K2Fly extends deal with Alcoa, ‘cautiously optimistic’ on pipeline for its SaaS-based tailings solution
SaaS-based resources technology company K2Fly (ASX:K2F) has expanded its commercial alliance with US multinational Alcoa, announcing a new contract this morning.
The deal is for a five-year term starting with recurring revenues of $180,000, increasing to $250,000 in the fifth year.
Alcoa — one of the world’s largest bauxite miners — will roll out the platform across seven sites globally, and will use it to regulate and streamline its processes around tailings management.
Tailings are rock waste generated as a by-product of the mining process, and responsible disposal measures are a pre-requisite for any mining program.
Commenting on the deal, K2Fly said the deal represents “the first phase of a potential global roll out of the tailings solution”.
Investors sent K2F shares around 10% higher in morning trade, helping the stock bounce off recent lows at 26c — down from 2021 highs above 40c.
The company provides software solutions focused on automated compliance procedures, to help clients streamline solutions for operational challenges specific to the mining sector.
The Alcoa agreement builds off a separate deal the two companies signed in January — a five-year agreement with a total contract value of $573,600 for K2Fly’s s RCubed resource inventory solution.
K2Fly also said its latest tailings-related contract is a by-product of its March acquisition of Decipher – a separate SaaS business focused on efficient mine closure and rehabilitation practices.
“As more companies commit to the Global Industry Standard on Tailings Management (GISTM) we are likely to see continued growth in this solution,” the company said.
K2Fly said all 28 member companies of the International Council for Mining and Metals (ICMM) have committed to the GISTM, where the deadline to have adherent solutions in place is August 2023.
“Alcoa is the third member of the ICMM to commit to the K2fly Dams Tailings solution,” the company said.
Management is “cautiously optimistic” that the solution developed by Decipher will continue to play a key role in the tailings transition, and the company is “actively pursuing opportunities with both existing clients and prospective clients” in this area, it said.