Okay. Thank you for coming today. My name's Jeff Gerard. I'm the Executive Chairman of KGL, and I want to welcome everyone today to our Annual General Meeting of KGL Resources. I respectfully acknowledge that we meet today on the lands of the Turrbal people and pay my respects to their elders past and present. I also acknowledge the traditional custodians of the land in the Southern Northern Territory, represented by the Central Land Council, and the past and present traditional custodians of the land in which Jervois Copper Project is located. I also pay my respects to their elders past and present. To start the meeting, I really want to commence today by doing some introductions. Present today is Mr. Brian Gell, on the line is Mr. Ferdian Purnamasidi . He's in by the video conference.
I am also pleased to welcome Lindi Deguara , who will become an independent non-executive director at the conclusion of this meeting. Also present is our CFO, Anthony Liaw , our Company Secretary, Kylie Anderson, and Anthony White, who is representing our auditor, BDO. We have made some significant appointments to the team as we progressed from Feasibility Study Update issued in February 2025 to this AGM today. One of those key appointments is Konrad, K onrad Litfin. Konrad has been appointed as the Project Director, and Konrad's got a very strong and successful international record in project management and delivery. Please, at the end of today, make yourself known to Konrad. I am sure he would love to talk to you about the project. Also, Dean Adams commenced earlier in the year and brings KGL a wealth of executive management, project formation expertise, and stakeholder engagement.
Dean's not with us today, but he's been a great help as we move forward. Our latest significant shareholder, Resource Capital Fund, RCF, is attending by webinar, I believe. RCF is a global investment fund that's reviewed and participated in numerous mineral resource projects globally at all stages of their development. RCF acquired Denis Wood's shares and participated subsequently in the November placement, increasing their interest to 9.9%. As you know, Denis Wood resigned back in March 2024 from the position of Executive Chairman and was a great supporter of the company. The success of the company can be attributed to the existing management team and the long-serving employees. With the addition of these key people, the company is positioned to deliver the Jervois project once the current financing process is brought to completion. I'll talk a bit more about that as we go forward.
With those introductory remarks, I'd like to attend to the voting on the resolutions. I've been advised we have a quorum present, and I declare the meeting open. Today, we've got three resolutions to reappoint Brian to the board. Brian served on the board since 2023 as an independent non-executive director. The second resolution is to reappoint Ferdian into the board. Ferdian served on the board since April 2016, representing our largest shareholder, KMP. Ferdian is also the MD of MACH Energy and MACH Metals Australia. The third is an advisory vote on the remuneration report. Proxy numbers. Whoop, I've got a job to do here. These are the proxy numbers that we have currently. Everyone's fine with that? At today's meeting, all resolutions will be decided by poll rather than shove hands. I will advise you on what to do at the time.
Final confirmation of votes will be released to the ASX after the meeting. The notice of the Annual General Meeting was sent to all members of the company in accordance with the statutory requirements. As explained in the notice of meetings, I will be voting all proxies open to me in favor of the resolutions. Financial report. The first item, it's the first item. The first item of business is to receive and consider the financial report of the company and the reports of the directors and the auditors for the period ending 30 June 2025. Shareholders are entitled to ask the auditors who undertook the audit of the company's financial statement any relevant questions. Are there any such questions in relation to the company's financial statements and reports? I'll take that as a no. As I said previously, all resolutions will be decided by a poll.
I hereby appoint MUFG as the returning officer for voting. Those of you who are shareholders and have not already lodged your proxy, you will have a voting card given to you. The resolutions you are voting on are as follows: Resolution One, re-election of Director Mr. Brian Gell. Resolution Two, re-election of Director Mr. Ferdian Purnamasidi, and then Resolution Three, remuneration report. Are there any questions in relation to these resolutions? Please complete your yellow voting cards and hand it to the returning officer. Final results on the resolutions will be released to the ASX later today. I'll let people hand those over. Looks like a really big agenda. Hopefully, it won't take as long as it looks. I'll go through each one of those, touch on each, and then later, after we close the meeting, if there's any questions, we're quite happy to answer those.
