Toubani Resources has announced securing a A$395m package to fully fund the construction of its Kobada gold project in Mali.
The package includes a A$242m gold stream agreement with Eagle Eye Asset Holdings (EEA), a major existing shareholder.
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Additionally, it involves raising A$26m through the accelerated exercise of existing options held by EEA and a A$125m multi-tranche equity placement to institutional, sophisticated and professional investors at a price of A$0.40 per share.
The financing comes in the wake of Toubani’s successful definitive feasibility study (DFS) for the Kobada project.
The DFS revealed a cost-effective, high-profit operation that is expected to yield 162,000oz of gold annually during the initial seven years, all sourced from high-margin oxide ore.
At a gold price set at $2,200/oz, the DFS yielded a post-tax net present value (NPV) of $500m, applying an 8% discount rate, and achieved an internal rate of return (IRR) of 50%.
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By GlobalDataIf the gold price increases to $3,000/oz, these figures would rise to an NPV of $951m and a IRR of 79%.
Toubani managing director Phil Russo said: “Today’s funding package marks a company-defining milestone for Toubani Resources, enabling us to advance the Kobada Gold Project and move decisively toward becoming the next West African gold producer.
“Successfully de-risking Kobada to this pivotal point is the culmination of several years of disciplined execution against our strategy. This achievement is underpinned by the strength of the Kobada Project and the invaluable support of our partners – in particular, Eagle Eye Asset Holdings whom I wish to acknowledge. They share our conviction in the significant value of Kobada and have played a fundamental role in unlocking this outcome in Mali today.
“We believe Kobada is a project of genuine regional significance – technically simple, oxide-dominant and highly compelling. The recognition from both long-term shareholders and several new high-calibre institutional investors reflects the clear re-rating potential we offer relative to our producing peers, and the defined pathway we have now set to realise that value.”
EEA has committed to investing $160m in exchange for an 11.1% share of the gold production. The purchase price for this gold is set at 20% of the current market spot price.
The A$125m placement will be carried out in three phases, with A$45m coming from EEA, pending approval from the Foreign Investment Review Board and shareholders.
The placement price represents a 5.9% discount compared to Toubani’s most recent trading price of A$0.425.
EEA plans to exercise 78 million existing options at a price of A$0.336 each, which will generate an additional A$26m in funds and increase its shareholding to approximately 35%.
Funds will cover Kobada’s $216m development capital requirements, including $60m for plant construction and $43m for non-process infrastructure.
The budget includes an additional $13m dedicated to exploration and growth initiatives, $45m allocated for corporate and working capital needs, and $3m for transaction expenses.
Toubani expects to reach a final investment decision this year and aims to commence first gold production by the third quarter of 2027.
