K2fly general meeting backs company’s ESG growth plans with green light for Decipher acquisition

K2fly Ltd (ASX:K2F) shareholders have today given the green light at a general meeting for the company's acquisition of the ‘Decipher for Mining’ business from CSBP Limited, a subsidiary of Wesfarmers Ltd (ASX:WES) (OTCMKTS:WFAFF) (FRA:WF3). In addressing shareholders, chair Jenny Cutri said: “The Decipher business provides cloud-based software-as-a-service technology and compliance solutions for mining industry customers, including in relation to rehabilitation and closure, tailings governance and monitoring and tailings disclosure database solution. “The acquisition of the Decipher for Mining business fits within K2F’s strategy of acquiring complementary adjacent products and expanding our offerings/solution portfolio to existing and prospective customers.” Industry tailings standard solution  Cutri said: “By acquiring Decipher for Mining, K2fly will have the only end-to-end solution in the market today that can cover monitoring, disclosure and governance in support of the Global Industry Tailings Standard (GITS), at a time when the industry most needs it.  “We have already been working closely with the team at Decipher, as part of our previously announced partnership, to develop a software solution for the monitoring, disclosure and governance of tailings storage facilities (TSF).”  All resolutions at the general meeting were passed, with K2F now set to issue 11,366,691 fully paid ordinary shares to CSBP (consideration shares), valued at $3.7 million, and 5,345,633 performance shares. CSBP will then become K2F’s largest shareholder with a 10.13% holding.  Global ESG trends The company notes recent traction in this space, with GITS formally endorsed by the co-convenors of the Global Tailings Review - the International Council on Mining and Metals (ICMM), the UN Environment Program (UNEP), and the Principles on Responsible Investment (PRI). In addition, in December the Church of England Pensions Board and the Council on Ethics of the Swedish National Pension Funds wrote to over 350 mining companies on behalf of investors with $21 trillion in assets under management (AUM), asking them to confirm on their company websites their support for the standard and to set out a timeline for their intended compliance with it.  This take-up at the company level of the standard beyond the largest mining companies will be key to its success.  Cutri said: “Consequently, and with the increasing general awareness and demands for environmental, social and governance (ESG) outcomes, K2F has seen a definite increase in inquiry and more importantly budget being released to fulfill the commitments made by mining companies in relation to TSF.”   Infoscope cultural heritage management In Q3 FY21, Infoscope Heritage was adopted by Rio Tinto Limited (ASX:RIO) (OTCMKTS:RTNTF) (FRA:CRA1) Iron Ore Operations in the Pilbara of Western Australia for its cultural heritage management.  In a second project working directly with traditional owners in conjunction with Griffith University, Infoscope will be used to map and record ancient cultural heritage sites in Cape York.  This project will also see the company working with Griffith University’s partners along with long term partners, The Keeping Place.  RCubed US market Cutri said: “In terms of our RCubed Mineral Inventory reporting system we contracted with two new US-based customers, Alcoa USA Corp (NYSE:AA) (FRA:185) (BMV:AA1) (VIE:ALCA) and Coeur Mining Inc. (NYSE:CDE) (FRA:CDM1) (BMV:CDE).   “As always with RCubed these are global corporate deals and are also a testament to our investment in the Americas region.  “We continue to dominate this market as the only COTS.  “So that we can further lead and dominate this market, we are now investing in the next generation of this product and building a seamless integration with the Block Model Management (BMM) tool from SATEVA.”  Sateva purchase orders SATEVA continues to grow from strength to strength, and in January the company received over $850,000 in purchase orders in less than 3 months after acquisition.  Purchaser orders have since grown to $1.2 million.  Invoicing update supports acquisition strategy Q3 FY21 is shaping to be a positive quarter for the company with invoicing totalling around $2 million.  In the previous corresponding period of Q3 FY20 K2F invoiced $1.61 million – the company’s previous largest invoicing quarter was Q4 FY20, with invoicing totalling $1.9 million.  Cutri said: “This performance underscores the board’s view that the acquisition strategy (of which Decipher for Mining is a key element) is demonstrating rapid value-add to the company: enabling the company to take advantage of global ESG reporting trends.  “Our plan to deliver new software products and solutions to market (such as BMM and if approved by shareholders, Decipher for Mining) is progressing well and we should see further fruits of our investments in Q4 FY21 and beyond.”