K2fly Ltd (ASX:K2F) and Newmont Corporation have extended their Resource Governance SaaS contract for five more years, with the extension having a Total Contract Value (TCV) of $1.3 million.
The partnership will now run until March 2028, having been extended from the initial three-year agreement.
K2F will provide RCubed Resource Governance to Newmont mines and joint ventures across global operations through the software as a service (SaaS) model.
K2fly is an ESG compliance solutions company, offering ‘net positive impact’ to operations of mining and asset-intensive industries through the SaaS cloud-based program, Rcubed Governance Solution.
The software is designed to reduce overheads by improving efficiencies and accountability, providing systemised collection of data and centralised reporting of ESG factors.
Strengthens ties with leading gold miner
Newmont is one of the world's largest gold producers, known for its keen focus on ESG and recognised for its efforts in principled environmental, social and governance practices.
Founded in 1921 and publicly trading since 1925, Newmont is the only gold producer listing in the S&P 500 Index, with a large output of copper, silver, zinc and lead on top of gold resources.
K2fly chief executive officer Nic Pollock said, “We are delighted to extend our existing relationship with Newmont, until March 2028.
"This extension of our original agreement from March 2020 with the world’s leading gold company, reaffirms the importance of K2fly’s solutions in helping large resources organisations with their Environmental, Social and Governance (ESG) reporting and aligns with Newmont’s purpose to create value and improve lives through sustainable and responsible mining.”
Full interview: K2fly signs SaaS contract with Newmont to service its global gold operations:
ESG compliance influences confidence
The extended TCV is valued at A$1.3 million and develops an initial three-year agreement signed in 2020 with a TCV of A$900,000.
Research from the University of Rome indicates that “companies highly rated in terms of Environmental, Social, and Governance (ESG) score report higher excess returns and lower volatility”.
In effect, ESG factors tend to be considered by market agents as an indicator of a firm’s financial soundness.
K2fly’s Rcubed Governance Solution will continue to be provided across all of Newmont’s 12 operating mines as well as joint ventures and international projects such as their recent deal with Prodigy Gold NL (ASX:PRX), an agreement valued at $14.5 million.
Read: Prodigy Gold enters $14.5 million Tobruk JV with Newmont
With growing evidence that a focus on ESG factors increases investor confidence and generates equal, if not superior, financial results compared to non-ESG-focused companies and rising interest among investors in investing responsibly, it is likely many of the top-performing companies will continue to invest in ESG solutions.
If K2fly’s quarterly reports are anything to go by, ESG investment by publicly traded companies is certainly growing, raising invoices for A$2.54 million, a 34% increase from the previous quarter. Similarly, the company recorded invoices of A$7.8 million for the 2021 financial year, an 18% increase from FY20.