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    Dec.Gold Mines

    512068
    Metals & Mining·25 Nov 2025
    Management Summary

    Deccan Gold Mines Limited reported significant progress in Q2 FY26, with the successful commissioning of the Jonnagiri plant and imminent trial production at the Kyrgyzstan project. The company outlined ambitious production targets for both gold mines and its critical mineral projects in Mozambique, Finland, and Bhalukona. A rights issue of ₹315 crores is planned to clear existing debt of approximately ₹200 crores, aiming for a debt-free status by year-end 2025, with remaining funds allocated to exploration and potential acquisitions.

    Highlights

    7

    • Jonnagiri plant commissioning successfully completed, full-scale production underway with initial forecast of 400 kg/year, eventually targeting 800 kg/year.

    • Kyrgyzstan project's trial production is set to begin within a couple of weeks, with an annual production target of 350 kg by FY27, peaking at 800 kg.

    • Company aims to become debt-free by the end of 2025, with a planned rights issue of ₹315 crores primarily for debt repayment.

    • Discovered nickel-copper-PGM mineralization in Bhalukona, with drilling planned from January onwards.

    • Lithium and copper-gold exploration in Mozambique showing strong evidence of mineralization, with drilling for both planned from January onwards.

    • Overall EBITDA margins are projected to be 70-75%, with Kyrgyzstan PAT at 35-40% and Jonnagiri EBITDA at 75%.

    • Total gold production (Deccan's share) is targeted at around 2 tons, with an additional 2.5-3 tons from other critical minerals, totaling 5-5.5 tons.

    Concerns

    2

    • Dilution of shareholder value

    • Legal and regulatory impasse for Ganajur/Hatti

    Key financials

    Single quarter

    05 metrics
    1. 01Market Capitalization₹2,000 Cr
    2. 02Altyn Tor AISC1,045 USD per ounce
    3. 03EBITDA Margin (Overall)70%
    4. 04PAT (Kyrgyzstan)35%
    5. 05EBITDA (Jonnagiri)75%

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹315 crores

    Primarily through rights issue

    Debt

    Gross ₹200 crores

    Cost 12.0%

    M&A

    One or two projects

    acquisition · announced

    Guidance & targets

    17
    CategoryTargetPriority
    Production Volume
    Altyn Tor Gold Production
    350 kg
    		High
    Production Volume
    Altyn Tor Gold Production (Peak Potential)
    800 kg
    		Medium
    Production Volume
    Jonnagiri Gold Production (Initial Forecast)
    400 kg
    		High
    Production Volume
    Jonnagiri Gold Production
    500 kg
    		High
    Production Volume
    Jonnagiri Gold Production (Next FY)
    400 kg
    		High
    Production Volume
    Finland Gold Production
    276 kg
    		High
    Production Start
    Finland Mine Operation
    2029
    		High
    Production Start
    Mozambique Lithium/Tantalum Production
    Next year
    		Medium
    Production Start
    Mozambique Small Scale Operation
    Very likely next year
    		Medium
    Production Start
    Finland Full-fledged Underground Mining
    Next two to three years
    		Medium
    Debt
    Debt-free status
    Debt-free
    		High
    ESG
    ESG Compliance
    Completely ESG compliant
    		High
    Shareholder Engagement
    Physical AGMs
    100% physical AGMs
    		High
    Strategic Vision
    Company Status
    Mid-tier gold producer and critical mineral supplier
    		High
    Resource Potential
    Deccan's Share of Gold Production
    2 tons
    		Medium
    Resource Potential
    Deccan's Share of Gold Equivalent Production
    5-5.5 tons
    		Medium
    Mine Life
    Altyn Tor Mine Life (Underground)
    15 years
    		Medium

    Kyrgyzstan Trial Production Start

    within a couple of weeks
    CurrentFinal preparations underway
    TargetTrial production commenced

    Why it matters

    This marks the beginning of revenue generation from a major project and will validate management's timelines.

    We have set up everything, and within a couple of weeks, you will see that the trial production is underway.

    How to verify

    guidance_and_targets[category='Production Start'][metric='Kyrgyzstan Trial Production']

    Risks & concerns

    5
    RiskSeverity

    Production timeline delays

    Initial delays in Jonnagiri and Kyrgyzstan projects due to approvals and mobilization. — Management acknowledged

    medium

    Funding availability for new projects

    Difficulty in raising debt funding from banks/institutions due to lack of track record and collateral. — Management acknowledged

    medium

    Dilution of shareholder value

    Concerns raised by shareholders regarding continuous equity dilution and reduction of stake in key projects like Jonnagiri. — Analyst downplayed

    high

    Legal and regulatory impasse for Ganajur/Hatti

    The projects are under legal and regulatory challenges related to the 10A(2)(b) policy. — Analyst acknowledged

    high

    Environmental approvals for Finland project

    Environmental approvals for Finland's Kuikka gold project are in progress, delaying trial mine start. — Management acknowledged

