaiser copper-gold project in New South Wales. The company produced about 169,000 AuEq ounces in FY2026 and guides to 163,000 to 177,000 ounces in FY2027.

The headline production figure understates the change in the business over the next two years. CEO Nic Earner described FY2027 as a year of peak investment. Growth capital is guided at A$160 million to A$190 million, covering the Newell Highway realignment that opens Tomingley's San Antonio open pits, a tailings storage expansion at Björkdal, development into Storheden, and new mining at Brunswick South at Costerfield. Much of this spending is one-off.

The second driver is the expiry of legacy hedges at Tomingley after June 2027. Earner put these at roughly A$3,000 an ounce out of the money on about 26,000 remaining ounces, and estimated an uplift of roughly A$90 million in FY2028 profit. Combined with lower capital spending, management expects cash generation to rise even if production is unchanged and prices hold steady.

Björkdal is the operational focus. It is the group's highest-cost mine, with FY2027 AISC guidance of A$3,300 to A$3,700 per ounce, against a consolidated A$2,900 to A$3,200. Storheden hosts Measured and Indicated Resources of 1.1 million tonnes at 2.51 g/T gold and is expected to be permitted within two years. Together with the Nylunds open cut, it supports a target of a 50,000-ounce annual run rate during calendar 2027, which Earner said would bring costs closer to A$3,000 an ounce.

Exploration continues across all three sites. Group Ore Reserves rose 6.2% net of depletion in the latest update. At Costerfield, Brunswick South already provides one to two years of production, and about A$5 million a year targets higher-risk structures that could deliver a transformational discovery.

The balance sheet is a clear strength. Alkane held about A$439 million in cash and bullion at June 2026, plus an undrawn A$110 million revolving facility. It has introduced a maiden dividend and an on-market buyback, and intends to continue and ideally increase shareholder returns.

On M&A, management is deliberately cautious. Larger balance sheets dominate competition for 150,000-ounce projects, and shareholders do not want a development project that overlaps with Boda-Kaiser. The preferred target is a producer of around 50,000 ounces with growth upside. Earner emphasised considered risk over betting on the gold price.

Key risks include gold price volatility, execution on Björkdal's cost reduction, Storheden permitting timelines, and the long-dated nature of Boda-Kaiser. Investors should monitor Björkdal's progress toward 50,000 ounces, FY2028 cash flow as hedges roll off, and any acquisition that meets management's stated criteria.

View Alkane Resources' company profile: https://www.cruxinvestor.com/companies/alkane-resources

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