Alkane Resources Ltd (ASX: ALK) shares were on fire on Monday.
The ASX gold stock raced 11% higher to end the session at $1.76.
This lifted its market capitalisation to $2.4 billion, which is the highest it has ever been.
The good news is that Bell Potter thinks there's more to come and is tipping this ASX gold stock as a buy.
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What is the broker saying?
Bell Potter was pleased with the company's half-year results release on Monday. In response to the release, the broker said:
ALK reported a 1HFY26 financial result broadly in-line with our expectations. The result was distorted by the completion of the merger with Mandalay during the period. Compared with our forecasts, revenue was a slight beat and some costs were reported below the line. Key metrics included revenue of $404m (vs BPe $385m), EBITDA of $170m (vs BPe $148m) and statutory NPAT of $65m (vs BPe $69m). […] ALK's gold hedge book remains in place, with 46,150oz @ A$2,862/oz for delivery to June 2027. Following the merger with Mandalay this is diluted down to <20% of production providing relatively greater leverage to the gold price.
But the real standout for the broker was a notable step-up in operational and financial performance during the second quarter. It believes that if this continues, the market could re-rate this ASX gold stock. It adds:
In our view, the highlight and key takeaway from the result was the significant step-up in operational and financial performance between 1QFY26 and 2QFY26, which marked the first full quarter of operation for the consolidated Alkane/Mandalay group. Group production lifted from 30.0koz to 42.8koz qoq, AISC dropped from A$2,988/oz to A$2,739/oz qoq. EBITDA (adjusted) lifted by 287%, from $38m in 1QFY26 to $147m in 2QFY26 and EBITDA (adjusted) margins lifted from 26% to 57% qoq.
While benefiting from the tailwinds of rising gold prices, it still demonstrated a substantially improved foundation for ALK. We anticipate that if ALK maintains consistent delivery at this level, the market will continue to positively re-rate the stock.
Should you buy this ASX gold stock?
According to the note, the broker has retained its buy rating and $1.95 price target on Alkane Resources shares.
Based on its current share price of $1.76, this implies potential upside of approximately 11% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
The improving operational performance has ALK tracking to meet FY26 production and cost guidance, which is unchanged. ALK offers multi-mine gold and antimony exposure across three attractive jurisdictions, a strong balance sheet and operating platform focused on organic and inorganic growth options. We retain our Buy recommendation and $1.95/sh target price.
