Lifezone’s Kabanga Project Needs Near-Term Funding as Orion Investment Talks Advance

Lifezone Metals is seeking a partner for a Tanzanian nickel project whose construction would require far more capital than the company currently holds. Its immediate financing needs arrive sooner: Lifezone says it must raise additional capital by February 2027 to fund its activities and maintain a minimum cash covenant.

Lifezone confirmed on October 23 that it was in advanced negotiations with the Orion Critical Mineral Consortium over a significant equity investment in Kabanga. The amount Orion may invest and the ownership terms remain undisclosed, and the company has not announced a completed transaction.

Kabanga’s 2025 feasibility study estimated $942 million of pre-production capital for an underground mine and concentrator. Lifezone held $22.2 million of cash at September 30, 2026, some of it reserved for Kabanga. The near-term capital requirement concerns ongoing work and liquidity; funding construction would require a separate, substantially larger package.

All dollar amounts are U.S. dollars.

Kabanga’s proposed mine

Kabanga is a nickel sulfide deposit in northwestern Tanzania. Lifezone’s current plan is to mine ore underground and process it into a concentrate containing nickel, copper and cobalt. That concentrate would be an intermediate product for downstream processing, not finished battery-grade metal.

The 2025 feasibility study envisages a concentrator capable of processing 3.4 million tonnes of ore annually and an 18-year mine life. Its mine plan contains 52.2 million tonnes of proven and probable reserves grading 1.98% nickel, 0.27% copper and 0.15% cobalt. The study excludes inferred resources from the mine plan and economic analysis.

Over the modeled mine life, the concentrate would contain 902,000 tonnes of nickel, 134,000 tonnes of copper and 69,000 tonnes of cobalt. Copper and cobalt provide by-product value alongside nickel, although actual proceeds would depend on recoveries, contract terms and prices.

Lifezone acquired BHP’s interest in the project-holding company in 2025. It currently owns 84% of the Kabanga project, with the Tanzanian government holding 16%. Bringing in a project investor would provide capital in exchange for a share of the project’s future economics.

The BHP acquisition carries deferred payments. Lifezone owes a fixed $10 million within 30 days after the earlier of 12 months following a final investment decision or raising $250 million in aggregate funding. A second payment, linked to Lifezone’s share price, is due within 30 days after the first anniversary of commercial production. The cap on total consideration was reduced to $75 million following confirmation that a resettlement condition had been met. These obligations affect the cash ultimately retained by Lifezone as the project advances.

The study’s economics and capital demands

The feasibility study estimates $942 million of pre-production capital, including contingency. Its $2.49 billion estimate for total capital over the mine life already includes that pre-production amount, as well as capitalized operating expenditure, growth, sustaining and closure costs.

The study’s after-tax value is a project-level estimate based on assumed metal prices, costs and timing. It is not a value per Lifezone share. The company’s attributable interest, future financing terms and obligations would all affect what shareholders ultimately receive.

The feasibility study estimates average all-in sustaining costs of $3.36 per pound of payable nickel in concentrate, net of copper and cobalt by-product credits. The estimate for the first five years of production is $5.50 per pound. Both are modeled figures; by-product prices, recoveries and actual operating performance will influence the costs achieved.

The study’s nickel-price sensitivity also illustrates the importance of the metal’s price to the project. At $6.00 per pound of nickel, the modeled after-tax NPV at an 8% discount rate falls to $459 million, compared with $1.58 billion at the $8.49 base-case price. These are project-level study scenarios, not forecasts of future nickel prices or Lifezone’s equity value.

The study also leaves a long interval between a construction decision and full production. Financing must cover development before the mine generates operating cash, while lenders and equity investors must assess construction, ramp-up and commodity-price risks.

Cash and near-term funding needs

Lifezone’s cash balance increased from $20.1 million at December 31, 2025 to $22.2 million at September 30, 2026. The modest increase came after substantial financing activity during the nine months, including an equity offering and bridge-loan draws.

Investing cash outflows included $24.8 million spent on Kabanga. Net investing outflows were lower, at $24.1 million, partly because the company received $0.7 million in bank interest.

Financing inflows included $23.3 million of net proceeds from an April share offering and $21.7 million drawn under the senior secured bridge facility. The company issued 5.7 million ordinary shares at $4.40 each. Net financing cash flow was $34.1 million after outflows including interest and commitment fees on the bridge loan and convertible debentures, transaction costs and lease payments.

Of the September cash balance, $5.93 million was held by Kabanga Nickel Limited and its subsidiaries and could be used only for the project. The borrowing entity must also maintain at least $5 million in cash under the bridge facility. Lifezone reported $32.14 million in net current liabilities at September 30.

Management’s interim financial statements say additional capital is needed by February 2027 for corporate expenditure, operations, project development and the cash covenant. The statements identify substantial doubt about the company’s ability to continue as a going concern, while explaining that directors believe further funding can be raised.

A bridge with a conditional final draw

Lifezone had drawn $41.7 million of its $60 million senior secured bridge facility by September 30. The remaining $18.3 million was subject to conditions including an amendment to the project’s Framework Agreement with Tanzania. Following an extension, the facility was available for further draws until November 29, 2026.

The facility supports Kabanga’s early work and financing process. Management’s liquidity assessment assumes the available facility is fully drawn and consumed by forecast activities before the final investment decision. Access to the final tranche would therefore support that work but would not, on the company’s stated assessment, remove the need for additional capital by February.

The loan carries 9.25% annual interest on drawn amounts and is secured against project-related assets. Its scheduled maturity is July 31, 2027, with a six-month extension option subject to compliance with the facility agreements. Lifezone expects project financing proceeds to refinance the loan, making the timing of a broader financing relevant to repayment.

Lifezone also has unsecured convertible debentures from a $50 million financing completed in 2024. They mature on March 27, 2028, bear interest at SOFR plus 4.0% subject to a 3.0% SOFR floor, and are convertible at the holder’s option at $8.00 per share, subject to customary adjustments. Quarterly interest payments after March 2026 are payable in cash. The debentures add a funding obligation beyond the bridge loan’s 2027 maturity.

Government terms precede project financing

The unresolved Framework Agreement and a joint financial model are intended to establish the sharing of Kabanga’s economic benefits between investors and Tanzania. Lifezone says agreement on both is a condition for successful project financing. The same Framework Agreement amendment also affects access to the undrawn bridge tranche.

The company expects its board to make a final investment decision in the first quarter of 2027, although it says the date could move depending on lender due diligence and financing terms. The proposed Orion investment is part of that funding process. Orion’s consortium was launched with the U.S. International Development Finance Corporation and Abu Dhabi sovereign investor ADQ.

A project-level equity investment could reduce the amount Lifezone needs to fund itself while giving the new investor a share of future project distributions. Its effect on existing shareholders depends on the valuation, ownership sold and associated rights, none of which has been announced.

Lifezone is also pursuing project debt. Its filing states that a final investment decision would increase investment cash requirements and require equity, including a project-level stake sale, alongside a multi-source debt package. The negotiations therefore have two distinct objectives: securing enough liquidity to continue near-term work and arranging capital on terms that support construction.

What comes next

The immediate milestones are an amendment to the Framework Agreement and access to the remaining bridge funds, followed by the additional financing Lifezone says it needs by February 2027. Binding project-financing terms would then clarify how construction is funded and how much of Kabanga’s future cash flow remains attributable to Lifezone.