This gold mine developer is worth a look, according to the analyst team at Canaccord Genuity, with a large drilling campaign underway and funding all sewn up for its project in the African nation of Mali.
When it comes to mining companies that are in the development phase, "derisking" is what it's all about, and according to the Canaccord team, Toubani Resources Ltd (ASX: TRE) is doing a good job of just that.
The company recently tied up a funding agreement to build its Kobada mine, with $242 million kicked via an existing shareholder, $26 million via the accelerated exercise of options from the same company, and $125 million via a multi-tranche placement at 40 cents per share.
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Exploration continuing
The company also recently announced its largest drilling program to date at Kobada, where it expects to drill 100,000m focused on expanding the current mineral resource.
The Canaccord team said they estimated that the funding lined up was enough to bring the Kobada project into production with an adequate working capital buffer.
They said that the company was well-placed with all the necessary approvals in place, "and recently announced the formalisation of the agreement with the Government of Mali which includes confirmation the project will be governed under the 2023 Mining Code and a capped government interest of 35%".
They added:
With the approvals and financing secured, final investment decision is fait accompli, in our view. Construction is set to commence in 1H26 with all major contracts awarded and long lead items ordered. We forecast an 18-month construction period ahead of first production in 2H27
They said, given that Mali was a developing nation, there was a "moderate to high" degree of "economic, political, social, legal and legislative risk''.
They added:
In August 2024, Mali adopted the 2023 Mining Code. Fiscal terms governing the project are subject to negotiation of a Mining Convention which is yet to be completed. There is a risk that negotiated fiscal terms may differ from our modelled assumptions and negatively impact our valuation.
Toubani's definitive feasibility study, Canaccord said, was released in late 2024 and proposed a mine life of about 10 years.
Toubani shares were changing hands for 49 cents yesterday. Canaccord Genuity has a speculative buy rating on the stock and a 12-month price target of $1.70, which was increased from $1.50 previously.
The company was valued at $290.3 million at the close of trade on Monday.
