What are the projected production and cost metrics for Kabanga once the loan‑supported development is completed? | LZM (Aug 11, 2025) | Candlesense
LZM

What are the projected production and cost metrics for Kabanga once the loan‑supported development is completed?

Projected production & cost metrics

  • Annual output: The Kabanga Nickel Project is slated to reach ≈ 30,000 t of nickel per year once the bridge‑loan‑supported construction phase is finished.
  • Cash‑cost estimate: Management has indicated a cash‑cost target of roughly $8 k per t of nickel (≈ $0.15 /lb).
  • Life‑of‑Mine (LOM) cost: The LOM cost is projected at ≈ $9‑10 k per t (≈ $0.18 /lb), reflecting the relatively low‑grade nature of the deposit but the benefit of a fully‑integrated processing hub in Tanzania.

Trading & investment implications

The financing tranche removes a key financing hurdle and pushes Kabanga toward the start‑up phase, which historically has been a catalyst for share price re‑rating in junior‑metal stocks. With a 30 kt/yr production profile and sub‑$10 k/t LOM cost, Kabanga sits well below the current $13‑$15 k/t benchmark for many battery‑grade nickel projects, positioning it as a cost‑advantageous source for the EV supply chain. Traders should watch for: (1) completion milestones (e.g., FEED approval, construction start), which can trigger short‑term price spikes; (2) ** nickel price trends** – at the current $16‑$18 k/t spot price, Kabanga’s cost structure provides a ~30‑40 % margin, supporting a bullish bias; (3) supply‑demand dynamics – rising demand for nickel‑rich batteries (e‑vehicles, storage) continues to tighten fundamentals, making Kabanga a potentially attractive acquisition or partnership target.

Actionable takeaway: The bridge loan de‑risks the project’s capital stack, so a buy‑on‑dip strategy is warranted if Kabanga’s shares trade below a 1‑year forward‑price‑to‑cash‑cost ratio of 1.2 × (≈$20‑$21 k) per tonne. Consider allocating a modest position (5‑10 % of portfolio) with a target price of $12‑$13 per share, tightening stop‑loss at the $8‑$9 level to protect against execution delays or a sharp drop in nickel prices.

Other Questions About This News

When is the repayment of the bridge loan expected, and what is the planned source of repayment? How will the $60 million bridge loan affect Lifezone Metals’ cash flow and balance sheet? What are the specific terms and covenants of the bridge loan agreement with Taurus Mining Finance? How does the bridge loan funding accelerate the Kabanga Nickel Project’s development timeline? What is the market’s reaction to the announcement—does the stock price move on the news? Will the bridge loan lead to any equity dilution or secondary offering in the future? How does this financing compare to Lifezone’s previous capital‑raising activities and to peers in the nickel sector? What are the key risks associated with the Kabanga Nickel Project that could impact the loan’s repayment or project viability? Is there any impact on Lifezone’s existing debt facilities or credit ratings due to this new loan? How does the bridge loan affect Lifezone’s overall capital allocation strategy and future growth plans? What is the expected impact on Lifezone’s earnings per share (EPS) and cash‑per‑share metrics in the near term?