K2fly Ltd's (ASX:K2F) acquisition of SATEVA mine geology applications is exceeding expectations and is tracking ahead of target moving into 2021.
In the less than three months since the acquisition was completed, K2fly has received more than $850,000 of new purchase orders from major mining houses in the iron ore sector - compared to total SATEVA revenue of $1.4 million in FY20.
The SATEVA acquisition and its associated intellectual property brings the company a suite of mine geology applications for mining companies around orebody knowledge and control which is relevant to K2fly’s existing global client base and can be integrated with existing mineral inventory solutions for deeper technical assurance.
“Opportunities to service iron ore producers”
SATEVA’s customers are predominantly in iron ore (FMG, Rio Tinto and Roy Hill) and are currently enjoying particularly buoyant prices for that commodity.
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 Western Australia.”
The strategy behind the acquisition was to maintain and develop the SATEVA consulting business and its customers and to convert IP from consulting work into repeatable software solutions and recurring revenue streams.
Pollock said: “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.”
The suite of products includes Model Manager, a high-performance storage and analytics solution which provides improved block model management, and a direct line of sight and governance from the block model to the annual inventory report and integrates directly with the company’s RCubed Mineral Inventory solution.
Model Manager has been launched and K2fly is sharing this with existing clients and prospects of its mineral inventory solution.
Automated ore blocker trial
The Maximum Return Mine Geology System (in production at Roy Hill) has now been recommended for use in a tier-1 iron ore mining company.
Automated Ore Blocker is an automated ore block-out solution integrated into SATEVA Maximum Return and this has just passed trials at a major iron ore producer and will go into production this quarter.
The results from this trial will be able to be shared with the company’s global mining customers from February onwards and although no contracts have been signed, K2fly is in negotiation with two major mining companies and expect the list of clients to grow rapidly.