KGL Resources Confirms A$1.2 Billion NPV for Jervois Copper Project

Robust Economics Signal Ready-to-Go Status for Jervois Project

KGL Resources Limited (ASX:KGL) has confirmed the financial and technical viability of its Jervois Copper-Silver-Gold Project in the Northern Territory with the release of its Baseline Economic Model (BEM). The model reveals a pre-tax Net Present Value (NPV8) of A$1.226 billion and an Internal Rate of Return (IRR) of 37%, figures that significantly improve upon the previous feasibility update from February 2025. Post-tax NPV stands at a healthy A$839 million, with a simple payback period of just over three years after plant ramp-up.

This strong economic profile is underpinned by an expanded production target of 18.5 million tonnes of ore over a 10-year mine life, delivering 276,000 tonnes of contained copper, 10.5 million ounces of silver, and 87,000 ounces of gold as concentrate. Notably, the project’s C1 cost has dropped to US$1.65 per pound of copper net of by-product credits, positioning Jervois towards the lower end of the global copper cost curve.

Technical Enhancements and Cost Escalations Reflected in Updated Model

The BEM incorporates updated market prices as of April 2026, with copper priced at US$6.06/lb, silver at US$80.75/oz, and gold at US$4,834/oz. These represent substantial increases of 32%, 148%, and 81% respectively compared to the previous feasibility study. The USD:AUD exchange rate has also shifted to 0.717 from 0.64. These market inputs have driven a 46% uplift in forecast sales revenue to A$6.46 billion over the life of mine.

Independent specialists played a critical role in refining the technical inputs: Xenith Consulting optimized open pit mine planning, expanding low-cost ore extraction; Sedgman Pty Ltd updated process plant design and metallurgical recovery algorithms, boosting metal recoveries by up to 5.8% for silver and 4.1% for gold; and Axiom Project Services integrated construction contract scopes and execution plans, ensuring realistic scheduling and cost estimates.

Despite a 21% increase in construction capital to A$439 million and peak funding requirements rising to A$584 million, the project remains financially compelling. Sustaining capital of A$290 million will be funded from operating cash flows. The construction timeline is set at 22 months post-Final Investment Decision (FID), targeting steady state production by the second half of 2028.

Strategic Funding and Offtake Agreements Progress

KGL’s recent US$300 million streaming agreement with Wheaton Precious Metals International Ltd, which provides US$275 million upfront and a US$25 million contingency facility, has been pivotal in de-risking the project’s financing. The streaming deal covers 66% of the precious metals production from the Jervois tenements, allowing KGL to retain a 48% effective economic interest in these metals. This arrangement complements ongoing discussions with funding partners and potential offtake counterparties, positioning KGL well for the upcoming FID.

The company’s CEO, Sam Strohmayr, highlighted the strengthened project delivery capabilities and the integration of industry expertise as key factors supporting confidence in meeting schedule and budget targets. Since his appointment, KGL has also enhanced governance with a Project Steering Committee and bolstered board independence, aligning with global Environmental, Social and Governance (ESG) standards through the Consolidated Mining Standard Initiative.

Exploration Upside and Market Fundamentals Bolster Long-Term Prospects

Beyond the current mine plan, KGL is leveraging integrated 3D geological modelling to focus exploration on high-grade zones within the 37 km² Jervois orebody and adjacent 78 km² Unca Creek tenement. These efforts aim to extend the mine life beyond the initial 10 years and unlock further value.

The timing of the BEM release is significant amid forecasts of looming global copper supply deficits. Industry heavyweights like BHP and Glencore project shortfalls potentially exceeding 10 million tonnes annually by 2035, driven by surging demand for electrification, digital infrastructure, and energy transition technologies. This backdrop lends strategic importance to Jervois as a high-grade, low capital intensity project ready to contribute to critical mineral supply chains.

Notably, KGL’s approach aligns with recent capital raising and leadership changes, including the appointment of Sam Strohmayr as CEO and a successful A$11 million raise earlier in 2026 to fund enabling works. These moves complement the company’s efforts to advance construction readiness and commercial negotiations, as detailed in recent updates.

While the BEM assumes prevailing market prices and cost escalations, KGL cautions that commodity price volatility, geopolitical risks, and funding uncertainties remain. The production targets include a modest proportion of Inferred Resources, which carry inherent geological uncertainty. Investors should weigh these factors carefully as the project moves toward its Final Investment Decision.