Alkane Drilling Confirms and Extends Gold-Antimony Mineral System at Nagambie, Victoria
Alkane confirms and extends the Nagambie Au-Sb system, though grades remain significantly lower than those at the nearby Costerfield deposit.
Alkane Resources Limited (ALK) has released its first assay results from the Nagambie gold-antimony property, located approximately 40km from Costerfield in Victoria. Under the current earn-in agreement, Alkane can acquire a 60% interest by spending $12.5 million over three years, with the option to increase its stake to 80% through a further $15 million investment. The company holds a 12-month option, expiring around April 2027, to walk away from the deal at any time.
The initial results are based on three diamond drill holes—ADD001, ADD006, and ADD013—which totaled 1,868 meters. All three holes were logged, sampled, and reported. Two rigs remain active on site.
Headline intercepts from the drilling include:
- C3 Zone, ADD001: 3.3 g/t Au + 0.7% Sb over 10.55m (ETW 10.39m) from 156.3m; including 17.0 g/t Au + 5.9% Sb over 1.25m (ETW 1.23m).
- C2W Zone, ADD001: 1.2 g/t Au + 2.5% Sb over 9.71m (ETW 4.85m) from 306.3m; including 4.6 g/t Au + 20.6% Sb over 0.40m (ETW 0.20m).
- C2W Zone, ADD006: 2.1 g/t Au + 0.5% Sb over 10.02m (ETW 6.44m) from 221.7m; including 12.6 g/t Au over 0.36m (ETW 0.23m).
- C2W Zone, ADD013: 0.6 g/t Au + 0.8% Sb over 22.64m (ETW 20.68m) from 592.59m; including 2.1 g/t Au + 17.3% Sb over 0.39m (ETW 0.31m).
- C2E Zone, ADD001: 1.1 g/t Au over 13.70m (ETW 9.52m).
- C1 Zone, ADD006: 2.2 g/t Au over 24.10m (ETW 15.49m).
- N1 Zone, ADD001: 2.9 g/t Au over 7.24m (ETW 4.15m).
Additional intercepts identified new domains in ADD001, reporting 1.1 g/t Au + 0.1% Sb over 30.75m (ETW 17.64m) and 1.8 g/t Au + 0.2% Sb over 42.01m (ETW 32.18m), which included 6.3 g/t Au over 3.38m (ETW 2.59m) and 0.5 g/t Au + 18.7% Sb over 0.45m. A new domain in ADD006 reported 1.2 g/t Au + 0.1% Sb over 22.49m (ETW 16.18m).
Alkane stated that the system has been "confirmed" and "extended," noting that the C2 zone was hit 115m below its previously known extent. The company described the property as a "Costerfield analogue" with wide zones extending up to 32m ETW.
Metal-equivalent calculations were disclosed using gold at US$4,000/oz and antimony at US$26,400/t, with recovery rates of 90% for gold and 89% for antimony. A composite cutoff of 1 g/t AuEq was applied with 5m internal dilution, or 5 g/t AuEq / 2m dilution for "including" intercepts. Intercepts below 3.5 g/t AuEq x ETW were not reported.
Alkane Resources Limited (ALK) is a mid-tier producer with a market capitalization of approximately A$2.34bn, holding A$439m in cash and bullion, and reporting a FY26 net profit of A$228.7m. Drill results at a producer typically do not move the stock unless they alter reserves or mine life; this release changes neither.
It was not driven by Nagambie, which appeared only as a line item in the July quarterly report stating "527m of diamond drilling completed for resource delineation." The market is not currently paying for Nagambie to repeat anything.
For an unpriced result to be considered materially positive, it must be significantly better in grade-and-width substance than anything previously demonstrated on the property. Against the property anchor of the 2024 Inferred resource (3.3 g/t Au, 3.9% Sb, ~10.1 g/t AuEq), these holes are lower grade at higher width, with antimony well below resource grade. The only genuinely new dimension is the 115m down-dip step at C2 and two unconfirmed wide halos, representing confirmation plus modest extension rather than higher-grade rock.
