Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Alkane Resources Limited (ASX: ALK) is an Australia-based gold production company with an exploration, development and investment portfolio. The Company’s projects and operations are primarily located in central western New South Wales.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~38.16% of the total shareholding. Gandel (Ian Jeffrey) and Van Eck Associates Corporation hold a maximum stake in the company at ~19.84% and ~3.72%, respectively.

1.4 Key Metrics: ALK reported a high quick ratio of around 3.17x in FY22 compared to the industry median of 1.39x. Further, the Company reported a low debt-to-equity ratio in FY22 of around 0.06x compared to the industry median of 0.18x. Below is captured the trend of the current ratio and net margin:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Insights of 1QFY23: During 1QFY23, the average price realized for gold was AUD 2,547 per oz versus AUD 2,467 per oz in 1QFY22. Further, the company expected the Tomingley Gold Extension Project approval from the NSW Department of Planning and Environment by the end of December, which is now expected by early February 2023.

2.3 Operational Achievement: The company has a successful track record of converting exploration to discovery and demonstrated a history of producing more ounces than expected. Further, the company also focused on strengthening its Environmental, Social and Governance (ESG) reporting.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 24, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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