Alkane Resources (ALK)

Business description

Alkane Resources is a multi-commodity explorer and developer, with projects in the central west region of New South Wales in Australia. Alkane owns the Tomingley Gold Operation and DZP rare metal and rare earths projects (both 100%).

Stock data

Market cap.A$151.8m
Last closeA$0.30
High / Low (52 weeks)A$0.4 / A$0.2
Stock market listingAU
Forecast net debt (A$m)316.7
Forecast gearing ratio (%)82
TeamResources - Mining

Price performance

Relative *(9.2)(26.8)(28.5)

* % Relative to local index

Other companies in sector Show

Afferro Mining Afri-Can Marine Minerals
African Barrick Gold African Eagle Resources
African Minerals Alabama Graphite
Alderon Iron Ore Aldridge Minerals
All Star Minerals Allied Gold Mining
Almonty Industries Altius Minerals
Altona Energy Amara Mining
Amerigo Resources Amur Minerals
Angel Mining Anglesey Mining
Anglo Pacific Group Antofagasta
Aquarius Platinum Arian Silver
Ariana Resources Asa Resource
Aspire Mining Atalaya Mining
Atlantic Gold NL Aurcana Corporation
Aureus Mining Aurizon Mines
Avalon Rare Metals Avnel Gold Mining
Baobab Resources Bear Creek Mining
Bellzone Mining Bezant Resources
Blackthorn Resources Bushveld Minerals
Cabral Resources Cadence Minerals
Caledon Resources Caledonia Mining
Cameco Canada Lithium Corporation
Carpathian Gold Celamin Holdings
Central Asia Metals Centrex Metals
Champion Iron Chatham Rock Phosphate
Chieftain Metals Coal of Africa
Condor Gold Continental Coal
Cradle Resources Dalradian Resources
Danakali Denison Mines
Discovery Metals Doray Minerals
DRDGOLD Duluth Metals
Eastern Platinum ECR Minerals
Edgewater Exploration Energy Fuels
Entrée Resources Equatorial Resources
Euromax Resources European Goldfields
Forsys Metals Corp Fronteer Gold
Frontier Mining Frontline Gold
Galaxy Resources Gascoyne Resources
Gemfields GMA Resources
Gold One Gold Road Resources
Gold Sector Report Goldcrest Resources
Golden Minerals Company Goldplat
Graphite Sector Report Gunson Resources
Hambledon Mining Hecla
Highland Gold Highlands Pacific
Hummingbird Resources Ichor Coal
International Mining & Infrastructure Corp Iron Road
Ironwood Gold Jameson Resources
KEFI Minerals Kenmare Resources
Kingsgate Kinross Gold Corporation
Kopy Goldfields Lemur Resources
Lepidico Lithium Americas Corp
Lithium X Energy London Mining
MacPhersons Resources Majestic Gold
Mandalay Resources Corp Mariana Resources
Matamec Explorations MDM Engineering Group
Medusa Mining Metallica Minerals
Metals Exploration Minera IRL
Mineral Commodities Minotaur Exploration
Mkango Resources MMG
Natural Resource Partners Ncondezi Energy
Nevsun Resources New Talisman Gold Mines
Nkwe Platinum Nordgold
Northern Dynasty Minerals Norton Gold Fields
NovaCopper OceanaGold
Oracle Coalfields Orbis Gold
Ormonde Mining Orosur Mining
Orpheus Energy Pan African Resources
Pan American Goldfields Papillon Resources
Petropavlovsk Pilot Gold
Platmin PolyMet Mining
Polymetals Mining Randgold Resources
Rare Element Resources Red Rock Resources
Regency Mines Richmont Mines
Rio Tinto Robust Resources
Rutila Resources Sable Mining
Seabridge Gold Shore Gold
Sirius Minerals South American Silver Corp
St George Mining Sumatra Copper & Gold
Syndicated Metals Teck Resources
Tiger Resources Titanium Resources Group
Torex Gold Triton Minerals
True North Gems U3O8 Holdings
Universal Coal Vatukoula Gold Mines
Veris Gold Corp Victoria Gold
Volt Resources W Resources
Western Areas Wheaton Precious Metals
Wits Gold Wolf Minerals
Woulfe Mining Zanaga Iron Ore Company
Zazu Metals Corporation

Company news

Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (c) P/E (x) P/CF (x)
2016A 109.6 40.9 11.0 2.2 13.6 3.4
2017A 117.8 61.3 18.0 4.5 6.7 2.9
2018E 108.5 31.8 (42.3) (3.8) N/A 13.6
2019E N/A N/A N/A N/A N/A N/A

Last updated on 08/12/2017

Investment summary

The fourth quarter of CY17 going into Q1 CY18 should prove pivotal to the development of the Dubbo Project (DP), aided in no small part by a strong broad rebound in DP-relevant metal prices that account for c 80% of future annual revenue generation. We see the DP taking centre stage for Alkane, as it looks to develop its flagship project and secure commercial binding agreements over projected Phase 1 annual revenues (of c A$407m). The TGO has maintained course on cost and production guidance for the financial year, and a revised underground mine plan is due by end CY17.

Last updated on 13/12/2017

Industry outlook

We adjust our forecasts to reflect FY17 results, reducing by 17% our forecast FY18 loss per share. With a solid first quarter of production at the TGO, costs and guidance in line with our forecasts, and a revision to our DP product price forecasts, we increase our A$0.71/share valuation by 11% to A$0.79. To fully realise this valuation, Alkane would need to secure commercial and binding offtake agreements across all its DP products (ferro-niobium is already subject to such an agreement with Austrian company Treibacher Industrie). Such agreements need to be secured over the next few months to allow financing of the DP during FY18 under our assumptions.

Last updated on 13/12/2017

Key management

Ian Gandel, Chairman
Nic Earner, MD
Ian Chalmers, Technical director

Company address

65 Burswood Road
WA 6100
View website