2025, it's been a busy year. It's been a big year. Since the AGM in November 2024, a lot has happened. The team's worked tirelessly during the first half of the year to update our feasibility study that was released in February. We commenced a program to bring Jervois to the broader investment community in March based on that feasibility study update. We announced a rights issue in March for AUD 7.7 million. We were able to raise AUD 4.2 million. Consequently, we couldn't deliver all of the activities we planned, so we instigated a cost reduction program to preserve cash whilst achieving the priority activities. In April, we appointed external corporate advisors and commenced a project financing process targeting our combined debt equity investment against our peak funding. This project is continuing. In August, we released the results of a 3D modelling initiative.
Market coverage for the company commenced by two separate parties, MST and Morgans. We ran a tender process for the open pit contracting. The second capital raise was finalized this month, and this was in the form of a placement that raised AUD 11 million before costs, the majority of which has been directed towards advancing the Jervois project. This has meant that we've been able to continue to onboard the project delivery team. We've also established a project steering committee that includes external peer review experts during this formative period. We have made over 30 ASX announcements, multiple investor presentations, multiple stakeholder interactions, and continued to optimize the technical and cost aspects of the project whilst searching and appointing where funding permitted for the right people to take the project forward. ESG, environmental, social, and governance. This is a critical area that sustains our business.
We meet and strive to exceed expectations of our various stakeholders, employees, neighbors, regulators, and those farther afield. It guides how we manage and control and improve our performance. It covers our management plans, permits, engagements, policy, and operating standard compliance, which is the basis of our license to operate. KGL continues to maintain an exemplary safety record and environmental management performance with zero lost-time injuries and zero environmental incidents over the 2024-2025 year. To deliver the Jervois project, we have focused on operative risk management and effective controls, and we've recently established, as I mentioned before, the project steering committee to provide oversight and direction to the project delivery team headed by Konrad. I'm very pleased with our continued safety and environmental performance and see these aspects of our business as a foundation for delivering a world-class project.
In terms of exploration over the past decade, there's been extensive geophysical, geological, and structural data collected across KGL's Jervois and Unca Creek tenements. Historically, those data sets were analyzed independently, including their integration, which was limited integration due to computational constraints. Enabled by advancements in computing power, geoscientific expertise, and enriched geological data sets from drilling and core analysis, we've been able to model a unified data set that has provided improved resolution, geographical boundaries, and targeting precision. The initiative provides a foundation to enhance our exploration strategies, align drilling with known mineralization, and reveal previously unrecognized prospects. The program has been regarded as highly successful in providing focus for future exploration programs and predicting a significantly larger and deeper mineral system. The figure shows—on the first figure there, that really shows some key areas we're targeting. Maybe I can point out.
Reward is up the top here. Rockface is there. Bellb ird, which you probably—everyone's familiar with—is there. What it's suggesting is there are four areas that we really should focus on. That's area one, area two, area three, and area four, as highly prospective based on the modelling that we've done. In the short term, we're really focused on areas one and four as high probability prospects. In the longer term, what we've been able to identify is the area that sits below Bellb ird and Rockface is also highly prospective, and that's really covered under area two and area three as well. Future exploration will focus on further defining and ranking these targets with the objective of extending the Jervois mine life. In terms of priorities, after we commence construction, is the extension of the mine life through efficient, effective exploration to deliver significant value uplift.
In terms of the funding and cost management, historically, the company has had bigger plans in terms of project delivery than funding has allowed. In late 2024, we implemented a spend reduction program to ensure that the cash we had on hand was deployed efficiently to generate value. The results of this program can be seen in the accounts for the fiscal year 2025, showing an overall AUD 3.9 million reduction in spend year- on- year across really corporate overheads and exploration. We continue to restrict spending to the highest priorities. A further capital raise via share placement to sophisticated and institutional investors was completed earlier this month to keep the project on track. It also provided restructuring of our share register with cornerstone institutional and sophisticated investors. Project enablers.
During the year, we continue to progress with the project readiness by focusing on critical path packages, risk assessments across construction schedule and costs to update the project delivery baseline and commercial strategies whilst progressing project financing. Governance and project controls are being upgraded in accordance with the site activity requirements. We continue to work closely with contractors, government authorities, and local community to promote support for the development. Onboarding the A team for project delivery and bringing experienced and capable lead contractors for the construction and operation remain our objective. I am going to talk a little bit more about the project later. There have been a couple of questions come through, which we will address after the meeting. Positioning in the market, Jervois has a unique strategic advantage given its high-grade copper, gold, and silver suite of metals. It is best demonstrated by the multi-metal tailwinds over the last 12 months.
