Alkane Resources (ASX:ALK) delivered a material production beat and strong free cash flow in the March quarter, lifting cash and bullion holdings while maintaining full-year guidance, Euroz Hartleys said in a note on Thursday.

The company produced 45,800 ounces of gold equivalent in the March quarter, exceeding Euroz Hartleys' 41,300-ounce forecast, driven by strong contributions from Tomingley mine in New South Wales, Costerfield mine in Victoria, and Bjorkdal mine in Sweden.

The firm highlighted the company's strong liquidity, with cash and bullion rising AU$130 million to AU$362 million despite taxes, forward sales, and timing impacts, taking total liquidity, including listed investments, to AU374 million.

The company reaffirmed its fiscal year 2026 guidance, while the firm anticipates June quarter production to ease to around 40,500 ounces of gold equivalent, pending adjustments after the full quarterly report.

The firm said the company remains overlooked despite two solid quarters following its merger with Mandalay Resources, noting that potential inclusion in Australia's benchmark index in June could serve as a near-term catalyst.

Euroz Hartleys maintained its buy rating on Alkane Resources with a price target of AU$2.50 per share.

The company's shares rose 3% in recent Thursday trade.