ASX-listed Toubani Resources on Friday announced what it described as a "company-defining" A$395-million funding package to fully finance the construction of its flagship Kobada gold project in Mali.

The package comprises a $160-million (A$242-million) gold stream agreement with major shareholder Eagle Eye Asset Holdings (EEA), an additional A$26-million through the accelerated exercise of existing EEA options, and a A$125-million multi-tranche equity placement to institutional, sophisticated, and professional investors at A$0.40 a share.

The funding follows the positive results of Toubani’s definitive feasibility study (DFS) for Kobada, which outlined a low-cost, high-margin operation producing 162 000 oz/y of gold over the first seven years – all from high-margin oxide ore. At a gold price of $2 200/oz, the DFS delivered a post-tax net present value, using an 8% discount, of $500-million and an internal rate of return of 50%, rising to $951-million and 79% at $3 000/oz. Initial capital expenditure is estimated at $216-million, with an all-in sustaining cost of between $1 175/oz and $1 317/oz.

MD Phil Russo said the transaction positioned Toubani to become the next significant gold producer in West Africa.

“Successfully derisking Kobada to this pivotal point is the culmination of several years of disciplined execution against our strategy,” Russo said. “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.”

He said the funding commitments reflected strong recognition from both long-term shareholders and new institutional investors of Kobada’s value and growth potential.

“We believe Kobada is a project of genuine regional significance – technically simple, oxide-dominant, and highly compelling,” Russo added. “With this funding, we now have a defined pathway to move decisively toward production.”

DETAILS OF PACKAGE
EEA will provide $160-million in exchange for 11.1% of gold production at a price equal to 20% of the prevailing spot gold price. Toubani retains flexibility to draw down all, part, or none of the facility, depending on progress with an alternative senior debt process currently under way.

The A$125-million placement will be completed in three tranches, including A$45-million from EEA (subject to Foreign Investment Review Board and shareholder approval). The placement price represents a 5.9% discount to Toubani’s last traded price of A$0.425.

EEA will exercise 78-million existing options at A$0.336, adding A$26-million in funds and increasing its shareholding to around 35%.

Funds will be used to cover Kobada’s $216-million development capital requirements, including $60-million for plant construction, $21-million in owner’s project costs and community initiatives, and $43-million for non-process infrastructure such as the tailings storage facility and roads. Additional allocations include $13-million for exploration and growth, $45-million for corporate and working capital, and $3-million for transaction costs.

The funding allows Toubani to progress toward a final investment decision in calendar year 2025, with early commitments for long-lead items expected in the near term. First gold production is targeted for the third quarter of 2027.