ASX-listed K2fly’s timing in buying the SATEVA software service business, which caters for iron ore producers, when the iron ore price is flying high has been exquisite with the expanded group already having snared $850,000 worth of new purchase orders from major iron ore mining houses.
The Perth-based company’s $4 million cash-and-scrip acquisition of SATEVA, and its associated intellectual property, less than three months ago has brought to the table a suite of mine geology applications for orebody knowledge and control.
K2fly says the software applications are particularly relevant to its existing global client base and tie in nicely with its resource technical assurance and resource governance software solutions. Its current major SATEVA customers include Fortescue Metals Group, Rio Tinto and Roy Hill.
According to K2fly, a new automated ore block-out solution that has been put through its paces at a major iron ore operation in WA has performed extremely well, exceeding the client’s expectations. The company says it will be in a position to share the results of the trial with its global mining customers from next month.
K2fly Chief Commercial Officer, Nic Pollock said: “We couldn’t be happier with the timing of the SATEVA acquisition and the opportunities it presents for us to better service the global iron ore producers, particularly here in our home patch of WA. The strategy behind the acquisition was to maintain and develop the SATEVA consulting business and its customers (and) convert IP from consulting work into repeatable software solutions and recurring revenue streams.
“With the purchase orders already received we are clearly over-performing on the first element. We are also very pleased at the response of our customers to the new product offerings which are incredibly timely for the iron ore industry, as well as other bulk open pit mining operations like gold and copper.”
SATEVA specialises in building IT applications in fields such as exploration, grade control, planning, ore tracking, inventory management, reconciliation and data management.
It is also in the process of developing a new solution for block modelling that K2fly says will dramatically improve and simplify model management for miners running multiple operations, as well as provide a direct line of sight and governance from the block model to the annual mineral inventory report.
Block models are aggregated to produce annual mineral resources and reserves reports, integrating directly with K2fly’s RCubed resource inventory solution.
K2fly describes the Model Manager product as a disruptive new development in geological and mine planning processes, reporting and analysis. It exploits cloud computing and analytics and leverages what the company calls its leading position in the reporting of mineral resource inventory with mining clients.
Model Manager has now been launched and K2fly says it is in the progress of sharing the bolt-on to existing clients and prospects of its mineral inventory solution.
In addition, integrated into SATEVA’s Maximum Return Mine Geology System is the Automated Ore Blocker product, the automated ore block-out solution that has just passed the trials at a major iron ore producer will flying colours.
K2fly has secured more than $850,000 of new orders since the SATEVA acquisition was finalised in early November, versus SATEVA’s total revenue of $1.4 million in the 2020 financial year.
The move to latch on to SATEVA looks to be on the money for K2fly, with the iron ore price having skyrocketed more than 100 per cent in the past 12 months to a near decade-high of about US$170 a tonne. The outlook for iron ore for the rest of this year also appears bright, with anticipated continuing strong steel demand from China and supply concerns from a COVID-19-ravaged Brazil.
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By Matt Birney
