Alkane Resources (ASX:ALK) Q3 2026 Earnings Call

0:00 Good day and thank you for standing by. Welcome to the Alkane Resources Q3 Full Year twenty twenty six Operating and Financial Results Conference Call and Webcast. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you need to press 11 on your telephone. You will then hear an automated message advising your hand is raised.

0:38 Please note that today's conference is being recorded. I would now like to hand the conference over to Natalie Chapman, Corporate Communications Manager. Please go ahead. Hello, everyone. Thank you for joining our call today. Some housekeeping items to note. The accompanying presentation for today's call is available for download from the company's website at alkres.com. Today's press release, the financial statements and the MD and A are all posted on our website and CEDAR Plus. For those on the webcast, please move through the presentation slides yourself as directed by our presenters. Moving on to slide two.

1:25 I'll remind everyone that this conference call contains forward looking information that is based on the company's current expectations, estimates and beliefs, and may also use terms that are non IFRS performance measures. Please review Alkane's quarter three fiscal year twenty twenty six disclosure materials for the risks associated with this forward looking information and the use of non IFRS performance measures. Please note that all dollar amounts mentioned on today's call are in Australian dollars unless otherwise stated. Also, as management reviews the results, please remember that Alkane has a June 30 fiscal year end, so the quarter ending 03/31/2026 is the third quarter of our 2026 fiscal year.

2:23 And as we close the merger with Mandalay Resources on 08/05/2025, our group financial and operating results for quarter three twenty twenty six shown today

2:35 only include eight months from the Costerfield and Bjorkdale mines of former Mandalay operations and a complete nine months of results from Tommingley. Please move on to slide three. Today's speakers from Alkane Resources are Nick Erner, Managing Director and Chief Executive Officer and James Carter, Chief Financial Officer. I will now hand the call over to Nick Erner. Please go ahead, Nick. Thanks, everyone, for joining us today. Let's jump right into slide four, which tells a pretty clear story. We've just delivered another record breaking quarter across the board, and this is both operationally and financially.

3:20 All three of their mines are operating really well. On a consolidated basis, we produced a record 45,800 gold equivalent ounces in the quarter, is about 5% higher than in quarter two. For the first nine months of our fiscal year, we produced 120,000 gold equivalent ounces. This is well on our way to meeting our full year guidance 155,000 to 168,000 gold equivalent ounces, remembering, as Nat said, that this doesn't include July's production from Costerfield and Bjorkdale. Given the strong prices for gold and antimony in our robust production results, our mines generated AUD 189,000,000 in operating cash flow in the quarter. This is a bit over 40% higher than in quarter two.

4:06 At quarter end, we had AUD $374,000,000 in cash, bullion and liquid investments on hand. We continue to build our financial position clearly to aggressively grow the company through both exploration and capital at each of our mines and advance the Bodekaiser copper gold porphyry project. And as I've discussed previously, we're simultaneously seeking M and A to opportunistically grow the company. Another accomplishment I'd like to point out, which we're pretty proud of, which occurred subsequent to quarter end, Alkane was included in the S and P ASX 200 Index on April 22. We expect this to, in time, result in a further increase in stock liquidity and potentially reduce volatility as a greater number of investment funds can now own Alkane in their respective portfolios.

4:55 Now let me move on to Slide five. On a consolidated basis in Q3, Alkane mined more than 620,000 ounces of ore at an average gold grade of 2.33 grams per tonne and an average Antony grade of 1.12%. Recoveries of 91.4 gold and 85.9% Antony remained fairly consistent quarter over quarter. As a result, our mines produced nearly 46,000 gold equivalent ounces, consisting of nearly 45,000 ounces of gold and three seventy seven tonnes of antimony, which again is a record for the company. I'll get into specifics on each mine shortly. Needless to say, all of our mines are operating well, and we remain on track to meet fiscal twenty twenty six guidance. Moving on to Slide six at Thommingly.

5:44 In quarter three, we produced 315,000 tonnes of ore, which is just a touch less, 1% less than quarter two, at an average recovery rate of 90.1%, with an average grade of 2.4 grammes per tonne of gold. This results in production of 21,652 ounces of gold, which is a touch lower than in Q2. Processing continues to perform well and milling is exceeding plan, and this is primarily as a result of insertion of a mobile crusher to pre crush material prior to entering the processing circuit. This pre crushing material, which is we've tried different sizes prior to entering the circuit, continues. And it's seen an increase in milling rates to about 1,300,000 tonnes per annum. Further optimisation to balance our throughput and the cost that occurs in this mobile crusher continues.

