Deccan Gold Mines Limited — Q2 FY26 earnings call

Call held 20 Nov 2025

Management summary

Deccan Gold Mines Limited's Q2 FY26 Investor Relations call highlighted significant operational progress with the commissioning of the Jonnagiri gold plant and imminent trial production at the Kyrgyzstan project. The company announced a rights issue to raise Rs.315 Crores, primarily to clear its Rs.200 Crores debt and fund critical mineral exploration, aiming for debt-free status. However, the call was marked by strong shareholder concerns regarding project delays, stake dilution in Jonnagiri, and the timing and perceived motives behind the rights issue, alongside ongoing legal challenges for key assets.

Highlights

  • Jonnagiri gold plant successfully commissioned with trials completed, full-scale production on the way.

  • Kyrgyzstan project's final preparations for trial production are underway, expected within a couple of weeks.

  • Discovery of nickel-copper-PGM mineralization in the Bhalukona project, a significant step for future growth.

  • Planned rights issue to raise approximately Rs.315 Crores, primarily to repay Rs.200 Crores of debt.

  • Company aims to become a debt-free entity by the end of 2025 or upon completion of the rights issue.

Concerns

  • Shareholder frustration and strong disagreement regarding the timing and pricing of the rights issue.

  • Concerns raised by shareholders about the dilution of Deccan's stake in the Jonnagiri project from 42% to 27%.

  • Ongoing legal and regulatory impasse for the Ganajur and Hatti licenses, with no clear timeline for resolution.

  • Management unable to provide specific FY27 topline and net profit projections during the call.

What they filed

Q1 FY27: revenue up 57.9%, net profit up 69.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4 1 0 0 3 −16%1 +32%9 +1885%1 +58%
EBITDA-21 -22 -21 -24 -9 +56%-10 +55%-1 +94%-12 +52%
Net profit-68 -25 12 -28 -20 +71%-22 +10%6 −52%-9 +69%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Debt Gross ₹200 Cr Cost 12%
    • Repayment Repayment of existing debt using proceeds from the planned rights issue. ₹200 Cr
    As you all know, we have about Rs.200 Crores of debt on the company for which we have pledged the Geomysore shares. So it is becoming very, very important for us to get rid of the debt. So the entire rights issue is actually focused towards repayment of the debt. Large part of it is going towards repayment of debt. ... And also we got the debt at around 12%, I think.

Guidance & targets

Fundraising

  • Rights Issue Capital Raise Fundraising · Upcoming · High confidence Rs.315 Crores
    So what we are trying to do is raise around Rs.315 Crores worth capital, Rs.315 Crores we wanted to raise.

    — Hanuma Prasad, Managing Director

Debt

  • Debt-Free Status Debt · End of this year / Post Rights Issue · High confidence Debt-free
    If rights issue is the way we are going to take, then we are going to pay all the debts of the company, which will make Deccan as a debt-free entity by the end of this year, or whenever that is done, which is a major step for us moving forward.

    — Hanuma Prasad, Managing Director

Production Volume - Kyrgyzstan Gold

  • Annual Gold Production Production Volume - Kyrgyzstan Gold · FY2027 · High confidence 350 kilos
    annually we will be producing about 350. I think in FY2027, we will reach to 350 kilos.

    — Hanuma Prasad, Managing Director

  • Peak Gold Production Production Volume - Kyrgyzstan Gold · Within 3-4 years · Medium confidence 800 kilos
    And the peak potential for that project is about 800 kilos, but that peak potential will be achieved after three to four years when we get into the underground operation.

    — Hanuma Prasad, Managing Director

Production Volume - Jonnagiri Gold

  • Initial Annual Gold Production Production Volume - Jonnagiri Gold · Per year (initial) · High confidence 400 kilos
    And the initial production forecast is around 400 kilos per year, but eventually it will go to 800 kilos plus almost to a ton, depending on the resource that has been approved.

    — Hanuma Prasad, Managing Director

  • Annual Gold Production Production Volume - Jonnagiri Gold · FY2027 · High confidence 500 kilos
    And in FY2027, it is projected to produce around 500 kilos and from next year onwards, it will increase to 750 kilos.

    — Hanuma Prasad, Managing Director

  • Annual Gold Production Production Volume - Jonnagiri Gold · From next year onwards (post FY27) · High confidence 750 kilos

    — Hanuma Prasad, Managing Director

Production Volume - Finland Gold

  • Annual Gold Production Production Volume - Finland Gold · 2029 · High confidence 276 kilos
    And it will produce around 276 kilos per annum. Initially that is the kind of production, but that will come into the production in the year 2029, that is FY.