Copper price has increased by 25%. Gold price has increased by 55%, and silver price has increased by 65%. Jervois is primarily a copper project where gold and silver enhance the attractiveness, commercial resilience, and the finance ability of the project. KGL really stands in quite a unique position. We're positioned for the upside by ensuring the project is developed to be production-ready to capture the higher prices and margins as demand grows beyond the global supply capability. In my view, it's not about if supply-demand gap materialises and the commodity price escalates, but rather when. It's really about when and by how much. A little bit about the market. External factors continue to accelerate copper demand with industry producers forecasting the need for new mine supply to bridge the impending supply gap.
Copper demand drivers such as geopolitics, growth in key consuming nations together with commitments to carbon reduction targets, net zero initiatives continue to be variable in the outlook whilst electrification, AI implementation, to name but a few, continue. Copper is the foundation for economic development. Morgan Stanley is forecasting a supply shortfall to commence as early as 2026, and that shortfall continues to grow through the remainder of the decade and beyond. You can see by this chart here, that's really what the predictions are saying now. It goes to beyond a million tons of shortfall over the next few years. Market commentators and analysts remain steadfast in predicting significant supply-demand gaps supporting an increase in metal prices. Over the last next 12 months, copper prices in the range of AUD 12,000-AUD 13,500 a ton. That's AUD 5.50-AUD 6 a lbs, US dollars a lbs of forecast.
This represents a further 10%-20% increase on the current spot price, which has already increased by 25% this year. Longer-term price predictions are over 30% higher than today's copper price. What does it mean for Jervois? Looking at the valuation, the table on the screen comes from the FSU 2025 presentation. It is based on copper, gold, and silver prices back in February this year when it was released. The columns to the right show the potential improvement in NPV for the upside cases for copper price only. Back then, we kept the gold and silver prices flat. What it does not show is the positive impact on value due to recent gold and silver price hikes, the 55% and the 65% increases I mentioned before.
Pricing updates provided by UBS, Citibank, and Bank of America are now averaging over AUD 6 a lbs by 2027, really quite consistent with the incentive pricing numbers we put up almost 12 months ago, which is even higher than those incentive prices. Conceivably, post-tax valuations between AUD 700 million and AUD 1 billion are in reach for KGL, even based on the work that we did back when we released the feasibility study. What we are seeing is we are seeing those prices increase to the incentive pricing and beyond. Project highlights. We have talked about copper as irreplaceable. It is necessary for economic development and carbon reduction technologies. Jervois is unique and differentiated by high copper grade and precious metal byproducts. The project is technically robust and straightforward by virtue of being a high-grade sulphide delivering copper recoveries of circa 92%. When in operations, expected to generate significant positive annual cash flows.
This expectation increases with already observed price increases for copper, gold, and silver. In addition, the convergence of commodity fundamentals and district-scale exploration provide a solid foundation for additional value creation beyond the current plan. High-grade, capital-efficient projects with approvals in place like Jervois are rare, and we are ideally timed to benefit from the looming supply gap. Probably what everyone really did want to get on to, how are we going to finance this thing? The funding process to date has involved extensive investor engagement and numerous parties in their due diligence process. The process has distilled over several funding options and combinations. KGL value is in its mineral resource and with the support of shareholders and the capability of the management team and, importantly, contracting partners to deliver a high-grade project that is low capital intensity and cost-effectively on time.
Over this period, we've engaged both traditional and non-traditional lenders to come up with funding options that suit our profile. These options are being assessed on evaluation criteria, including execution risk, timing, cost of capital, covenants, repayment profile, scalability, dilution impact, NAV per share, return on investment, return on equity. There are many parameters that we look at as we compare the various options that are sitting in front of us. Our gold and silver by-products provide KGL with a unique opportunity to consider streaming arrangements whilst preserving the copper value upside. We are at the stage in our process where we have a number of what we consider attractive offers that we are shortlisting and will be progressing the best of these in the near term. A corporate snapshot. Since last AGM in 2024, our share price has increased by about 90%.