6:39 The primary source of ore continues to be from the Roswell deposit. Underground ore was slightly below what it would have liked, primarily due to stope performance issues on several stopes that required rework. But this was offset slightly by higher development ore tonnages. Capital expenditure in the quarter was allocated primarily for our Newell Highway realignment project. Construction of this is expected to complete in Q2 fiscal twenty twenty seven, so the end of this calendar year 2026. By accessing the high grade San Antonio deposits by two new open cuts, this high return project will accelerate growth and further optimise our cost profile. All in sustaining costs at Tomingley in quarter three were AUD2444 per ounce, about 10% higher than we had in Q2.

7:33 The higher costs were a result of higher processing costs, which includes the cost of the rental crusher, which as I said before, this is a high return initiative that's continuing into Q4 and expected to continue going forward. Overall, Thommingly generated AUD 54,000,000 in the third quarter. Moving on to Slide seven. At Costerfield, our gold antimony mine, we processed 36,000 tonnes of ore. In Q3, gold grades were 10.2 grams per tonne, in line with Q2, and antimony grades 1.2%, which is about a third higher than in Q2. Gold and antimony recovery rates were 93.685.9% respectively, matching the previous quarter.

8:23 The mine produced 10,584 ounces of gold, which is similar to Q2, and three seventy seven tonnes of antimony, which is 41% more in Q2. Now, I want to stress that antimony grades can be variable throughout the mine and were higher than typically we're seeing in the ore body areas that we're in in Q3. Overall, we remain in our mining plan on our guidance for Costerfield. Costerfield delivered steady state operational performance during the quarter, but ore mining and milling rates exceeded our planned rates. We've had strong mining performance in terms of tonnes mined for the quarter, and our extraction from different areas can provide reasonably well forecast mining advance at each area per month. We do, of course, continue to work on our continuous improvement programmes. For us at Costville, this is a bit of drill and blast optimisation, capital development optimisation.

9:18 We continue to work on operator training And our transition to emulsion explosives to improve recovery and reduce dilution continues. Processing, we focus on blending control to maximise throughput, recoveries and reduced metal. We also here had successful trials during the quarter with respect to pre crushing ore feed as well, and screening lower grade ore stockpiles to further improve throughput, crusher downtime and blend control. Work continues here to prioritise that operational efficiency. All in sustaining costs at Costerfield in Q3 were AUD 2,521 per ounce. This is 17% higher than Q2. This is primarily a result of a one off AUD 4,000,000 adjustment of the run of mine stockpile following the introduction of a new inventory model to match that used at Thommingley.

10:15 As a result of all of this, Costerfield generated a record AUD 80,000,000 in cash flow. This is a significant increase compared to the AUD 30,000,000 we had in Q2. Moving on to Slide eight. In Q3 at Bjorkdal, we processed more than 320,000 tonnes of ore, an average grade of 1.5 grams per tonne, and an average recovery rate of 90.4%. Building on this consistent operation, Yorkdale produced 12,433 ounces of gold, which is up nearly 25% compared to the previous quarter. In general, we allocated resources to capital development activities in preference to operating development. Mine grade was in line with planned grades, and we had a slightly higher contribution from below the marble mining area, which traditionally has been a slightly higher grade area for us rather than above the Marlborough unit.

11:09 Mill throughput decreased slightly, while recoveries improved compared to the previous quarter, albeit not really much more than we would expect in line with increased head grade. Also during this quarter of interest, we did a trial of processing a parcel of off-site ore from a small mine to the west of Bjorkdal, and this was pretty successful. The goal with this programme is to evaluate the option and possibility of sourcing off-site ore to increase production and lower costs at Bjorkdal. Through this trial, we got an understanding, hey, this ore, it works, it's successfully into the plant, it's fed into the plant, it's got great recoveries. And so further studies of this, negotiations, what permitting things needed are underway to understand how we can continue this programme.

