Toubani’s Kobada Project Faces Execution Risks Despite Strategic A$29M Raise

Strategic Capital Injection Strengthens Kobada Development

Toubani Resources Limited (ASX: TRE) has successfully secured A$29 million through a two-tranche placement priced at A$0.24 per share, a modest discount to its recent trading price but a premium to its 30-day VWAP. The cornerstone of this capital raise is a transformational A$15.2 million strategic investment by A2MP Investments DMCC, a subsidiary of Singapore-based Eagle Eye Asset Holdings, supported by the African Export-Import Bank (Afreximbank). This partnership not only injects equity but also brings a non-binding commitment for a substantial US$160 million debt facility aimed at advancing the Kobada Gold Project in Mali.

With A2MP poised to hold an 18% stake on a pro-forma basis, the strategic alliance signals a significant vote of confidence in Kobada’s potential. The partnership is further cemented by the planned appointment of A2MP’s Director, Gaurav Gupta, to Toubani’s board, who will play an active role in project financing and stakeholder engagement as the company moves toward a final investment decision targeted for late 2025.

Derisking Financing and Accelerating Project Milestones

The funds raised will be directed towards critical development activities including finalising in-country agreements under Mali’s 2023 mining code, completing environmental and social impact assessments, and initiating pre-engineering and diamond drilling programs. These steps are designed to derisk the project’s execution and expand the resource base, particularly testing deeper mineralisation below the current average drill depth of approximately 110 metres.

Importantly, the strategic partnership with A2MP and Afreximbank enhances Toubani’s access to African financial networks and expertise, which is expected to streamline project financing and potentially accelerate the timeline to the final investment decision. The inclusion of free-attaching options exercisable at A$0.336 with a three-year expiry adds an incentive layer for investors, aligning interests with the company’s growth trajectory.

Governance and Shareholder Participation

Alongside the placement, Toubani’s directors have signalled their intention to participate by subscribing for approximately A$290,000 worth of shares and options, subject to shareholder approval. The second tranche of the placement, which includes A2MP’s strategic investment, awaits approval at an extraordinary general meeting expected in July 2025. The company has also committed to paying a 3% fee on the strategic investment amount and additional fees linked to the debt facility, reflecting the commercial terms underpinning this partnership.

Managing Director Phil Russo emphasised the alignment of technical expertise and financial backing, highlighting the partnership as a pivotal step in realising Kobada’s value. Meanwhile, A2MP’s Gaurav Gupta expressed confidence in the project’s prospects and the opportunity to leverage their extensive African network to support Toubani’s ambitions.

Looking Ahead

As Toubani advances through a milestone-rich phase, including permitting, engineering, and resource expansion, the strategic capital and debt commitments provide a robust platform to navigate the complexities of project development in West Africa. The collaboration with A2MP and Afreximbank not only strengthens Toubani’s financial position but also embeds valuable regional expertise, potentially setting a precedent for future resource development partnerships on the continent.