Geopolitical and Execution Risks Loom as Toubani Funds Kobada Development

• A$395 million funding package including US$160m gold streaming deal
• Fully funds Kobada Gold Project with 1.56Moz Ore Reserve
• Strong project economics, post-tax NPV US$500m and IRR 50%
• Equity placement and option exercises raise A$151m
• Advancing towards final investment decision in 2025

Funding Package Secures Kobada’s Future

Toubani Resources has announced a landmark A$395 million funding package to fully finance the development of its Kobada Gold Project in Mali. The package combines a US$160 million gold streaming agreement with Eagle Eye Asset Holdings, a A$125 million equity placement, and A$26 million from option exercises, providing the company with the capital needed to transition from developer to producer.

This comprehensive funding solution positions Kobada as a significant new gold producer in West Africa, underpinned by a technically simple, large-scale open pit deposit boasting a 1.56 million ounce Ore Reserve. The project’s economics are compelling, featuring a post-tax net present value of US$500 million and an internal rate of return of 50%, with a rapid payback period of under two years.

Project Highlights and Development Strategy

Kobada’s design leverages a conventional oxide flowsheet, which contributes to one of the lowest capital intensities in the sector, with initial development capital estimated at US$216 million. The mine is expected to produce an average of 162,000 ounces of gold annually over a nine-year life, with low all-in sustaining costs of US$1,175 per ounce.

The funding package will cover development capital, working capital, and exploration initiatives, enabling Toubani to accelerate project construction and commit to long lead items. The company is also progressing a senior debt facility, which could partially or fully replace the gold streaming component, reflecting a flexible and prudent capital structure approach.

Experienced Leadership and Strategic Partnerships

Toubani’s management team and board bring extensive experience in mining project development and financing, with backgrounds at major gold producers and investment banks. The company’s cornerstone shareholder, Eagle Eye Asset Holdings, not only provides significant funding but also strategic support, holding a pro-forma 35% stake post-funding.

The project benefits from Mali’s established mining jurisdiction, with the government’s 2023 mining code applied to Kobada, ensuring regulatory alignment and fostering a cooperative relationship with local authorities. Located in the Sikasso region near Bamako, Kobada is well positioned within a stable operating environment.

Risks and Outlook

Despite the strong fundamentals, investors should remain mindful of risks including geopolitical and regulatory uncertainties in Mali, commodity price volatility, and the inherent challenges of project execution. The funding package is conditional on shareholder and regulatory approvals, and the senior debt facility remains under negotiation.

Looking ahead, Toubani aims to reach a final investment decision by the end of 2025, with construction and first gold production targeted for 2026 and 2027 respectively. The company’s progress will be closely watched as it seeks to deliver on its promise of becoming a leading West African gold producer.

Bottom Line?

With full funding secured, Toubani is poised to transform Kobada from a promising project into a high-margin gold producer, but execution and geopolitical risks remain key watchpoints.

Questions in the middle?

• Will Toubani secure the necessary shareholder and regulatory approvals to draw down the full gold streaming facility?
• How will the ongoing senior debt negotiations impact the final capital structure and cost of funding?
• What is the potential for resource expansion beyond the current 1.56Moz Ore Reserve at Kobada?