11:58 During the quarter, there was continued underground capital development success. We achieved more than 1,100 metres. This is in line with the previous quarter. We've got 1,200 metres, and we're above plans both for the quarter and year to date. Also, capital works on a series of lifts at the Tailings Dam facility have commenced. We started this once the area there thawed post winter. And additionally, the development of the Nirlands Open Pit, a small open pit right next to the long term Bjorkdal Pit that closed many years ago, and an upgrade of the equipment fleet is also continued in quarter three. So the higher production allowed all in sustaining costs in Q3 to be AUD 3,000 per ounce, about 10% lower than in Q2.

12:46 With this improved production, operating cash flow from Yorkdale was AUD55 million or over 50% more than the second quarter.

12:57 One of our key things is to drive organic growth by increased mineral resources, and I'm going to talk you through the exploration program across our portfolio. So let me start by moving on to Slide nine, At Thommingly, one of the interesting things that we did in the quarter was testing a seismic reflector feature quite deep beneath the Roswell deposit, which is bullet point number four on your map there. And near mine prospects such as El Paso, which is bullet point number five. Now at Roswell, this deep drilling intersected gold arsenic enriched hydrothermal breaches and veining right where we expected it in the seismic reflector. This is 400 metres below the current resources. So we've got a fair bit of further drilling plan to test where this structure intersects both the andesite and monso diorite units.

13:49 Both of these are favourable hosts at Roswell and both of them extend down at depth. So a pretty interesting area for us to see whether this is an area that has fluids that feeds gold up higher into Roswell. At Roswell I mean, sorry, at El Paso, we had eight drill holes completed, and this resulted in us reinterpreting the geological model, allowing us to better understand the geological structure of the El Paso, which we don't really fully understand. A drilling program to test the new model is planned. Meanwhile, underground drilling at Roswell itself in the quarter focused on improving confidence in the inferred resource. We got some great results like 5.9 metres at 31 grams per tonne of gold, which includes 2.1 metres at 78.4 grams per tonne of gold. Got a different one at 17.4 metres, growing 4.3 grams per tonne, which includes 2.5 to 21.1.

14:45 These are all very typical of what we see at Roswell. Additional underground drilling has commenced to keep and accelerate this infill drilling programme. So moving on to Slide 10 at Costerfield, we invested just under AUD 7,000,000, AUD 6,600,000 in Q3 to work to expand the resources. As you can see in points one and two on the map on the slide, True Blue drilling continued. We're well advanced in this in Q2, and we included step out testing of surface geochemical anomalies. Targets around the existing workings, which these targets will be incorporated, our results will be incorporated in the plan in the coming years into FY 'twenty seven, including Kendall, Bullet 0.3, Brunswick South, Bullet 0.4 on the slide.

15:37 At Kendall, 25 individual veins have now been identified and modelled. These are immediately above the currently mined Ewell and Sheppard ore bodies, and they surround the historically mined from many decades ago Costerfield deposit. So we looked at extension drilling in that area, and this gave us pretty strong results, including amazing results like 1.94 meters grading 132 grams per tonne of gold, so over four ounces of gold per tonne, and 19.8% antimony, very high grade antimony, and 2.3 meters grading 267.5 grams per tonne, so over eight ounces per tonne of gold and 5.6% antimony. These are clearly ultra high grade, and they're

16:21 similar to mineralization at the nearby Fosterville mine. And these present one of our most exciting prospects. I would not want you to think that I'm saying that we have a massive tonnage here, but they're certainly very, very high grade. At Brunswick, we conducted infill and extension drilling programs with additional drill rigs mobilised at that program. And up at bullet point six you can see on the screen, we're also testing for potential of Sunday Creek, the Southern Cross style mineralization just below Costerfield's historic mines. So let's move on to Slide seven. At Bjorkdale, drilling expenditures were just under AUD 3,000,000 during the quarter as three exploration targets were progressed. Drilling at north zone, that's 4.1. This moved from growing to infill, while the eastern extension program targeted the continued depth and the eastward extension of the main and central zones, this is 4.2.

