Deccan Gold turns profitable; raises ₹315 crore
Deccan Gold Mines Limited announced that its associate company Geomysore has turned profitable with the Jonnagiri Gold Project commencing sales. The company raised ₹315 crore via a rights issue, becoming debt-free, and provided updates on its Kyrgyzstan and Bhalukona projects. Management forecasts FY2027 revenue of ₹900 crore from Jonnagiri and aims for full-scale production in Kyrgyzstan by August 2026.
*this image is generated using AI for illustrative purposes only.
Deccan Gold Mines Limited conducted an Investor Relations call on May 19, 2026, to discuss the company's operational progress and financial performance for the fourth quarter of fiscal year 2026. The management, led by Managing Director Dr. Hanuma Prasad, highlighted a transformative period for the company, marked by the commencement of revenue generation from its associate company and significant advancements in its mining projects across India and abroad.
A key development discussed was the performance of Geomysore Services, in which Deccan Gold Mines Limited holds a 26% stake. The Jonnagiri Gold Project, operated by Geomysore, has started generating revenue through the sale of gold from trial production. The project has achieved profitability, with refined gold bullion already sold. Management noted that this is the first gold project commissioned in India post-independence. For FY2027, the production forecast for Jonnagiri stands at 600kg, with potential revenue estimated at ₹900 crore based on current prices, and an EBITDA margin of approximately 75%.
Financial Overview and Capital Allocation
The company successfully raised ₹315 crore through a rights issue during the quarter. These funds were utilized to repay all outstanding debts totaling ₹219 crore, effectively making the company debt-free. A portion of the proceeds, amounting to ₹32 crore, was invested in the Kyrgyzstan project, while ₹55 crore was invested in Geomysore Services to maintain the 26% shareholding. Despite these allocations, the company requires an additional ₹60 crore to ₹100 crore to complete the Kyrgyzstan project and is in discussions with investors and promoters to secure this funding.
| Fund Utilization | Amount (₹ Crore) |
|---|---|
| Debt Repayment | 219 |
| Investment in Kyrgyzstan Project | 32 |
| Investment in Geomysore Services | 55 |
| Total Rights Issue Raised | 315 |
Project Updates: Kyrgyzstan and Bhalukona
At the Altyn Tor Gold Mine project in Kyrgyzstan, where Deccan Gold holds a 60% stake, the gravity circuit has been commissioned, and the company has started producing gold concentrates. Management expects to commission the Merrill Crowe system in June 2026 to produce Doré bars, with full-scale commercial production slated to begin by August 2026. The project aims to produce 160kg of gold in FY2027, with projections of 300 to 350kg in FY2028. Revenue for FY2027 is estimated at ₹300 crore, with a PAT of around ₹100 crore, of which ₹60 crore will be attributable to Deccan Gold.
In India, the Bhalukona Nickel-Copper-PGE project in Chhattisgarh has reported significant discoveries. The company has completed 1,200 meters of diamond core drilling, intersecting mineralized layers with widths up to 60 meters. High-grade zones within the drill holes showed assays of 1.01% nickel, 0.29% copper, and 0.2 grams per ton of palladium. Management believes the project holds the potential for an open-pit mine and plans to accelerate the drilling program to prove resources and apply for a mining lease soon.
Future Outlook and Global Expansion
Deccan Gold Mines is also advancing projects in Mozambique, Finland, Spain, and Tanzania. The company is exploring lithium, tantalum, and copper-gold in Mozambique, while the Kalevala Gold project in Finland and the Logrosan Tungsten project in Spain are undergoing evaluation and drilling. Management expressed confidence in the geological potential of these assets, particularly the Tungsten project in Spain, where drilling has intersected mineralized zones.
Looking toward 2030, the company envisions operating two to three gold mines and a couple of critical mineral mines. It aims to increase gold production at Jonnagiri to one ton per annum and Altyn Tor to nearly one ton. Additionally, it plans to develop India's first Nickel-Copper-PGE mine at Bhalukona and commence production from its Mozambique and Finland projects. To support these ambitious plans, the company anticipates requiring a larger fund raise, potentially between ₹800 crore and ₹1,000 crore, in the coming years.
Historical Stock Returns for Deccan Gold Mines
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.32% | +17.96% | +21.38% | +18.86% | +18.86% | +18.86% |
How will Deccan Gold Mines structure the anticipated ₹800–₹1,000 crore fundraise, and what dilution risk does this pose to existing shareholders given the recent rights issue?
If Kyrgyzstan's Merrill Crowe system commissioning faces delays beyond August 2026, how would that impact the company's projected FY2027 PAT of ₹100 crore and its ability to fund other global projects?
With gold prices at historically elevated levels driving Jonnagiri's 75% EBITDA margin, how sensitive is Deccan Gold's overall financial outlook to a significant correction in gold prices?
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