    medium

    Q&A highlights

    8

    “Hanuma, thank you for your answers to my query, but a few things were like. not straightforward to be honest when I asked why we did not raise funds for Jonnagiri earlier and you said that we might have not come to the investors again and we went to the whole world asking the money if you would have come to us two years ago or one year ago we would have given the money as we did 10 years ago this is my submission, all the minority shareholders were ready. We reduced our Jonnagiri stake to 27% from 42%. I know we were never allowed to be a major shareholder but every percentage increases the value of our company. We could have monetized that. One of my query was, it is now second, that do we have any plans to monetize our 27% stake in Jonnagiri so that we can use that money to mine, explore and built new assets which we own as majority shareholders that has not been answered that timing of the right issue there is no point in debating that you have answered all the queries but we still have our doubts we see there are ulterior motives there is ulterior motive of bringing someone back door, I submit that I can write it, I can write it to any damn authority in the world and it will prove I would not be proved wrong in the due course and Kyrgyzstan you have production you have answered and you have answered any plan in change promoter and all the that kind of answer but we were coming for this thing or that thing then we were flying the drones in Dubai we were doing all the wasting our money on in all those things and today we are not discussing all those. We would have used that money for Jonnagiri. You we would have asked money from the shareholders. We were ready to give. Today also we are ready to give the money. But I will again submit that the timing of the right issue is 100% wrong. It is 100,000% wrong. You said that it is for clearing the debt. We could have cleared the debt one month after the announcement of the Kyrgyzstan and Jonnagiri. It was supposed to be announced around Diwali. Okay, Diwali has gone. It might be before Christmas. The right issue could have come in January. The world is not going to fall in two months. The debt is not going to increase from Rs.200 Crores to Rs.2,000 Crores or Rs.200,000 Crores in two months. The timing of the right issue is wrong. I am again telling you. And in your representation, there is no timeline given for Bhalukona which is our 100% this thing and one major thing which you missed, I never said that to Hira, the mines. I am talking about the Bhalukona. It has been transferred into some private limited company again. Then you will take the debt. Then again, you will submit or surrender it to Hira. This is what I feel. I am in pain. I am a shareholder for last 15 plus years. I am seeing ups and downs. I have attended all the AGMs almost and interacted with so many of you guys. All of you guys arranged visit Supreme Court hearing and everything arranged Amitabh Kant, this thing, meetings also in Delhi, but we are being sidelined, to be honest. We shareholders who are sticking with company for last 15 years”

    Analyst strongly challenged management's rationale for rights issue timing, stake dilution in Jonnagiri, and perceived delays/mismanagement of funds, indicating significant shareholder dissatisfaction.

    asked by Imran Ghani

    2 min read6 chapters

    Detailed Narrative

    01

    Jonnagiri and Kyrgyzstan Project Progress

    Deccan Gold Mines has successfully commissioned its Jonnagiri plant, with all trials completed and full-scale production commencing. The initial production forecast for Jonnagiri is 400 kg per year, expected to eventually reach 800 kg per year. For the Kyrgyzstan project (Altyn Tor), trial production is set to begin within weeks, targeting 350 kg annually by FY27 and a peak potential of 800 kg. Management emphasized that these two projects are crucial for driving company growth and revenue.

    02

    Critical Mineral Exploration and Development

    The company has made significant strides in critical mineral exploration. In Bhalukona, a nickel-copper-PGM mineralization has been discovered, with drilling scheduled to start in January. In Mozambique, strong evidence of copper-gold mineralization has been found, and drilling for both lithium/tantalum and copper-gold is planned from January onwards. The Mozambique lithium project aims to establish a 100 ton per day processing facility and begin production of lithium and tantalum concentrates next year (2026).

    03

    Rights Issue and Debt Reduction Strategy

    Deccan Gold plans to raise approximately ₹315 crores through a rights issue, primarily to repay its existing debt of about ₹200 crores. The goal is to become a debt-free entity by the end of 2025. The remaining funds from the rights issue will be allocated to initial stage exploration, drilling programs, and potential acquisitions of new projects. The company's current debt, including that from Hira Group, is around ₹200 crores, with a cost of debt at approximately 12%.

    04

    Long-Term Vision and Resource Potential

    Deccan Gold aims to become a mid-tier gold producer and a supplier of critical minerals by 2030. The company projects its share of gold production to reach around 2 tons, with an additional 2.5-3 tons from other critical minerals (nickel, copper, lithium), totaling 5-5.5 tons of gold equivalent. The Altyn Tor mine life is expected to extend to at least 15 years with underground operations, significantly longer than the initial 6-year estimate for the first stadium project.

    05

    Shareholding and Project Prioritization

    Management addressed concerns about the reduction of Deccan Gold's stake in the Jonnagiri project from 42% to 27%. This was attributed to prioritizing investments in the Kyrgyzstan project, where Deccan holds a controlling 60% stake, to ensure a major shareholder position. While ₹40 crores were invested in Jonnagiri, ₹140-150 crores were invested in Kyrgyzstan, reflecting a strategic shift towards projects with majority ownership and higher control.

    06

    ESG Commitment and Shareholder Engagement

    Deccan Gold reiterated its commitment to ESG standards, aiming for complete ESG compliance from next year onwards. The company also announced plans to hold 100% physical Annual General Meetings (AGMs) from next year, addressing shareholder requests for more direct engagement. Management acknowledged past delays in communication but pledged to improve regular investor relations calls and information dissemination.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.