17:17 And further to the Northeast, most interestingly at Stall Hidden, this growth drilling also continued as did to the East at Norbury it during the quarter. At Bjorkdal, we continue to explore for narrow high grade veins, which we've shown that we can mine these efficiently. Let's move to Slide 12. The Northern Malon Porphyry project, the entirety of which is shown on the map on this slide, is a highly prospective gold corridor. This project also encompasses our Bota Kaisa copper gold project, which is in the bottom right of the picture that you're looking at. Exploration on this project for the quarter included our continued inversion and interpretation of the mobile magnon Tularegs, or MMT, survey data that was found in November.

18:04 Reconnaissance drilling for a total of 4,000 meters that commenced through December was completed. And we're interpreting this, and we expect to report them in the coming months. Now other low cost activities to advance development of Boto Kaisa gold copper project in the quarter included the continuation of our environmental baseline studies. We did stakeholder consultations, property negotiations, site selection, infrastructure. These are low cost but high impact activities. So we think that this keeps us well on the path towards a project approval application in late twenty twenty seven, calendar 'twenty seven or early twenty twenty eight. We have here the goal of receiving approval to then go on and make an investment decision in late twenty twenty nine. So as you can see, there's a tremendous amount of exploration work going on at each of our projects, all with the goal of expanding resources and driving for new recoveries to increase the mine life, therefore increase production levels and contain potentially lower the costs. And with that, I'll now hand the call over to you, Jim, to provide a review of our financial performance.

19:15 Thanks Nick. And hello everyone who's joined us on the call, wherever you are today. So on slide 13, so I'm going to start with an overview of the key financial highlights for our third quarter of our financial year 2026. And so I'll be focusing on really just this financial year as the results of the previous year don't include the former Mandalay operations. So group revenue for the quarter, that was a record just over $274,000,000 on sales of about 42,500 ounces of gold and two eighty tonnes of antimony at average realised gold price of just over AUD 6,300 per ounce and an average antimony price of about AUD 34,400 per tonne.

20:08 During the quarter we also delivered about 8,700 ounces into our gold hedge book. That's at an average price of just around 2,855 Australian dollars per ounce. And we've got about five quarters remaining of hedge deliveries through to June 2027 which is just a very small percentage of our overall forecast production and revenue. All in sustaining costs on the consolidated basis were just over AUD 2,900 per ounce on the gold equivalent produced basis. A little bit higher than Q2. A little bit of impact there from the impact that we're seeing across the industry with diesel fuel.

20:57 Not so much of an issue for us as Alkane. Plus just a little bit of more planned sustaining capital around underground capital development and some equipment purchases which is sort of what we are forecasting to do. EBITDA in the March quarter, that was a record AUD161 million higher than the quarter previously. And for the nine months so far this year we've generated AUD334 of EBITDA and that's an EBITDA margin of just under 50%. Net profit after tax for the March quarter. Another record $93,000,000 after tax, 6.81¢ per share. And on a year to date basis our net profit after tax is just under AUD158 million

21:48 or 12.44¢ per share. Sustaining capital during the quarter, 24,000,000. Largest programs around $7,000,000 for underground capital development at Yorkdale. 9,000,000 for ongoing equipment replacements at Thomminglian and Yorkdale as well. Just reminding everyone that across our three operations we do own and operate all our own equipment because that works for us best efficiently and economically. Growth capital was $10,000,000 per quarter and most of that's invested at our Thommingley operation in our Newell Highway realignment which is for the eventual mining of the San Antonio Open Pit in 2027.

22:36 And exploration across the group in the quarter was $13,000,000 and Nick sort of spoke about that across our operations and our Bodekaiser project. So turn to slide 14 now and we've got the cash waterfall here. So in the third quarter cash flow from our three operations was a record $189,000,000 42% higher than the second quarter. Corporate and other expenses sort of in that bucket of $20,000,000 of cash outflows. We've got corporate and technical support costs. That includes about $3,000,000 on our BODA project and some other regional exploration. Dollars 6,000,000 for the Lupin project in Canada that we're rehabilitating and closing down.

23:26 Dollars 5,000,000 for a net repayment of equipment lease finance. And we also received 4,000,000 during the quarter from a non core divestment of the La Cabrada project in Chile. So after sustaining capital expenditures, growth, exploration taxes, corporate, we ended the quarter with $328,000,000 of cash. So net about $110,000,000 cash growth over that quarter. So at the end of the quarter we've got a really strong robust financial position. We have access to up to $520,000,000 of liquidity through the cash bull in listed investments.

