K2Fly inks a three-year deal with Newcrest Mining, eyes opportunities in the US market
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Resource tech company K2Fly (ASX:K2F) has scored another contract win — this time with gold mining heavyweight Newcrest Mining (ASX:NCM).
The company will provide its RCubed software-as-a-service (SaaS) solution to Newcrest in a three-year deal, commencing immediately.
The front-weighted contract will deliver an estimated $330,000 of revenue over the course of the agreed term, with $150,000 of that in the first year.
K2F’s RCubed software is a compliance program that improves efficiencies for mining companies to meet their reporting requirements across different jurisdictions.
Along with the ASX, it’s compliant across the major stock exchanges in London, New York, Toronto and Johannesburg.
Shares in K2F rose by almost 8 per cent in morning trade to 20.5c.
As part of the deal, the RCubed software will be rolled out for Newcrest’s operations at seven sites across Australia, Indonesia and Papua New Guinea.
The software will be used to speed up the reporting process for the gold miner’s mineral resources and reserves in each of those jurisdictions.
Commercial Officer Nick Pollock said adding the largest gold producer on the ASX to K2F’s client base “adds to the growing momentum we are seeing within the mining industry, and its acceptance of RCubed as a resource governance reporting solution”.
In addition to the Newcrest deal, K2F is also eyeing opportunities in the US market stemming from potential changes to the regulatory environment.
A recent briefing paper from officials at the New York Stock Exchange (NYSE) highlighted incoming changes to disclosure requirements from US-listed mining companies.
The changes are designed to ensure “a more comprehensive understanding of a company’s mining assets”, K2F said.
“The main change is that the SEC requires disclosure of mineral resources as well as mineral reserves. Current, mineral resources need to be disclosed only in limited circumstances.”
The new rules are effective from January 2021, but companies with material mining operations will have the option to voluntarily comply before they take effect.
With a software capability that’s already built to improve compliance procedures with respect to both minerals and reserves, K2F says its RCubed platform is well-placed to meet pending demand in the US marketplace.
“The software fully complies with the requirements and the process is underpinned by integrated audit trails,” the company said.
“RCubed will support data reporting and approval workflows needed to comply with the amended SEC reporting rules. It also supports the importing of previous-year reporting data collected in compliance with existing SEC rules.”
To engage with the US market, the company is planning a targeted marketing campaign for NYSE-listed mining companies that will have to manage impending gaps in the disclosure and reporting processes.
Combined with its compliance solution in existing markets, K2F says the US regulatory shift will help to drive a “perfect storm” of demand for its SaaS offering over the short-to-medium term.