    — Hanuma Prasad, Managing Director

Total Gold Production (Deccan's Share)

  • Gold Production Total Gold Production (Deccan's Share) · Next few years · Medium confidence 2 tons
    Here I have shown essentially only the gold we would reach to a point of around 2 tons of gold production as our share, so that is what it is looking like.

    — Hanuma Prasad, Managing Director

Cost of Production - Kyrgyzstan Gold

  • All-in Sustaining Cost (AISC) Cost of Production - Kyrgyzstan Gold · Lifetime · High confidence $1,045 per ounce
    And the all-in sustaining cost is about $1,000 per ounce. It is not ton actually, it is per ounce. Per ounce, the cost would be $1,045.

    — Hanuma Prasad, Managing Director

Resource Base - Kyrgyzstan Gold

  • Proven Resource Resource Base - Kyrgyzstan Gold · Very soon · High confidence More than 8 tons
    We are going to increase the resource base to more than 8 tons very soon.

    — Hanuma Prasad, Managing Director

Resource Base - Jonnagiri Gold

  • Potential Resource Resource Base - Jonnagiri Gold · Ongoing drilling · Medium confidence Beyond 20 tons
    As of today, it has about 12 tons of proven resource, but it has the potential to go beyond 20 tons, where currently, again, drilling is going on.

    — Hanuma Prasad, Managing Director

Resource Base - Finland Gold

  • Resource to Prove Resource Base - Finland Gold · Next one year · High confidence 4 tons
    And in Finland, we have about four tons of resource that we are going to prove. ... I think next one year we will be able to prove that kind of resource to the sustaining drilling operations and a small open pit is going to be open next year, subject to the environment clearance approval and also availability of the funds to us.

    — Hanuma Prasad, Managing Director

Resource Base - Mozambique Lithium/Tantalum

  • Potential Ore Resource Resource Base - Mozambique Lithium/Tantalum · Future · Medium confidence More than 3 million tons
    with further drilling, we can approve more resource and increase the potential to more than 3 million tons of ore

    — Hanuma Prasad, Managing Director

Project Timeline - Kyrgyzstan

  • Trial Production Start Project Timeline - Kyrgyzstan · Near term · High confidence Within a couple of weeks
    We have set up everything, and within a couple of weeks, you will see that the trial production is underway.

    — Hanuma Prasad, Managing Director

Project Timeline - Mozambique Lithium/Tantalum

  • Processing Plant Setup Project Timeline - Mozambique Lithium/Tantalum · End of next year · Medium confidence Plant built
    so that we can build a proper flotation plant as I said by the end of next year, we will have that plant built also.

    — Hanuma Prasad, Managing Director

Project Timeline - Mozambique (Lithium/Tantalum & Copper-Gold)

  • Drilling Operations Start Project Timeline - Mozambique (Lithium/Tantalum & Copper-Gold) · Next year · High confidence January onwards
    We will probably drill from January onwards. ... we will be drilling from January onwards.

    — Hanuma Prasad, Managing Director

Project Timeline - Bhalukona

  • Drilling Operations Start Project Timeline - Bhalukona · Next year · High confidence January onwards
    that is what again we are going to drill from January onwards.

    — Hanuma Prasad, Managing Director

Project Timeline - Finland

  • Trial Mine Start Project Timeline - Finland · Next year · High confidence 2026

    Previously 2025 → 2026

    As you know, we wanted to start a trial mine in Finland in the year 2026. Actually, that was planned in this year itself, in 2025.

    — Hanuma Prasad, Managing Director

ESG

  • ESG Compliance ESG · Next year onwards · High confidence Completely ESG compliant
    And from next year onwards, we are going to be completely ESG compliant and we have already appointed a team of people who have been working on it.

    — Hanuma Prasad, Managing Director

Corporate Governance

  • Physical AGMs Corporate Governance · Next year onwards · High confidence 100% physical AGMs
    but from next year onwards 100% we are going to have physical AGMs that there is no doubt about it.

    — Hanuma Prasad, Managing Director

Profitability - Kyrgyzstan

  • EBITDA Margin Profitability - Kyrgyzstan · Future · High confidence 70% to 75%
    so the EBITDA margins are as you said it is about 70% to 75% is the EBITDA margin.

    — Hanuma Prasad, Managing Director

  • PAT Profitability - Kyrgyzstan · Future · High confidence 35% to 40%
    So in terms of PAT, we are looking at around 35% to 40% from Kyrgyzstan.

    — Hanuma Prasad, Managing Director

Taxation - Jonnagiri

  • Corporate Tax Taxation - Jonnagiri · Future · High confidence 30%
    And in case of Jonnagiri, it is a 75% is the EBITDA, on that we have 30% is the corporate tax.

    — Hanuma Prasad, Managing Director

What to watch in Q3 FY26

Kyrgyzstan Trial Production Start

Within a couple of weeks
Current Final preparations underway
Target Trial production commenced

Why it matters

First production from a majority-owned project, crucial for revenue generation and validating the company's strategic shift.