24:15 And we also finalised a new $110,000,000 revolving credit facility and $40,000,000 contingent instrument facility during the quarter. So yes, records all around. Very strong quarter financially and on the back across the industry having a very good strong gold price environment. But I think it's important for us to highlight that yes, we all have that benefit and those tailwinds. But on the ASX when we compare, we have industry leading margins during the March quarter as well. I think maybe on a clear cash generation per ounce sold during the quarter, I think maybe second place out of all the industry producers. So more than just a strong gold price, we're priding ourselves on taking advantage of that through strong efficient operations trying to keep an eye on costs as well.

25:14 So that gives us in a great position to help internally fund our own

25:21 organic growth projects and really position ourselves for anything that might happen opportunistically as well. And I think at that stage I'll turn the call back to you Nick. Great. Thanks, Jim. Let's move on to slide 15. Let me focus on our outlook. We want to build on this momentum that we've achieved today throughout fiscal 'twenty six. Leveraging the financial strength that Jim just outlined, we're well positioned to deliver on our dual track strategy, growing production whilst containing costs to maintain overall margins and to increase our cash generating capabilities.

26:03 We're pretty firmly on track to achieve the top end of our annual production guidance of 155,000 to $168,000 equivalent ounces. Now it's worth noting again sorry, this will end next financial year but the true scale of our operational footprint had we included all of the Orkdalen cost of fill production for July 25, and the full year guidance would climb to the 160,000 to 175,000 gold equivalent ounces, which firmly establishes Alkane as a mid tier gold producer.

26:35 On the cost front, we retain discipline. Our consolidated all in sustaining cost is on track to hit guidance at AUD 2,600 to AUD 2,900 per ounce, or between, if you're talking US dollars, AUD 16.90 to 18.95 per ounce. Albeit, we do expect to be at the top end of that guidance.

26:57 But we do have a pretty aggressive commitment to organic growth. We're deploying in the vicinity of $80,000,000 in growth capital and exploration to keep unlocking value at our sites. Our primary goal for FY 'twenty six was to establish Alkane Resources as a reliable, consistent producer. And I think our performance to date shows that we've done exactly that.

27:22 Moving on to slide 16, we remain focused on execution. And as the numbers show, I hope you all think that we're delivering on that promise. We're positioned to meet our targets, in production and cost. We're deploying the drill bit across our entire portfolio to expand our resource base.

27:40 This is what we want to do, the bedrock of our strategy. We want to extend our mine life, we want to accelerate production growth at all three mines. And of course, we have Bodhakainta. This is a very serious copper gold porphyry project, remains an important part of our portfolio, and we think it's a key to long term value creation for all of our shareholders. We're moving purposefully on the environmental studies and permitting to advance the project. And in doing so, we give ourselves maximum flexibility to unlock value. Corporately, I think at this time now of the market, our balance sheet is a clear strategic advantage. Given our steady state operation in this pretty robust steel gold and anthony price environment, we expect to continue to build our cash position.

28:26 This allows us to grow from within as well as inorganic growth opportunities. While we're pretty well positioned to move quickly, of course, we will maintain discipline.

28:35 In closing, we think we're well positioned to drive long term value for our shareholders and our stakeholders. And thanks, everyone. With that, I'll hand back to the operator to start the Q and A session. Thank you, operator. Thank you.

29:29 We are now going to proceed with our first question. And the questions come from the line of Laurence Retail from Retail Investor. Please ask your question.

29:50 Good morning good evening in Australia. I'd like to thank the Alkane team for staying up late on a Friday evening. I have several questions, Nick, and I'll start with the first one. When will Alkane disclose the exploration and mining plan for the Nagambi earn in?

30:17 Yep, Lawrence, thank you very much, mate. No problem staying up, thank you for acknowledging. So Nagambi, at the moment we're compiling exactly what we're looking to do. However, we've already obtained a drill rig, we're mobilising that to site.

30:37 We expect to start drilling in the next couple of weeks. But the first drilling we're looking to do is simply to put sort of three, four holes into the existing inferred resource that Nagambi has in order just to firm it up, redo the model and then start to do targeting. So once we've done that, then we can detail a more detailed programme. But I would say, mate, probably in reality about two, three months. Okay, that's great.

