Why are shares in this ASX copper developer surging more than 45%?

Shares in KGL Resources Ltd (ASX: KGL) have soared more than 45% after the copper and gold project developer said it had secured a US$300 million funding package towards the construction of its Jervois project in the Northern Territory.

Major partner brought on

The company said in a statement to the ASX on Thursday that it had entered into a precious metals purchase agreement with Wheaton Precious Metals Corp, which will, in part, fund the construction and development of KGL’s mining project.

The funding agreement provides US$275 million as an upfront consideration and US$25 million as a contingent cost overrun.

The main lump sum will be provided as US$32 million available prior to any construction expenditure, and US$243 million available in four tranches following the achievement of certain construction milestones.

The company said regarding the agreement:

With the necessary development and mining permits in place, the precious metals purchasing agreement represents a major step forward towards development of the Project, positioning KGL to become the next meaningful Australian copper producer. This is Wheaton’s first streaming transaction in Australia and follows Wheaton’s entry into a streaming agreement in respect of BHP’s portion of the Antamina mine, announced in February 2026.

The company added that work on progressing towards mining was ongoing.

KGL is in the process of finalising the scope and cost of the process plant construction contract, updating the production schedule, providing for price escalation (where applicable) and incorporating changes resulting from movements in commodity prices. KGL expects its review of these items (which remains ongoing) to result in changes to the technical and economic framework for Project delivery, as set out in the 2025 Feasibility Study Update (announced 10 February 2025). Specifically, KGL expects both overall Project capital costs and revenue forecasts to increase. KGL’s expects to be able to provide an update by May 2026.

KGL said it remained in active dialogue with global metals traders and potential offtake partners, “as well as other capital providers and arrangers to finalise the full funding of the Project”.

Further equity raise potential

The company said that, in addition to the US$300 million funding package, Wheaton had also agreed to participate in any future equity raise to fund the Jervois mine.

KGL Chief Executive Officer Sam Strohmayr said regarding the new deal:

This is an exciting and significant milestone for KGL which supports the next phases of advancing the Jervois project towards production. The near-term availability of the early deposit ensures we can maintain our development schedule, and we are now on the cusp of breaking ground on Australia’s next major copper mine.

KGL shares were 45.2% higher at 30.5 cents in early trade.

The company was valued at $162 million at Wednesday’s close.

The post Why are shares in this ASX copper developer surging more than 45%? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.