South32 ticks off K2fly mining software with 5 year contract

ASX-listed mining ‘software-as-a-service’ provider, K2fly, continues to build the annual recurrent revenue stream from its software contracts which hit A$2.2m this quarter after mega miner, South32, locked in a 5-year contract for its “RCubed” mineral resource governance software.  The company said its total contracted value for all multi-year contracts has now jumped 45% to nearly A$7m..

South32 was spun out of BHP in 2015 and it operates much of BHP’s former non-iron ore mining projects. Its presence on the K2Fly client list is a significant boost for the $19m market capped Perth-based technology player who has managed to entice a rolled gold list of major miners to use its software in the last 12 months.

According to K2Fly, the total 5 year value of the South32 contract is around A$880,000 with Sout32 planning to immediately implement K2Fly’s RCubed software immediately across its nineteen global operational sites.

The company said its average client contract term was now greater than three years, providing some evidence that the market is becoming comfortable with the product.

K2Fly has outperformed its own strategic targets by continuing to build its stocks of new and extended 3-year and 5-year contracts for RCubed with multi-year contracts now locked in with many of the world’s top ten miners, including Kinross, Newcrest, Anglo Gold Ashanti and Gold Fields.

RCubed is a governance solution for mineral inventory reporting that boasts suitability for companies reporting to the ASX, TSX and NYSE, all jurisdictions that mandate the reporting of resources and reserves.  

The company also recently scored a 3-year contract with one of Europe’s largest materials companies, Belgium-based Sibelco.

Sibelco is a global materials solutions company that has supplied silica sands to Belgium’s major glass producers for a century and a half and it also has a connection to Europe’s clay industry that stretches back over 300 years.

K2fly Chief Commercial Officer, Nic Pollock said: “It is a great honour to be working with South32. This adds to our growing list of diversified customers like Rio Tinto, Teck Resources and Nexa Resources.”

The first major milestone for technology companies is always the achievement of a break even position from a cash flow perspective and some never achieve it – With the major’s seemingly stampeding towards K2Fly’s software, it looks like K2Fly will be one technology company that should not have too much trouble achieving breakeven and beyond.

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