31:11 On the Nagambi presentation, I think it's dated 2023, they mentioned Wooroo and Red Castle JVs with some of the Nagami permits that are off, I think, kind of Northwest and North of the mine. Are those JVs still in progress?

31:36 So as far as I'm aware and forgive me, I may be a tiny bit inaccurate. But as far as I'm aware, no. The only remaining agreement is with a company called Golden Camel who has the right to process material. I'm going to call it the Northeast Corner of the mine, a very long standing relationship there. They of course need to attract funding and all the other stuff to do that.

32:03 So at this stage though, most of the work that we're doing will be on that primary tenement package in and around the old mines under the old open cut. So if I've stuffed that up, I apologise mate, but our primary target is in and around that existing mining area. Okay. I'm still trying to figure out

32:33 the Boder CASA project. I'm trying to understand what the profitability is, because it seems to look like a Kinross project, where you have high tonnage, low grade.

32:49 Mate, you're absolutely spot on about that. So if rewind a fair bit to the scoping study that we put out in July 2024, so we looked at a 5,000,000 tonne, a 10,000,000 tonne and a 20,000,000 tonne per annum scenario, way back when gold price was Australian dollar $3,500 per ounce, right? And copper was under what it is in today. So gold price now is in Aussie dollars,

33:21 I'm gonna say $6,400 so another $3,000 Australian per ounce. And copper has gone from being around this $15,000 per tonne Australian to nearly $20,000 per tonne Australian. But you are correct. It is a large, very large lower grade deposit, contains

33:43 gold and copper in nearly fiftyfifty value. The overall grade is 0.58 grams per tonne equivalent. That changes of course on gold price, but it's comprised of 0.3 grams per tonne of gold, 0.18% copper. So a couple of key things around value.

34:03 Back then, the IRR was solid, but not amazing. At current prices, if we did 20,000,000 per annum, the IRR on a pre tax basis is up over 50%. So a couple of things that will have changed of course since that study.

34:21 Capital costs will have risen slightly. So we'll redo that as we work through this next year or two. OpEx will no doubt have been influenced. We're all waiting to see where everything ends up over the next year or two. But it's fair to say that prices have moved way more as a percentage gold and copper prices in those terms. If you look at the 20,000,000 tonne per annum scenario, it averaged over a seventeen year life of mine. It would average the equivalent of being a bit over 200,000 to 220,000 ounce equivalent operation. If you did a 10,000,000 tonne per annum, it was a tiny bit higher or sort of in the 110 to 125. So anyway, what you're seeing is in this price environment, it's a very profitable operation, but you're exactly correct. It needs big tonnes, the bigger the tonnes, the better it is.

35:12 It will start open cut, it will transition to underground in ten to thirty years depending what size processing plant is.

35:21 Look mate, I'll certainly encourage you to, you know, check out that scoping study. Do you think ore sorting could be used at the Bota No, sorry mate, it's not I mean ore sorting at some of the other prospects, yes, but not this one. It's a really large calcarec calic porphyry. So, no, I don't see where we're getting uplift for more sorting.

35:43 Yeah. Okay. I think my next question is, I I assume that you've heard about the Trump administration's project vault. Yes, but the full month of an expert will be incorrect. Yeah, so I was wondering if Alkane has had any discussions with the Trump administration with regards to selling antimony into Project Vault. We've had as many people have because they've been very thorough around the world. We've had some communication around the selling of concentrate

36:28 once they establish that downstream smelting? Yes, but there's nothing committed at all. Okay, well, at least you're having discussions. That's a good news from my point of view. I'm not sure where they are in developing Project Vault. Obviously, they're going to have to have some strategic warehousing set up across their country, and I don't know if they're at that stage yet. No worries. Great, thanks for your questions, Lawrence. Actually, one other question. Does the communication officer or investor relations officer have a phone number? Yes. So if you look on the bottom of any of our announcements on our website, you will see Natalie's contact details there.

37:21 Yeah, and I guess the only other piece of feedback I have, and this has to do with

37:32 my neurological PTSD situation, that today's could today's presentation be put in the investor presentations web page just to make it easier to find because I couldn't find the presentation that you were using on the call today. So I'm wondering if it could be put into the presentation section prior to having the investor call. Understood. Thanks for the feedback. Certainly we'll check out. Okay. Again, thank you for hosting this call late in the evening. I wish you all a wonderful weekend. Thanks, Laurence. We are now going to proceed with our next question.