The entire Nagambie 2024 in-situ resource is approximately 58 koz Au and 20,800 t Sb (~175 koz AuEq). Even if the current program doubles or triples this figure, third-party comparables in this niche are instructive. Rua Gold's Auld Creek, containing 0.3 Mt Indicated and 1.3 Mt Inferred at 5.67/3.66 g/t AuEq (~200 koz AuEq contained), carries a PEA NPV5% of ~US$42m in the base case and ~US$113m at spot gold, over a 5.5-year, 250 ktpa operation. A realistic Nagambie NPV ceiling is in the same order of magnitude, of which Alkane would own 60-80% after earning in—well under 5% of Alkane's market capitalization, years from any cash flow, on a property Alkane can still walk away from.
Strategically, Nagambie is 40km from Costerfield, and antimony is a strategic and critical mineral with a market that Costerfield already sells into. If Nagambie ore were ever trucked to the 140 ktpa Costerfield plant, it would be incremental feed, not a new mine. This represents optionality, not value today.
Regarding the week's news flow, the 14 October Peak Hill deep hole (PHD084) was effectively a miss, as the porphyry target was not resolved and the best mineralisation was 153m at 0.11 g/t Au. The stock has drifted from A$2.03 on 18 September to A$1.65-1.75 over October.
Alkane Resources Limited (ALK) is an Australian gold and antimony producer that completed a merger of equals with Mandalay Resources on 5 August 2025. The combined entity operates three wholly-owned mines and one large development project.
The Tomingley mine in New South Wales, which features both open pit and underground operations, holds Measured and Indicated resources of 17.302 Mt at 2.1 g/t Au for 1,184 koz, with reserves of 11.401 Mt at 1.7 g/t Au for 641 koz. The site has set FY27 guidance for 78-84 koz AuEq at an All-In Sustaining Cost (AISC) of A$2,600-2,900/oz.
At the Costerfield mine in Victoria, an underground gold-antimony operation, Measured and Indicated resources stand at 1.993 Mt at 6.0 g/t Au and 2.1% Sb. Reserves are recorded at 0.960 Mt at 5.5 g/t Au and 1.6% Sb, containing 170 koz Au and 15.0 kt Sb. FY27 guidance targets 37-39 koz Au plus 1,200-1,500 t Sb, equivalent to 44-48 koz AuEq, at an AISC of A$2,700-3,000/oz. This asset is intended to be fed by the Nagambie earn-in.
The Björkdal mine in Sweden, operating as both underground and open pit, reports Measured and Indicated resources of 22.474 Mt at 2.07 g/t Au for 1,497 koz, with reserves of 13.121 Mt at 1.33 g/t Au for 563 koz. FY27 guidance projects 41-45 koz Au at an AISC of A$3,300-3,700/oz, marking it as the highest-cost asset. Growth potential at Björkdal is linked to the Storheden satellite, which holds Indicated resources of 1.075 Mt at 2.51 g/t Au and Inferred resources of 1.846 Mt at 2.11 g/t Au.
The Boda-Kaiser project in New South Wales contains 796 Mt at 0.58 g/t Au and 0.33% Cu, representing approximately 14.7 moz AuEq. A scoping study released in July 2024 outlined a 20 Mtpa operation with a ~13-year life, a 24% IRR, and an AISC of ~A$630/oz net of copper. The company is targeting a Final Investment Decision (FID) around 2028.
Exploration activities are underway across the Northern Molong porphyry district, where low-grade results have been reported to date, as well as at Peak Hill, where a deep porphyry target remains unresolved. Additional exploration is focused on Storheden and the Nagambie earn-in joint venture with Nagambie Resources, in which Alkane holds a 60-80% interest.
Financially, Alkane reported a FY26 net profit of A$228.7m on revenue of A$935.8m, with operating cash flow of A$460.3m. As of 30 June 2026, the company held A$431.9m in cash against total debt of A$15.1m in equipment finance. The book value per share stood at A$0.82. The company declared a maiden fully franked dividend of 2.0 cents per share, paid on 1 October 2026, and announced an on-market buyback of up to A$50m over 12 months. These capital returns were driven by a realised gold price of A$5,664/oz in FY26, which rose to A$6,330/oz in the March 2026 quarter.