Lifezone Metal’s Kabanga Financing Shifts to the Equity Question: 7 Things You Need to Know

Lifezone Metals (NYSE: LZM) has moved the Kabanga Nickel Project through feasibility, secured early-stage funding, and begun engaging on a project finance structure targeting roughly 60% debt and 40% equity. Kabanga's geology and first-quartile cost position are no longer the primary questions on the table. The variable that now determines whether the project reaches a Final Investment Decision (FID) on schedule, and on what terms for existing shareholders, is who provides the equity portion and under what conditions.

1. The Capital Structure Is Defined; the Equity Slot Is Not

The broad shape of Kabanga's project finance package is known. Pre-production capital expenditures are estimated at $942 million, with total project costs rising to approximately $1.2 billion upon inclusion of capitalized operating and financing costs during construction. The target structure is approximately 60% debt and 40% equity, a split that has emerged from multiple rounds of engagement with potential lenders. Société Générale leads the project finance process.

At the target 60/40 split, the equity portion of the pre-production capital base alone represents a substantial requirement, running into the hundreds of millions of dollars, and rises further when capitalized operating and financing costs are included in the total project cost. The Taurus Mining Finance bridge facility, at $60 million, funds execution readiness and development activities through to FID and financial close, but does not constitute the construction equity tranche. It does not fill the equity slot for construction financing. The question of who provides that equity and on what terms is the open variable in the structure.

2. Debt Capacity Looks Credible

The debt side of the package benefits from what Kabanga's geological and cost parameters actually deliver. Proven and Probable Mineral Reserves of 52.2 million tonnes at grades of 1.98% nickel, 0.27% copper, and 0.15% cobalt support an 18-year mine life with steady-state throughput of 3.4 million tonnes per annum. All-in sustaining costs (AISC) of $3.36 per pound of payable nickel, net of copper and cobalt by-product credits, place Kabanga in the first quartile of the global cost curve. The after-tax net present value at an 8% discount rate (NPV8%) is $1.58 billion, compared with an after-tax internal rate of return (IRR) of 23.3%.

Chief Financial Officer of Lifezone Metals, Ingo Hofmaier, puts it directly:

"The project itself is very strong economically. The debt capacity of the project is quite high."

High grade drives high margins, and high margins underpin lender repayment confidence across price cycles. Development finance institutions (DFIs) and export credit agencies (ECAs) engaged in the process,  including the US Development Finance Corporation (DFC) and Japan Oil, Gas and Metals National Corporation (JOGMEC),  are evaluating the project on exactly those parameters. Debt is not the constraint.

3. Equity Is the Real Variable, & the Requirement Is Substantial

A 40% equity requirement for a project with $942 million in pre-production capital and a total cost base approaching $1.2 billion translates into an equity commitment ranging from the mid-300s to $500 million, depending on which cost base is applied. That is not a figure that can be sourced from the bridge facility, from Lifezone's current cash position, or from incremental equity raises at the corporate level without significant dilution.

Hofmaier is precise on this point:

"We probably have to find or enter some form of a partnership again for the equity check."

The Government of Tanzania holds a 16% free-carried interest and is not expected to contribute capital. That means the equity requirement falls entirely on Lifezone and whatever partner or investor structure is assembled.

4. Offtake Control Is the Leverage Point in Both Debt &Equity Negotiations

Lifezone's acquisition of BHP's 17% equity interest in Kabanga Nickel in mid-2025 transferred 100% offtake control to Lifezone alongside the ownership consolidation. That position matters structurally in the financing process.

ECAs and DFIs engaged in critical minerals financing,  particularly the DFC and JOGMEC,  typically require confirmed offtake arrangements as a precondition for debt commitments. Unified offtake control removes a potential negotiating complication and provides lenders with clarity on where Kabanga's nickel concentrate will be directed and by whom. It also creates a direct link between offtake counterparties and the equity discussion: Western smelters with supply chain alignment to FORGE (the Forum on Resource Geostrategic Engagement, formerly the Mineral Security Partnership (MSP)) are logical candidates for both offtake and equity participation.