We've been able to restructure our register of shareholders. This commenced in August with RCF coming on to the register and further progressed by adding sophisticated and institutional investors from the share placement earlier this month. Geographically, we see increased interest offshore. What we're seeing is essentially between 2024 AGM and where we are today, the Australian component has reduced. A lot of that is Denis selling his shares to RCF. We're seeing the Asian component increasing, and that's really institutional and sophisticated investors. KMP did not participate in the placement, so that was a reduction of the Asian percentage, but it's been offset by significantly other interests. Europe has gone up with the introduction of a significant shareholder. North America, obviously, most of North America is really the RCF impact. It is becoming offshore interesting to a lot of investors offshore.
The reason for that really is there aren't very many projects globally that have all the characteristics of KGL and the attraction of investing in a country like Australia. It's to be expected, I guess, from my point of view. In my view, the restructuring that's occurred has been positive for KGL and our current shareholders, and it is a recognition of the inherent value of KGL and improves our position to deliver the overall project funding package. I'll leave you with my current belief that the next share price catalyst will be locking in the major funding for the project. With that, I'll make some—hang on, I've got to find the right—I'm sure you all want to read that, and you want to interrogate that and that, and thank you. I'll make some closing remarks.
I want to thank the Jervois stakeholders in particular, the Central Land Council, Bonya Community, Lucy Creek, and Jervois Station Pastoralists, the broader NT, and Australian. Framework with detailed position descriptions to find responsibilities across the integrated team and a transparent structure that scales efficiently whilst maintaining strong governance. The IoT under the leadership of Konrad really covers seven key areas, and they are scope, project execution and risk, project controls, commercial, health, safety, environment, and quality, permitting and approvals, engagement, mining, and then the seventh one is construction. Construction includes site controls, non-process, civil and support services, and process plant. Our phase two enabling works has been populated following the placement capital raise that we did. We have 21 positions in the structure. We have identified 18 of those of the incumbents to fill the structure.
We've onboarded half of those people, and we'll continue to onboard those people after Christmas and New Year as we head towards delivering the outcomes for an FID whilst we progress the funding in parallel. We then move into a phase three structure, which really is a post-FID construction delivery phase. There's probably another 15 positions that come in there under those seven areas and really focus then on getting the rubber on the road in terms of the construction process going forward. We've identified, again, a number of people to fill those roles, but we won't be employing them until the time's right. The second question is about contracted works and alignment. KGL's contracting strategy is to build around partnering with tier one, tier two delivery partners for major packages supported by local industry engagement whilst retaining strong owner governance.
The IoT is—sorry, integrated owners team, use the full name—is preparing contract models that really allocate the risk appropriately, incentivize performance, and are looking to have transparent cost structures and performance milestones. The IoT also provides clear leadership, rigorous pre-qualification, and embedded site HSEQ, and finally provides ongoing performance monitoring via reports, dashboards, lead indicators, joint risk registers. Our overarching objective is a consistent, aligned delivery environment commercially, culturally, and operationally to protect the project's value and ensure a safe, efficient path to production. Now, what I've just summed up is probably a conversation that you could have over the next four to five hours.
Really, with the integrated team and with Konrad's drive, I think we're very well positioned to stage our development as we go through the gates that we need to go to in terms of project definition, funding, financial investment decision, and then getting on the ground. That were the two questions that I had. I do not know if anyone's got other questions, but happy to—yes, Tom.
Can you just give us a broad outline of program to commission?
Program to commissioning? sure. Yeah. This phase that we're going through at the moment is the detailed engineering. It's the enabling works. The enabling works include long lead items, some of the critical designs for water, power, accommodation. It's all the services that are going to support when the construction people hit the site, they've got somewhere to stay.
They've got the water they need to do the construction. They've got the power to deliver it, and they've got a fly-in, fly-out mechanism to do that. Enabling works to us is all about enabling the construction. In the meantime, our major contractors, we went out to tender for the open cut. We're working through the tender proposals there. We're also working with our infrastructure provider primarily for the plant in terms of the final engineering, the vendor data. There's a long list, Tom, of all the things. All of that happens now in the enabling phase. There's a second enabling phase after we hit FID, which is when we start spending money on site to put those things in place before contractors arrive.
Do you have an overall view of the program? Are you looking at a mid-2027 plant?
