Develop contracts GR Engineering for Woodlawn processing plant
ASX-listed Develop Global is moving closer to production at its Woodlawn copper/zinc mine, with the company awarding a key contract to GR Engineering Services (GRES) for the upgrade and recommissioning of the processing plant. The project, located in New South Wales, is expected to start production by mid-2025.
The awarding of the contract has triggered a milestone payment of up to A$20-million to project vendor OMF Fund II (H) Ltd (Orion), in line with the terms set out in the cooperation deed signed when Develop acquired the Woodlawn mine in February 2022.
The payment will be settled through a combination of cash and shares.
In a statement, Develop MD Bill Beament said Woodlawn was on track to be fully funded through to production, with the finalisation of a prepayment/loan facility with commodities trading giant Trafigura expected in the coming weeks.
“We have contracted processing specialists GRES to upgrade and recommission the Woodlawn plant and we have already resumed underground development to ensure we are well ahead of the schedule,” Beament said.
“The recently updated project restart study showed Woodlawn will generate outstanding cashflows and returns for our shareholders.”
Develop will issue five-million new shares at A$2 each to existing shareholders to cover the cash component owed to Orion. Another 4.8-million shares will be issued to Orion at a five-day volume-weighted average price of A$2.08 a share to complete the milestone payment. The shares are expected to be settled later this month.
Woodlawn has a resource of 11.3-million tonnes at 1.8% copper, 5.8% zinc, 2.1% lead, 46 g/t silver, and 0.5 g/t gold, for contained metal of 190 000 t copper and 650 000 t zinc.
The mine plan estimates that Woodlawn will produce an average 12 000 t/y of copper and 36 000 t/y of zinc metal in payable streams over an estimated ten-year mine life, with life-of-mine payable metal of 80 000 t copper and 218 000 t zinc.
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