KGL Resources Limited (ASX:KGL) has announced a significant funding milestone for its Jervois Copper Project in the Northern Territory. The company has entered into a Precious Metals Purchase Agreement (PMPA) totalling US$300 million with Wheaton Precious Metals International Ltd., a subsidiary of Wheaton Precious Metals Corp. KGL Resources is focused on developing copper and base metal resources. Their flagship project, Jervois, is poised to become a significant Australian copper producer.
The funding package includes a US$275 million Stream Upfront Consideration and a US$25 million Cost Overrun Facility. The upfront consideration is structured with US$32 million available as an Early Deposit prior to construction expenditure, and the remaining US$243 million to be released in four tranches upon achieving specific construction milestones. The agreement’s key terms include Wheaton receiving 75% of payable silver and gold produced until certain ounce delivery thresholds are met, after which the percentage reduces. KGL will receive ongoing payments for the purchased metal ounces, equivalent to 20% of the prevailing spot price.
The PMPA is secured against US dollar revenue, mitigating risk, and lacks traditional fixed repayment obligations, de-risking the project during commissioning and ramp-up. KGL retains full exposure to the copper market as its copper production remains unencumbered. The initial Early Deposit will be available upon satisfying customary conditions to progress Project construction. The agreement applies only to the Jervois tenements, excluding the Unca Creek tenement.
KGL is currently finalising the scope and cost of the process plant construction contract, updating the production schedule, and incorporating changes resulting from commodity price movements. An update to the 2025 Feasibility Study is expected by May 2026, anticipating increases in both overall Project capital costs and revenue forecasts. Wheaton has also committed to participate in any future equity raise by KGL in connection with funding the Jervois mine, for the lesser of up to (i) AU$35 million and (ii) that number of new shares representing 20% of the shares offered under the equity raise.
