Perth-based technology company K2Fly (ASX: K2F) has inked a $1.45 million deal with mining giant Rio Tinto (ASX: RIO) to implement its RCubed mineral resource and reserve reporting software across 20 sites globally.
The total contract value includes the initial implementation fees and annual software subscriptions for a five-year term.
The RCubed software will replace Rio’s inhouse system and assist the mining major in providing mineral resources and ore reserves reporting and governance for its shareholders and regulators.
K2Fly chief executive officer Brian Miller told Small Caps that implementation would commence immediately.
“There’s a project team already established, and they’ll be going forward with it now,” he said.
While K2Fly boasts a client base including mining majors such Glencore and AngloGold Ashanti (ASX: AGG), Mr Miller said the deal with Rio is a significant milestone as it is the first major that has signed up for five years.
K2Fly chief commercial officer Nic Pollock said the contract is “further recognition from a tier one miner that our RCubed solution represents the most compelling offering in resource governance solutions”.
K2Fly’s RCubed software generates resource and reserves reports that support reporting codes such as JORC, NI43101 and SAMREC across the major stock exchanges in Australia, New York, London, Toronto and Johannesburg.
Mr Miller said the product helps mining companies report “in an auditable and professional manner” by ensuring they are conforming to the latest legislation.
K2Fly purchased the software from South African company Prodmark in May, with the acquisition bringing major mining companies Anglo Gold Ashanti and Canada’s Teck Resources as customers.
This latest contract with Rio follows the recent signing of RCubed subscriptions with Australian gold miner Newcrest Mining (ASX: NCM) in September and Brazilian zinc and copper miner Nexa Resources in October.
A growing sector
The Rio deal also further increases the strong annual recurring revenue (ARR) growth that K2Fly’s Software-as-a-service (SaaS) business is experiencing.
According to its September quarter report, ARR from software subscriptions grew by 27% during the quarter, amounting to a compound annual growth rate of 150%.
The company also re-sells other software products and provides consultancy services.
However, Mr Miller said it was clear that SaaS is growing at the moment.
“Since we acquired the RCubed solution in May, we’ve sold it to Imerys in France, Glencore in Canada, Nexa Resources in Brazil, Newcrest Mining [in Australia] and now Rio. It’s very much becoming a global solution,” he said.