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

Risks & concerns

  • Shareholder distrust and concerns over rights issue timing/pricing and stake dilution

    high

    Shareholders expressed strong concerns about the timing and pricing of the rights issue and the dilution of the Jonnagiri stake, questioning management's motives, which management defended as strategic for debt repayment and growth.

    Analyst acknowledged

  • Delays in project commissioning (Jonnagiri, Kyrgyzstan)

    medium

    Jonnagiri and Kyrgyzstan projects experienced delays due to approvals and mobilization, but management states these are now resolved and production is imminent.

    Analyst acknowledged

  • Legal and regulatory impasse for Ganajur/Hatti licenses

    medium

    The Ganajur/Hatti projects are stuck in legal and regulatory challenges related to the 10A(2)(b) policy, with management actively working with courts and government but no clear resolution timeline.

    Analyst acknowledged

  • Geological uncertainty and potential for not finding metal after drilling

    medium

    An inherent risk in mining exploration, where there's a possibility that expected metal reserves may not be found after drilling, was raised by an analyst.

    Analyst acknowledged

Q&A highlights

5 direct, 1 evasive
Jonnagiri stake dilution, rights issue timing, and alleged ulterior motives Partial
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.

Highlights significant shareholder distrust and strong disagreement with management's strategic decisions regarding Jonnagiri and the rights issue, questioning motives.

Asked by Imran Ghani

Jonnagiri plant operational status and alleged glitches Direct
I can clearly tell you there are no glitches. The plant is working fantastic and whatever that has been predicted through the test work, both mining and processing, it is being reconciled very well. So there is absolutely no doubt in the project. It is not also running in the low capacity it is running at its approved capacity. The approved capacity is like is about 1000 tons now.

Addresses a key concern about the operational readiness and efficiency of the Jonnagiri plant, with management providing a strong rebuttal to rumors of glitches.

Asked by Imran Ghani

AISC for Altyn Tor and Jonnagiri, production targets, and mine life Direct
Hanuma sir, thank you very much for this detailed update. I understand there is some frustration from some of the shareholders on diluting the stake in Jonnagiri. Yes, I mean, we could have maybe done a rights issue in June, etc. Point taken. But I would just like to look ahead now what is done is done. Just a few questions, sir. In our slide, we have mentioned the AISC for Altyn Tor and Jonnagiri in the range of $1020 and $1045. So, is that the production cost as of today, sir? That was one question. Second is, so considering that today we are closer to 4,000 odd ton. So, therefore, we expect 70%, 75%, 80% kind of a margin thereabout. So, that was my first question, sir. As I can see, sir, Altyn Tor also we have mentioned about 350 kgs of production starting next year and for 28 if you can just clarify whether that can go up to 700 kgs. Within Altyn Tor we have mentioned that the mine has a six-year life only. So just if you can give some more color on that whether with the underground operations would that include the six years or with underground that goes up further. So that was the other question sir.

Seeks clarification on key profitability metrics (AISC, margins) and long-term production potential and mine life for the main projects.

Asked by Prateek Kothari

Total resource potential for Jonnagiri and Kyrgyzstan mines Direct
My question is, I want to ask about the total resource potential of both the projects, Jonnagiri and Kyrgyzstan mine. So as per your previous presentations, you have told that the total resource potential of Jonnagiri mine is close to 40 tons but the proven resource is up till date is 12 tons. So today you have mentioned that on further drilling it is expected that the proven resource could scale up to 20 tons. So by when we can expect the total resource to scale up to 40 tons and I also want to ask about the resource potential of Kyrgyzstan mine.

Focuses on the long-term asset base and growth potential of the core mining projects, seeking clarity on resource expansion timelines.

Asked by Pranjal Agarwal

Rights issue timing and plant stabilization Direct
So, is it not wiser to have a right issue after we make an announcement and have a higher price band instead of pushing the long-term investors into this right issue? So, let me have your viewpoint.

Reiterates shareholder concern about the timing of the rights issue relative to project milestones and potential stock price appreciation, suggesting a delay could yield better terms.

Asked by Prashant Deshmukh

FY27 topline and net profit projections Evasive
Good afternoon. Just wanted to have a very small quick clear answer for this expected topline and net profit for the next financial year 2027? ... Kunal would it be okay if I come back to you on this because that table is missing with me here now. I will come back to you in a day or two with those numbers because we have worked out the table is somewhere it is not here with me.

A direct question on future financial performance for a key year (FY27), which management was unable to answer immediately, indicating a potential lack of readiness or transparency on specific projections.

