Alkane Resources (ASX:ALK) Hits 5-Year High After 188% Rally: Time to Buy or Take Profits?

Alkane Resources: A Strong Buy After 188% Rally?

Alkane Resources (ASX: ALK) jumped 11 per cent last week to reach its highest price in five years. The rally came after the company reported strong production numbers for the December quarter. Over the past 12 months, the stock has soared 188 per cent, making it one of the top performers among ASX gold stocks.

The big news? Alkane produced 43,663 gold equivalent ounces across three mines, up from 36,407 ounces in September. This was the first full three-month period under Alkane’s ownership of the Swedish asset, following the merger in August 2025, during which output returned to normal levels after the typical European summer vacation period. The balance sheet looks solid too, with A$246 million in cash and investments and almost no debt. 

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Alkane Resources Now Runs Three Mines Across Two Continent

Alkane has a longer history than many other ASX resources companies. It was first incorporated in 1969 and actually focused on hydrocarbons before pivoting to gold amidst the late 1970s boom. It has had various operations over the years including the Peak Hill Gold mine which made 153,000/oz between 1996 and 2005 and the Tomingley project in NSW that entered production in 2014. In 2019, the company went on a run after discovering the Boda-Kaiser project which has potential, but even in early 2026 remains at the exploration and study phase. 

2025 was a pivotal year when it merged with TSX-listed Mandalay Resources which bought 2 further projects into the fold: Costerfield in Victoria, and Björkdal in Sweden. 

Why does this matter? Having three mines means less risk. If one mine has problems, the others keep producing. Tomingley is about to hit a big milestone too. The mine will pour its 750,000th ounce of gold in January 2026.

There’s also an interesting side story with Mandalay’s projects, especially Costerfield. You see, this project produces antimony, a metal used in defence and electronics. The Costerfield mine produced 267 tonnes of antimony during the quarter, bringing the Year-to-Date (YTD) total to 465 tonnes, tracking well against the full-year target of 800–900 tonnes. China controls most of the world’s antimony supply, so Western sources like Costerfield are becoming more valuable. This gives Alkane Resources exposure to a market where supply is tight and demand is growing.

Management says FY26 guidance stays the same at 160,000 to 175,000 gold equivalent ounces. The December quarter shows good progress towards that target.

Strong Balance Sheet Gives Alkane Options

Alkane’s financial position is one of the best parts of this story. Alkane resources closed the quarter with A$246 million in cash, bullion, and investments, a net increase of A$55 million from September. Notably, this doesn’t include a further A$18 million provisional payment received in early January 2026 for a Costerfield shipment delayed by the Christmas holidays. There’s basically no debt on the books except for A$22 million in equipment leases.

This cash pile gives management flexibility. They can fund growth projects, look at acquisitions, or return money to shareholders without needing to raise capital. The Boda-Kaiser gold-copper project in New South Wales offers future upside for longer-term investors.

Costs look reasonable too. The company guides to all-in sustaining costs of A$2,600 to A$2,900 per ounce. With gold prices averaging A$6,299 per ounce in the December quarter, profit margins remain healthy.

The Investor’s Takeaway

The bull case for Alkane Resources is clear. Strong production, a rock-solid balance sheet, and analyst support all point to a quality gold stock. The shift to a three-mine producer has clearly worked. Consensus analyst sentiment remains a ‘Strong Buy’ with an average 12-month price target of A$1.57 and a high estimate of A$2.05.

But here’s the thing. After rising 188 per cent in a year, a lot of good news is already baked into the share price. The stock trades at around 25 to 28 times earnings, which isn’t cheap for a gold producer.

We think Alkane Resources is a quality way to get gold exposure. If you already own it, the operational story supports holding on. But if you’re looking to buy now, waiting for a pullback might give you a better entry point. The full quarterly report coming later this month will tell us more about costs and cash flow. That should help confirm whether the strong share price performance is justified.