K2fly Ltd (ASX:K2F) has inked a five-year contract with Alcoa (NYSE:AA) USA Corp to provide stage one of a dam and tailings management solution, set to roll out to seven sites globally from August.
The annual recurring revenue (ARR) from the deal is initially capped at $180,000 per annum, covering all seven sites, however, it is expected this will grow to $250,000 in the fifth year, with potential for additional Alcoa sites to be added in the future.
This contract, along with previously announced contracts and purchase orders, demonstrates increasing demand for K2fly’s tailings solution following the acquisition of Decipher for Mining in March 2021.
As more companies commit to the Global Industry Standard on Tailings Management (GISTM), K2fly expects to see continued growth in this solution.
“Proud” to expand on relationship with Alcoa
K2F chief commercial officer Nic Pollock said: “We are proud to be expanding our relationship with Alcoa to deliver a second solution that contributes to Alcoa’s ESG commitments around Tailings.”
All 28 members of the International Council on Mining and Metals (ICMM) – an organisation dedicated to a safe, fair and sustainable mining and metals industry, are committed to this standard.
Companies that commit to the standard are expected to have solutions in place by August 2023.
Alcoa is the third member of the ICMM to commit to the K2fly Dams Tailings solution and K2F is cautiously optimistic that the solution developed with Decipher for Mining to meet these newly agreed standards will be a significant contributor in this arena.
Record June quarter
Today's contract comes after K2fly achieved another record invoicing quarter. The ASX-lister raised invoices for A$2.54 million in the June quarter, up from 34% from A$1.9 million in the previous corresponding period.
For the 2021 financial year, the company tabled invoices of A$7.8 million, an 18% increase from the A$6.6 million in FY20.
Annual recurring revenue (ARR) stood at A$3.38 million, up 50% from the fourth quarter of 2020.
As of June 30, 2021, the cash available was A$6.90 million and there was A$2.13 million in receivables, predominantly from Tier 1 clients.
Total contract value in the fourth quarter rose by 48% to $9.9 million from the corresponding quarter in 2020, while K2F has no debt.