Australia's Toubani Resources has successfully navigated the challenging landscape created by Mali's tougher mining code, announcing on Monday an agreement with the State to develop the Kobada project under the provisions of the 2023 mining code. 

This solidifies the project’s fiscal foundation, propelling the company towards its final investment decision (FID). Once operational, Kobada is set to become one of Mali's largest gold mines, with the potential to produce more than 150 000 oz/y.

Toubani MD Phil Russo said the company was excited to cement its partnership with Mali. ". . . [we] value their continued support for the development of the Kobada gold project. As one of the premier oxide gold development assets in West Africa, Kobada's exceptional technical profile has enabled us to successfully finalise key fiscal terms with the State of Mali while preserving significant value for Toubani shareholders."

The agreement establishes a framework for development, with Toubani holding a 65% equity stake, while Mali will own 35%, which includes a 10% free carried interest and additional paid interests. The project also benefits from a 2% reduction in royalty rates, providing further financial certainty.

A major part of the agreement involves the establishment of a joint operating entity, Mines de Kobada, which will manage the mining operations and facilitate the transfer of the mining licence. Toubani and the State are also set to complete all necessary implementation documents, with the timely processing of the mining licence transfer expected soon.

As part of its derisking strategy, Toubani has updated its definitive feasibility study (DFS) to reflect the terms of the 2023 mining code. The technical design outcomes of the DFS update remain consistent with the DFS released in October 2024, with the main change resulting from the update being the changes to the economic outcomes of the project following the adoption of the 2023 mining code.

The updated DFS projects a mine life of 9.2 years, with an average production of 162 000 oz/y of gold, and an estimated post-tax net present value of $951-million based on a gold price of $3 000/oz.

"With this foundation in place and a clear and certain path forward, we are accelerating our project-readiness workstreams, including advancing our ESIA and project financing activities, as we move toward FID later this year," commented Russo.