38:19 And the questions come from the line of Kevin Tracy from Oberon Asset Management. Please ask your question. Thanks for taking my questions. The first one is on Kendall. Pretty exciting exploration results there you announced in February. Can you and you mentioned that Tendall is quite close to your existing infrastructure. Can you talk about the timing of when you could mine material volumes from Tendall? And how the results, impact or change your outlook for the mining plan? Yeah, certainly, Kevin. We expect that we'll be mining Kendal over the next twelve months, later in the next twelve months. So the nature of Costerfield as a mine is that we seek to at least replenish the reserves each year.

39:16 And also if possible, obviously we want to expand the reserve further. The high grade areas of Kendal will be developing up towards and also Brunswick South is a new mining area that we'll be developing towards. So I don't see that significantly changing the outlook from sort of this year's production, But certainly it'll be good to get up there and then start to check it out with some development drives. Okay. And then at Dorthal, the production number was the best we've seen in a long time. And my question really is about the gap between the process grade and the mined grade, or historically, we've seen the process grade be lower than the mined grade as you've supplemented underground ore with stockpile.

40:14 And in the most recent quarter, the process grade was a good deal higher. Is this totally explained by the kind of off-site trial of processing of third party ore that you talked about? Or is it a plane something else? Pretty much, pretty much mate. Yeah, so the mine that we look at obviously because we're tracking it had a head grade of I'll just say six grams per tonne. Know, you can understand why we're looking to see if that works for us. And there's a whole host of different aspects there. See, that is the main explanation of what to do. We are looking at ore sorting, but no, it's not that. It is all the off-site production. Okay, and are you hopeful that you'll be able to sustain the processing of that ore? Or yeah, do you see it sustainable in the quarters ahead? Yeah, totally. So no, do not put it into any model that you might have yet. We are hopeful that we can secure some sort of arrangement from that mine or others, but there's a couple of hurdles to overcome.

41:22 One, negotiating with those parties, but two, also the permitting part of the trial was to get tailing samples and other things to make sure that we would be compliant with any of the environmental conditions we have on-site. And then we have to test that with the regulator over the coming months to get permission to bring in ore such as these from off-site. So yes, we very much want to pursue it. Yes, we very much want to do deals. And yes, we'll be assuring at the regulator, it's more months than years, it is still something we need to land, mate. Okay, great. And then bigger picture at Barkdal, you have a broader strategy of opening more mining fronts and filling the mill with more of your underground ore. Can you just update us on the status of those efforts and kind of give us a preview of what we should expect in fiscal 'twenty seven in terms of volumes at Markdahl underground?

42:22 Yeah, so we absolutely do have a strategy. So there's two part strategy. So number one is the pit at Nerlands, which is just a tiny bit to the east of where the Bjorkdale Open Cut was. That's a mine open cut that we've been doing pre stripping off at present. It's got a stripping ratio sort of of the order of six or seven to one. And we expect to be delivering ore from that at around sort of this 0.8, 0.9 grams per tonne, which is higher than the low grade stockpiles later this calendar year. So during the next financial year, so that's sort of part one. Part two is the store head and deposit to the north of the existing mine. We have a mining lease there, but we need to get the environmental permit to mine that.

43:14 We have greenlit already the development towards that. So that needs a new crosscut going across from underground and then a decline. That's probably the better part of three years activity and an update of the environmental permit. So these are the two things we're doing. So next year, I expect our production will be similar ish to this year. I expect our capital costs will rise because we're looking to invest in those two things that I described, but they'll all be setting us up for increasing production going forward, you know, ideally the year after and year after that. Okay, thank you very much. Thanks, Kevin. There are no further questions on the phone lines.

43:59 So I'll now hand over to Natalie Chapman for the written questions. Thanks very much. So we'll start off with what opportunities does ALKANE see in gold and antimony beyond cost of field? Okay, so outside of our own exploration things that I just described, clearly for us, there's the joint venture with Nagambi in our immediate vicinity. There are some other companies that have gold and antimony deposits more regionally, so we'll call it within 150 kilometer radius. But we're only in the very early, let's just have a look at these and consider it top station. Please don't read too much into that.

