KGL Resources (ASX:KGL) entered into a precious metals purchase agreement valued at US$300 million ($433 million) with Wheaton Precious Metals International late last week.
The agreement will partially fund the construction and development of the Jervois Copper Project in the Northern Territory, comprising a US$275 million stream upfront consideration and a US$25 million contingent cost overrun facility.
The stream upfront consideration will be provided at US$32 million available prior to construction expenditure as an early deposit, as well as US$243 million available across four tranches for milestones of certain construction expenditure.
KGL is in the process of finalising the scope and cost of the process plant construction contract, which may result in changes to the technical and economic framework for project delivery, which was outlined in the 2025 Feasibility Study.
Capital costs for the project and revenue forecasts are expected to increase. KGL intends to update the market by May 2026.
KGL Chairman Jeff Gerard says the company is pleased to receive such a “significant capital commitment from a leading global precious metals streaming company” as a major cornerstone partner for the Jervois Project.
“Our advisors ran a global process, and the Wheaton proposal was the most attractive on several fronts and suitable for our needs to finance Jervois,” Gerard says.
KGL CEO Sam Strohmayr says the partnership is a “culmination of a significant amount of work and collaboration” from KGL, advisors, and the Wheaton team.
“This is an exciting and significant milestone for KGL which supports the next phases of advancing the Jervois project towards production,” Strohmayr says.
“The near-term availability of the early deposit ensures we can maintain our development schedule, and we are now on the cusp of breaking ground on Australia’s next major copper mine.”
Last week Wheaton’s President, Haytham Hodaly, succeeded Randy Smallwood as CEO, as a part of the company’s plan to evolve its leadership team for growth trajectory.
Smallwood led the company, which he co-founded, for 15 years, and will assume the role of non-executive Chairman.
“I am honoured to step into the role of President and CEO at such an exciting time in both the company’s history and the broader precious metals market,” new CEO Hodaly says.
“We have a clear vision for the future and an exceptionally strong foundation from which to grow, positioning us well to support the next generation of mine builders in an unprecedented environment for gold and silver.”
Former CEO Smallwood says building and leading the company with a “dedicated and talented team” has been a highlight of his career.
“I am deeply grateful to the board — current and former members included — for its guidance and partnership over the past two decades, as well as our team for their steadfast commitment to creating what I believe is one of the strongest precious metals companies in the world today,” Smallwood says.
“I’d also like to extend my thanks to all of our stakeholders, for their continued trust and support as we helped transform the landscape of mining financing.”
Smallwood co-founded Wheaton in 2004 before stepping into the CEO role in 2011, guiding the company to become one of the “largest precious metals companies in the world”.
Wheaton is a precious metals streaming company focused primarily on gold and silver streaming agreements across a global portfolio of mining operations.
Write to Maddison Elliott at Mining.com.au
Images: KGL Resources
