KGL Resources has entered into a precious metals purchase agreement totalling US$300 million (AU$455 million) with Wheaton Precious Metals to fund its Jervois copper project in the Northern Territory.
The US$300 million package is structured to provide high-level flexibility during the risky construction and ramp-up phases. It includes US$275 million in upfront cash, with US$32 million available immediately as an early deposit and the remaining US$243 million in four tranches following the achievement of certain construction expenditure milestones.
The agreement marks Wheaton’s first streaming transaction in Australia and follows Wheaton’s entry into a streaming agreement with respect of BHP’s portion of the Antamina mine.
For KGL, the deal applies only to the silver and gold by-products of the mine. The company’s primary copper production remains unencumbered, allowing KGL to maintain full exposure to the global copper market, where prices are tightening due to the energy transition.
KGL CEO Sam Strohmayr said: “This is an exciting and significant milestone for KGL, which supports the next phases of advancing the Jervois project towards production.”
KGL Chairman Jeff Gerard added that the proposal was the most attractive following a competitive global search for capital, noting the absence of traditional fixed repayment obligations and restrictive bank-style covenants.
The agreement is a major step forward towards development of KGL’s Jervois project. The company is now finalising the scope and cost of the process plant construction contract, updating the production schedule and incorporating changes in commodity prices.
The company expects that both capital costs and revenue forecasts will increase relative to its 2025 Feasibility Study, with an official update by May.
Wheaton has further signalled its confidence in Jervois by committing to participate in future equity raises, potentially injecting an additional A$35 million into the project.
“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,” Strohmayr said.