Alkane Resources' (ASX:ALK) consolidated June quarter production of 42,500 gold equivalent ounces was slightly ahead of expectations, and the company remains "a preferred gold producer," Euroz Hartleys said in a Tuesday note.

The June quarter saw Alkane post a cash build of AU$104 million for free cash flow of AU$214 million over the course of the second half of fiscal year 2026, beating Euroz Hartleys' June quarter free cash flow forecast of AU$69 million largely due to higher sales.

The company also proposed its first-ever, fully franked dividend of AU$0.02 per share. Going forward, the investment firm said it now models flat interim and final dividends of AU$0.01 per share in the absence of a formal dividend policy.

The equity research firm adjusted its fiscal year 2027 production estimate for Alkane lower to 172,000 gold equivalent ounces and an all-in sustaining cost forecast higher to AU$2,902 per ounce. It also revised its modelled nine-year mine plan at the Björkdal asset in Sweden, where production is expected to rise and costs to fall as lower-grade surface stockpile feed is displaced by higher-grade feed from additional production areas.

Euroz Hartleys maintained a buy rating on Alkane Resources while lowering the target price to AU$2.28 per share from AU$2.53.

The company's shares gained 4% in recent Wednesday trade.