Alkane Resources Shares Slide Nearly 10% Despite Steady Gold Output as Bullion Slump Hits ASX Gold Miners

Shares of Alkane Resources fell nearly 10% on Friday, as a slump in gold prices overshadowed a steady quarterly production report from the gold and antimony miner.

Alkane shares fell 16.25 Australian cents, or 9.82%, to A$1.4925, after trading between A$1.47 and A$1.62. About 3 million shares changed hands, and the decline cut the company's market value to about A$2 billion.

The drop came as gold prices fell to a two-month low, dragging down Australian gold mining stocks.

Steady quarter

Alkane reported production of nearly 41,000 gold equivalent ounces for the September quarter, the first quarter of its 2027 fiscal year. That included about 40,000 ounces of gold and just under 400 tonnes of antimony.

The company's Tomingley mine in New South Wales produced about 21,500 ounces of gold, while the Björkdal mine in Sweden produced about 10,500 ounces. Its Costerfield mine in Victoria produced nearly 8,000 ounces of gold, along with antimony.

"We have delivered a strong, steady state first quarter," Chief Executive Nic Earner said on a call with analysts.

All-in sustaining costs, a key measure of production expenses, fell 7% from the previous quarter to A$2,805 per ounce.

Despite the improvement, the company kept its full-year cost guidance unchanged.

"That is why we have not changed our full-year cost guidance despite a really good quarter in September," Chief Financial Officer James Carter said.

Strong financial position

Alkane generated operating cash flow of A$102 million during the quarter. It ended the period with about A$459 million in cash, bullion and investments, and total liquidity of just under A$570 million, including an undrawn credit facility.

The company reaffirmed its fiscal 2027 production guidance of 163,000 to 177,000 gold equivalent ounces. It also paid its first dividend and launched a share buyback of up to A$50 million.

Alkane plans to spend A$160 million to A$190 million on growth projects this fiscal year, with A$37 million spent in the first quarter.

"2027 is a year of positioning Alkane for fiscal growth, for future growth," Earner said.

Antimony outlook

Earner offered a cautious view on antimony, a metal used in batteries, flame retardants and military applications whose price soared in recent years after China restricted exports.

"I don't see reasons for that market to rebound strongly in the short to medium term," he said.

Antimony from Costerfield has been an important source of revenue for Alkane, and weaker prices could weigh on the contribution from that mine.

Gold slump weighs

Friday's sell-off was driven largely by the fall in gold prices. Spot gold fell to around $4,025 an ounce, its lowest level in more than two months, as higher oil prices fueled concerns about inflation and further interest rate increases by the U.S. Federal Reserve.

Other gold miners also fell sharply. Ora Banda Mining dropped nearly 15%, and Southern Cross Gold Consolidated fell about 9%.

The S&P/ASX 200 index fell 0.15% to 8,780.1, with materials stocks the biggest drag.

A year of growth

Despite Friday's decline, Alkane shares are up about 39% over the past year, helped by higher gold prices and the company's expansion. Alkane combined with Mandalay Resources last year, adding the Björkdal and Costerfield mines to its portfolio and creating a multi-mine producer.

What's next

Investors will watch whether Alkane can maintain its production and cost performance through the rest of the fiscal year, and how its growth projects progress.

The gold price will remain a key factor, with the Federal Reserve's meeting next week likely to influence the direction of the metal and gold mining stocks.