Alkane Resources Limited

Thank you for standing by. This is the conference operator. Welcome to the LKN Resources Second Quarter Fiscal Year 2026 Financial and Operating Results Conference Call and Webcast. As a reminder, all participants on the telephone are in listen-only mode, and the conference is being recorded. After management's presentation, there will be opportunity to ask questions. For those on the telephone, to join the question queue, you may press star 11 on your telephone keypad. Participants on the webcast may type your questions in the Q&A feature in the webcast. Now let me hand the call over to Natalie Chapman, Alkane's Corporate Communications Manager.

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 alcres.com. Today's press release, the financial statements and the MD&A are all posted on our website and CETA+. For those of you on the webcast, please move through the presentation slide yourself as directed by our presenters. Moving on to slide two. 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 two fiscal year 2026 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 quarter and half yearly results, please remember that Alkane has a June 30th fiscal year end. So the quarter ending December 31, 2025 is our second quarter of the 2026 fiscal year. And as we closed the merger with Mandalay Resources on August the 5th, 2025, our group financial and operating first half fiscal year fiscal 2026 results shown today only include five months from the Costa Field and Bjorkdale Mines, the former Mandalay operations, and a complete six months of results from Tomingley. Please move on to slide three. Today's speakers from Alkane Resources are Nick Earnor, Managing Director and Chief Executive Officer, and James Carter, Chief Financial Officer. I'll now hand the call over to Nick Earnor.