44:49 Looking more broadly internationally, I'm sure many of you that know the answering market will be aware of other projects. At the moment, at the very most, we a desktop review of some of those. So we're not actively pursuing in our M and A and Anthony lead on anything. We are looking at gold projects, and some of them do include Anthony, but not really. I hope that answers your question. If it doesn't, please type in another one. Thanks. Are you still conducting a geophysical exploration? Absolutely. So we've broadly finished our geophysics at Bodekaiser because we've updated those with updated gravity magnets and other things for targeting.

45:42 Down at Costerfield, we are almost finished updating our information density there. And we have a structural expert looking at that to assist with our targeting to extend the mine life. At Tomingley, it's similar. We've done further survey work there, geophysics. Most of that's finished. We're now engaging structurally. And we're looking at that deep drilling, said, to test some of the seismic work that we've done there. So I hope I've answered your question. Thanks. When will Alkane pay its first dividend? Oh, it's something we talk about in the board all the time, particularly as we have such strong cash flow generation. We're looking to put together a capital management strategy, buybacks, dividends, etcetera.

46:36 And we expect to announce that in the second half of this calendar year and the first half of next financial year. So people have a pretty clear idea of sort of ratio of liquidities and what we intend to do with cash. At the moment, our key thing is to really look at our M and A opportunities and run those to grounds. But we're putting out a capital management policy for the end of this year. But we do not expect at this stage, even though we talk about it each month when we meet as a board, we're not anticipating paying a dividend at the end of this financial year. So that may occur, but people should not count on that. How much, if any, of the drop in the all in sustaining costs at Bjorkdale this quarter was down to the trial sample?

47:24 And would you expect further cost declines there if the outside ore is brought in on a continual basis? Yeah, absolutely. So the costs at Bjorkdale are pretty much fixed, know, they're close to 65, 70% fixed. So it was definitely the per ounce cost base was absolutely influenced by that offside oil, which is of course why we're looking at that and other sources for it. In the event that we do find and you know, follow-up the questions that I gave Kevin around that offside ore, then yes, I would expect the all in sustaining costs to come down. That's the whole premise of all the different activities we're trying to do at Bjorkdale.

48:15 Thanks. Congratulations on a strong quarter and the smooth integration. I appreciate you maintaining a strong balance sheet and the investments in exploration and optimization. With 20% of market cap in net cash June year end, it's building quicker than can be spent. Any thought on maintaining 20 of net cash bullion if you're successful finding an external opportunity, but allocating a portion of incremental free cash flow to opportunistic buybacks at this level of undervaluation? Yes, so the capital management strategy will no doubt incorporate something such as the questionnaire is envisaging.

49:05 However, we're also very much looking at dividends given we have Australian franking credits as well. Right. What impact does the rising cost of oil have on your operations, particularly those in Australia? Oh man, yeah, obviously topical for all this. So to date, given that we are grid powered at all three mine sites and we're underground not operation, so lower tonnage movements. The oil price itself for diesel fuel has not had that much of an impact. It's fair to say I'm pretty concerned about all the flow on things. So things like drill bits with the tungsten as a portion is the cost of those arising, the cost of polypipe is rising, the cost of some reagents is rising.

50:07 And I do have some sympathy for our suppliers, there's a rises and falls and when we ask them, okay, we're preparing our budgets for next year, what's this going to be and stuff. But to be honest, people can't really tell us that much, right? So directly related to oil, not much as to where it all settles on the broader, I don't know, I'll just call it supply base of reagents, explosives, drill steels and other things that transport is affected. Really can't say. Today we haven't seen that flow through, you know, to be honest, it does feel like it's going to be inevitable and certainly all the external, commentary I read makes me think that as well. Thanks, Nick. We have no further questions, so I'll hand back to you for closing comments.

51:01 Okay, great. Great. Thanks, Nat. Hey, look, thanks, everyone, for taking the time to join us today. And look, while we've had a successful financial year so far, we, of course, look forward to showing more of our progress in the next call in a few months. As always, please reach out if you have any questions. As I said to Lawrence, our first questioner, Natalie's details are on the bottom of all of our announcements. So thank you and good evening to everyone here in Australia and have a good day everyone in Canada. Thank you. This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.