Hofmaier frames the connection:

"As part of the BHP transaction, we now have 100% of the offtake, which is always beneficial. We are in regular touch with European capitals, Washington, and Tokyo through the MSP [now rebranded as FORGE]. We are very well advanced in due diligence exercises with several of them, as the DFC and JOGMEC are public, and most people in the industry would understand that if you have a high-grade sulfide deposit producing a very clean concentrate, you would also speak to Canadian and northern European offtakers. This lays out the lens quite clearly for where the material will go and where the funding will ultimately come."

Offtake is not simply a revenue contract. At Kabanga's stage, it is the instrument through which Lifezone can link debt providers to equity candidates and structure a package that serves both simultaneously.

5. The Range of Equity Sources Carries Different Implications

Lifezone has received non-binding indications of interest and term sheets from an international list of potential strategic partners, including major miners, sovereign investors, and private equity. Site visits were concluded in August 2025. All strategic options remain under evaluation, including a potential asset-level change of control. The strategic investor process is being managed through Standard Chartered Bank in parallel with the Société Générale project finance process.

The Standard Chartered process is running in parallel with, but separately from, the Société Générale project finance track. Where the debt process is advancing toward lender credit approvals and formal mandates, the Standard Chartered mandate is oriented toward identifying a counterparty willing to commit equity at the project level. The two tracks converge at financial close, where a committed equity partner and a completed debt syndicate are required simultaneously. Lifezone holds 84% of Kabanga Nickel, with the Government of Tanzania's 16% free-carried interest already defined, which means the equity stake being negotiated comes from Lifezone's existing position rather than from newly created project-level shares.

6. The Tanzania Financial Model Is a Prerequisite, Not a Formality

Before Lifezone can finalize the main project finance package or close an equity transaction, the joint financial model with the Government of Tanzania must be completed. This process involves finalizing the fiscal, royalty, and revenue-sharing terms that will govern the project over its 18-year mine life. Lenders and equity investors cannot properly underwrite their returns without visibility into the government's share of project economics.

The Taurus facility draw schedule is directly connected to this timeline. Completion of the joint financial model is a condition precedent for the second drawdown under the bridge facility. As of early March 2026, the second Taurus drawdown remained pending closing, consistent with the joint financial model process still being active. Until it concludes, the project finance package cannot be formally structured, and the equity process cannot be completed.

This does not represent a fundamental impediment. The Framework Agreement between Lifezone and the Government of Tanzania is long-standing, and the government's free-carried interest position is already defined. However, the specific financial model terms are material to the economics that any equity investor prices when assessing entry valuation, and their finalization is a precondition, not a parallel workstream.

7. The Three Conditions That Determine FID

The Kabanga project advances to FID when three conditions are satisfied in sequence: the Tanzania financial model is finalized, the equity portion of the project finance package is committed, and the main debt facility is closed. The geology and feasibility studies have already removed the technical credibility questions that dominated earlier stages of the project.

The variables that now determine the outcome are commercial, not geological. The entry valuation for the equity partner determines the dilution cost for existing shareholders. The type of partner shapes governance over the project's development beyond the initial feasibility case, including the eventual downstream processing pathway Lifezone has articulated through its Hydromet Technology. The ownership retained by Lifezone at the project level determines its leverage over future monetization events, including the potential for a Stage 2 assessment targeting Kabanga's identified exploration upside across the Safari Link, Safari Extension, Rubona Hill, and Block 1 South targets.

Different equity solutions could lead to materially different governance and shareholder outcomes. The project finance process, led by Société Générale, and the parallel strategic investor process, managed by Standard Chartered Bank, are running in parallel to close the optimal equity solution ahead of the late-2026 FID.

What to Watch

Several developments should be observed. Completion of the Tanzania joint financial model, which clears the path for both the second Taurus drawdown and the formal project finance mandate. Any announcement of a strategic partnership or equity commitment, which will define the ownership structure through to construction and first production. Progress of the project finance process with Société Générale, where anchor expressions of interest from the DFC and JOGMEC are already on record, but a committed debt package has not yet been announced. FID is a financing event, not a study event. The conditions for it are now financial and organizational, and the timeline depends on how quickly those conditions are met.

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