Hi everyone, and thanks for joining us today. Let's go to slide four, which provides a quick summary, highlighting our record achievements on our very successful first half of 2026. Alcan had a record-setting second quarter and first half of fiscal 2026, both operationally and financially. We produced just over 43,600 gold equivalent ounces in Q2. which gives us just over 74,000 gold equivalent ounces for the first half of 2026. Now remember here, the ex-Mandeley asset production from July, the month of July, is not included in that number. And so when we look at our full year, so the full 12 months including July, including Mandalay assets, we're on track to meet that group 2026 guidance of 160,000 to 175,000 gold equivalent ounces. So given the strong prices for gold, the strong prices for antimony, and our great production results, our mines generated Australian dollar, 133 million of operating cash flow for the quarter, which has boosted our already strong financial position. As a quarter end, we had Australian dollar, 246 million in cash, bullion, and liquid investments on hand. This strong financial position, combined with what we expect to be continued robust free cash flow from our operations, allows Alkane to aggressively grow the company through exploration, capital programs in each of our mines, as well as advance the Bode-Kaiser copper-gold porphyry project and opportunistically grow the company organically. Now let me move on to slide five to get into more details on the quarter. On a consolidated basis, in Q2, Alkane produced nearly 43,000 ounces of gold and 267 tons of anthony, which equates to nearly 44,000 gold equivalent ounces. All of these are records for Alkane as a company. This was from mining nearly 581,000 tonnes of ore at an average gold grade of just under 2.4 grams per tonne and an average antimony grade of just under 1%. Recoveries of just over 90% gold and just under 87% antimony were higher than in Q1. Now, I'm going to get into specifics with each mine shortly, but let me summarise. Overall, all our mines are operating well. and all of them meet our own expectations, which are very high. So let's move on to slide six and look at Tommingley. In Q2, we processed nearly 319,000 tonnes of ore and an average recovery rate of 89.8% and an average grade of two and a half grams per tonne. This led the mine to produce a bit over 22,000 ounces of gold. This is 20% higher than we got in Q1. High production came from slightly improved operations but mostly from the planned mining sequence moving into higher-grade zones. Also, continued cost management. And this resulted in all in sustaining costs in Q2 being Aussie $2,216 per ounce. The US dollar amount is on the screen there. This is 16% lower than in Q1. So the primary source of auric tomingly continues to be from the Roswell underground deposit. During the quarter, And I'm going to describe, this is ordinary course of business for us, but I want to give you detail on us. We had some minor challenges. We had some shock credit downtime that delayed our pace fill. We had some lower development rates leading to lower development ore. And we redesigned some stope shapes to improve load recovery. But all these issues were overcome pretty rapidly, and like I said, are part of the ordinary course of business. Our processing plant continues to perform well. We're milling in excess of budget, And primarily this is a result of us inserting a mobile crusher to pre-crush the material prior to entering our processing circuit. So this pre-crushing material entering the circuit has seen a nominal increase in milling rates to approximately 1.3 million tonnes per annum. With further optimisation on both throughput and cost options for this mobile crusher continuing. Capital expenditure during the quarter was mainly for the new highway realignment project. Construction of this is expected to be completed in about a year from now in 2027. This is a high-return project which allows us to access the high-grade San Antonio deposits in two new open-cut mines. Bottom line, improved productivity, lower costs, high gold grade, high gold prices. Cash flow from Tom Ingle was Australian $67 million in the second quarter, or a bit over 70% higher than Q1. Moving on to slide seven, Q2. At Bjorkdal, we processed nearly 330,000 tonnes of ore with an average grade of 1.04 grams per tonne and an average recovery rate of 87.4%. This allowed us to produce just under 10,000 ounces of gold. All in sustaining costs in Q2 were Australian, 4,117 per ounce, again, the US is on your screen, or 2% higher than in Q1. Bjorkdal was a solid quarter mining performance. All production's going well. We've got consistent stope productivity, and we've got stable development activities. We've also started replacing some critical equipment, which has resulted, as you'd hope, in machine availability. Further equipment replacements are continuing in this quarter, current quarter three. Mill throughput was a little bit slower, I mean lower, than the previous quarter. This is primarily due to our mill reline. The new linings we put in were wearing slightly slower than the anticipated rate. Good for relining. but it limited our maximum allowable mill load. The completion and commissioning of the return water system from the mine as well has also had a positive impact on float performance to date, which has led to improved recovery. With improved productivity and high gold prices, operating cash flow from Yorkdale was Australian 35 million for the second quarter. Onto slide eight. At Costa Field, our gold and antimony mine, we processed nearly 35,000 tonnes of ore. In Q2, we planned to be in a higher grade sequence in the mine. Therefore, we achieved an average gold grade of just over 10.4 grams per tonne and an average antimony grade of 0.91%. Both of these were higher than in Q1. Gold recovery rates of 93.9% and an antimony recovery rate of 86.8% were also higher than in Q1. Our increased plant efficiency and throughput rates, particularly as well as the grade, allowed the mine to produce 10,790 ounces of gold and 267 tons of antimony, or 11,686 gold equivalent ounces. All in sustaining costs in Q2 were Australian $2,149 per gold equivalent ounce, resulting in a 12% decrease from Q1. And this demonstrates the focus we have on getting high grade in and expanding our production rates. Cost of field summary, steady operational performance during the quarter, strong mining productivity. As well, we continue to advance several initiatives to improve our ore quality and recovery. We continue to try and optimize drill and blast optimization, remembering this is a narrow vein stoping environment where we're trying to keep our widths as tight as possible. We continue to focus on operator training and we are moving towards emulsion explosives because we want to improve some recovery and reduce dilution. So we prioritize here on Costa Field, operational consistency and grade control, and we use this to underpin our strong production outcomes that we expect to get over the coming quarters. So with this great productivity, with our cost control, high gold prices, and of course high gold grade, operating cash flow from Costa Field was Aussie 30 million for the second quarter. Now, moving on to slide nine, One of the key strategic initiatives that we have is to drive organic growth by increasing mineral resources. We have an aggressive exploration program across our portfolio. I'm gonna tell you about that now. So on slide nine here that we're at. At Tommy Lynn Q2, we invested two million Aussie for the quarter in several programs. This includes one and two on the picture, extension drilling under the existing pits of Wyoming and then Coloma North. Number four on the picture, resource infill drilling at Roswell. And we get results here like just under eight meters at nearly half an ounce per tonne. At three, number three, discovery of a new zone of gold rich mineralization at McLean's right next to existing infrastructure. Intercepting gold intercepts like 26 meters at 4.36 grams per tonne of gold. Down at number five, and we own the land under this, drilling in El Paso, which also resulted in several significant intercepts, including 8.2 metres at 3.74 grams per tonne. And then last but not least, at number six, we commenced testing Peak Hill for its gold copper porphyry potential, and number seven, we're conducting geophysical targeting and drill testing for low-sulfidation epithermal gold-caused veins at Glen Islay. What I wanna show you here is that a lot is happening at Tom and Lee to expand the resources. And more importantly, that the sheer volume and range and distance of this work alone demonstrates the big potential and the reason why we continue to focus on exploration. So let's move on to slide 10, Bjorkdal exploration. Here we invested Australian two million on a program at number three, there, Storheden, and on two programs to test the northern and eastern depth extensions, numbers one and two, with the goal of extending the ore body that's currently being mined. So for example, at Storheden, the number three, the results of this drilling highlighted the doubling of the known depth and extent within a series of Bjorkdal, just like the deposit to the south style veins, interpreted across three target domains. This was all released in December. The highlight results included 34 grams per tonne over 1.6 metres, 142 grams per tonne over 0.6 metres, and 111 grams per tonne over half a metre. This narrow vein, high grade, this is the backbone of what we see at Bjorkdal, and we've got the expertise to mine these type of veins, either narrow vein or over broader swarms, efficiently. In additional, over at number four, to the right of your page, workers recently commenced to extend the North Berriot resource. So let's move on to slide 11. At Costaville, we invested six million Australian dollars in Q2 on near-mine drilling with three main focus areas. Number one, Brunswick South drilling, we focused there on building the high-grade intercepts we discovered earlier in the year, so earlier in 2025, with progression to infill drilling late in the quarter. And number two, Kendall drilling. We're exploring a series of veins, quite high-grade, above the currently active Yule workings. And number three, the Sub-King Cobra, we call it. We're drilling focused both on infill and extending the mineral resources below the existing Cuffley and Augusta workings. But additionally, perhaps even more excitingly, numbers four and five, True Blue has progressed with three diamond rigs predominantly concentrating on infill drilling with a focus on step-out testing at our surface geochemical anomaly there. Meanwhile, number six, we're also testing the potential for a Sunday creek stone mineralization just below Costa Field's historic mines. So moving on to slide 12, this is the Northern Molong Porphyry Project, the entirety of which is shown on the map of this slide, stylized map on this slide, and this is a highly prospective gold and copper corridor. This project also encompasses, in the bottom right of your page, our Bode-Keyser copper-gold project. During the quarter, we invested three million Australian dollars on several programs, including a mobile magno-telluric survey we completed across most of the deposit you see there, and we think this will guide us towards future high-value work programs. We continue to make progress on a 4,500-meter reconnaissance drill program to learn more about the project's potential. Of course, we'll announce results as we receive them. What I want to make clear to you all, the reason why we're focused on this is we're looking to further increase the already substantial gold and copper inventory. This project and what can come from it is incredibly leveraged to the current price. As you can see, there's heaps of exploration work going on at each of our projects. Our goal is to expand resources to increase mine life production levels and drive new discoveries. Undoubtedly, I want you to see that exploration is a key pillar of our strategy that's fundamental to our organic growth objectives. And with that, I'm going to hand over to you now, Jim, to provide a review of our financial performance. Thanks.