Asked by Kunal Shah

Gold equivalent calculation and geological surprises Partial
When you clarified regarding the 2000 gold versus 5000 gold and gold equivalent? Is this Deccan share of manufacturing after the percentage in the various entities? And secondly, is the 5000 gold and gold equivalent, the balance 3000 of non-gold, is that equivalent in terms of gold pricing, i.e. can we take 5000 kilos times gold price as the potential revenue accruing to the company? And my second question is, are there any surprises that can come in from the reserves and geological surveys, i.e. you see something present in the data you provided, but when you actually go and mine that you are surprised and find out the metal is not there.

Seeks clarity on how critical minerals contribute to the 'gold equivalent' and raises a crucial risk about geological uncertainty in mining, which management did not fully address.

Asked by Viraj Mahadevia

Ganajur/Hatti legal and regulatory impasse Direct
My question is around the old blocks of Ganajur and Hatti. There is tremendous research done on the resources and extraction. And I mean, last time also we spoke, it has been under legal and regulatory impasse. So I want you to share the insights that you have from the legal advisors, how things are proceeding. not just pertaining to industrial but in our case even though there are similarities, how are we proceeding and the cost likely to be incurred and by when do we see some light of the day because these are the biggest muscles we have in our armor so far the new projects are fine they are essential but this is really key

Addresses a long-standing issue concerning significant historical assets and their potential for commercialization, highlighting the impact of regulatory hurdles.

Asked by Pranay Jain

3 min read 7 chapters

Detailed narrative

Operational Milestones and Production Outlook

Deccan Gold Mines has successfully commissioned its Jonnagiri gold plant, completing all trials, with full-scale production expected to commence soon. The initial production forecast for Jonnagiri is 400 kilos per year, projected to increase to 500 kilos in FY2027 and eventually 800 kilos. Similarly, the Kyrgyzstan project is in its final stages, with trial production anticipated within a couple of weeks, aiming for 350 kilos in FY2027 and a peak potential of 800 kilos within three to four years. The Finland project is expected to produce 276 kilos per annum by 2029, contributing to a total gold production target of around 2 tons as Deccan's share.

Strategic Diversification into Critical Minerals

The company is actively pursuing a strategy of diversification into critical minerals, identifying strong evidence of copper-gold mineralization in Mozambique and nickel-copper-PGM mineralization in the Bhalukona project in India. Drilling operations for these projects, along with lithium-tantalum exploration in Mozambique, are planned to commence from January onwards. The goal is to increase the resource potential, with Mozambique lithium-tantalum aiming for over 3 million tons of ore, and to become a supplier of critical minerals by 2030.

Rights Issue for Debt Repayment and Growth Funding

Deccan Gold Mines plans a rights issue to raise approximately Rs.315 Crores, primarily to repay its existing debt of Rs.200 Crores, which currently carries a cost of about 12%. This move is aimed at making the company a debt-free entity by the end of 2025 or upon the completion of the rights issue. The remaining funds will be allocated to initial stage exploration and drilling programs across four other projects, which management believes will create significant value for the company.

Shareholder Concerns and Management's Strategic Defense

The call revealed significant shareholder concerns regarding project delays, the dilution of Deccan's stake in the Jonnagiri project from 42% to 27%, and the timing and pricing of the rights issue. Management defended its strategy, explaining that the stake reduction in Jonnagiri was a deliberate prioritization of investment into the majority-owned Kyrgyzstan project. They asserted that the rights issue is intended to benefit existing shareholders by clearing debt and funding future growth, refuting claims of ulterior motives or a 'backdoor' entry for new investors.

ESG Commitment and Community Impact

Deccan Gold Mines emphasized its strong commitment to ESG standards, particularly in community development and environmental responsibility. The company highlighted its positive social impact, employing 600-700 people in Jonnagiri and 200 people in Kyrgyzstan, significantly benefiting these thinly populated and backward areas. Management stated its intention to be fully ESG compliant from next year onwards and to hold 100% physical AGMs from next year.

Long-term Resource Expansion and Project Pipeline

The company's long-term strategy focuses on continuous resource expansion, with Jonnagiri having the potential to go beyond 20 tons of gold and Kyrgyzstan aiming for over 8 tons. Finland's Kuikka project is targeted to prove 4 tons of resource within the next year. This pipeline of projects, including Mozambique and Bhalukona, is expected to drive the company's growth and value creation, with the aim of converting these resources into mineable projects sequentially.

Legal and Regulatory Challenges for Historical Assets

The Ganajur and Hatti licenses, representing significant historical assets, remain under a legal and regulatory impasse related to the 10A(2)(b) policy. Management acknowledged the bottleneck and stated that it is actively engaging with the Supreme Court, state authorities, and the central government to resolve this issue. They expressed hope that a policy change could facilitate the commercialization of these projects, which are considered crucial for the company's long-term asset base.

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