Yeah. Where we are at the moment is our timetable is really to commence construction in 2026, about mid-2026. That'll deliver the plant in the second half of 2027. We think it'll be commissioned by the end of 2027. We're then talking about the ramp-up from that point to bring us to full production. The schedule's very, very similar to what the feasibility study said. It's just shifted in time a little bit based on the funding requirements.
Can I ask you a question about the financing?
Yeah.
Obviously, this has cost a lot of money to do all this, and we don't have it. What would be the deal for the financing? Obviously, we can't secure it because what we have is not going to secure the sort of money that we need to borrow. Can you give us a rundown on how we intend to finance this thing?
Yeah. We've started a financing process, and as I mentioned, we've got advisors in place that are helping us do that. We've had enormous interest. I mean, you mentioned you can't finance it. We've had enormous interest. We've engaged with 30-40 parties. We have signed NDAs with a significant number of those. A number of those have participated in the data room at the moment, and a number of them have already provided non-binding indicative offers, which we are going through. The range that we're seeing, traditional debt or some of the non-traditional areas, is debt funding between 50%-70%. Obviously, different conditions, which is why I mentioned the assessment criteria. Some are lower cost with different covenants. Some are higher cost with different covenants or no covenants.
Suffice to say, if we go down the path of maximizing the debt, we minimize the equity raise. If we go down the path of a 50% debt, then we've got a pretty big step for the equity raise. We are going through this process at the moment of balancing all that. That is why I said those parameters such as execution risk, timing, return on equity, what is the NAV per share? If we have a big equity raise, the NAV per share goes down. It is balancing all of those things. If we can achieve the debt financing in the first instance, which is what we are targeting to do, then the clarity about how we raise the equity. When I talk about raising equity, what we have now is we had really one cornerstone investor, KMP, and they have been supportive the whole way through.
RCF has now joined the register. We've had a number of other people, as I said, interested from Europe and Asia. We're starting to see momentum there where people are talking about this project because fundamentally, what other projects can they invest in? Most of them are held by majors. There is a lot of interest starting to mount with KGL. I think we can fund it. It's about picking what's the best funding stack because we need to understand the impacts on existing shareholders, on costs going forward, and some of the risks associated with the various packages. Does that answer your question? Yeah.
Thank you.
Any other questions? When would you think that you'd have an answer? When would I? I would have liked it last week, but it doesn't happen like that. It doesn't really depend on what I like.
We're just working through the process at the moment. I mean, there are a number of people that are proposing these packages, and we're comparing, we're analyzing, we're doing all these sorts of things. We're looking at the terms. We're talking to them about their terms to clearly understand how they come together. I'm hoping that we can move forward. The critical path right now is we need to get the project ready to deliver. We need to get the funding in place to deliver, and the board needs to make a decision, a financial investment decision to go. They are the three things that we're focused on at the moment. You could assume that, and somebody else could assume something else. I mean, I really can't stand here and give you that prediction.
The only thing I can tell you is that our timetables are all about trying to accelerate this as fast as we can if we can get the right funding package. It's not about at all costs. It's about getting the right stack together, getting the right project together, getting the right team together, and delivering. I can't answer your question. I didn't.
Can you give us an idea of what the NPV is at the block prices today?
The slide I put up before, it's very similar to where we were saying the incentive prices are. The reason I mentioned before that I saw that we had a feasibility study that talked about AUD 400 million, AUD 405 million NPV, an incentive pricing that was nudging AUD 700 million without silver and gold.
I'm still convinced that, well, my prediction is that we're building a company that's got to be worth somewhere between AUD 700 million and AUD 1 billion. That's our objective. We've got to get into production, and we've got to see what all analysts are predicting, which is that supply gap. The supply gap, I think we're starting to see it come through at the moment. If China comes back into the market, their growth, their economic growth, I think all those predictions are going to be conservative. All good. Yeah.
I've been to a few of these meetings. We're all about the support of friendly. Today is the best news I've heard in some time. Really good to hear that we're making some progress.
Yeah. The team has done a great job. I mean, seriously, they've really worked hard.
We've had limited resources to do it, but focus on the right things and get them done means you can move forward. I can only thank the team for all the effort that they put in and the shareholders for continuing to support us. How good's that? All I can say is that going forward, let's enjoy the ride. Thanks very much, everybody. Yeah, we'll keep you informed as we move forward. Thank you.