ASX-listed Develop Global has kicked off early works at its Sulphur Springs zinc/copper project in Western Australia’s Pilbara region ahead of an updated definitive feasibility study (DFS) due in the December quarter.

The upfront development strategy, including boxcut excavation for the underground decline and surface clearance for plant infrastructure, reflects the same upfront capital approach used at the company’s Woodlawn project in New South Wales.

“We have already established that Sulphur Springs is an extremely strong project and will generate outstanding free cashflow and overall returns,” said MD Bill Beament.

“By building the underground decline and associated infrastructure at the start of the project, rather than as the mine is developed, we can confirm our forecasts and unlock the potential for further gains in mine life and mining productivity,” Beament said.

“In the process, we will significantly de-risk the mining operation because the underground capital development will be completed well in advance of mine production activities,” he added. “This approach, which has been a key factor in the huge success we are now enjoying at Woodlawn, will underpin an updated DFS, significantly de-risk the project and give us more funding options.”

The current works include clearing for processing facilities and mining infrastructure, excavation of the boxcut to expose geotechnical conditions, and mobilisation of Develop Mining Services to establish underground workshops and related infrastructure.

The boxcut is expected to be completed in the September quarter.

Underground development – including twin declines and access drives down to 350 m below the surface – is scheduled to begin in the December quarter. The company expects this strategy will boost productivity, reduce ore dilution, and allow underground drilling from new platforms to expand resources and reserves. Forecast improvements in ore production of about 20% are expected to be reflected in the updated DFS.

The Sulphur Springs project hosts a resource of 17.4-million tonnes at 5.8% zinc, 1.0% copper and 21 g/t silver, with reserves of 8.8-million tonnes at 1.1% copper and 5.4% zinc. The project is fully permitted.

A June 2023 DFS estimated a pre-tax net present value of A$523-million based on a 1.25-million tonne-a-year operation producing 30 000 t/y of copper-equivalent metal. At the time, the study forecast revenue of A$2.9-billion and free cash flow of A$745-million over the life of mine.

Consensus prices for copper and zinc have since risen substantially, and Develop will incorporate those increases, along with lower smelter treatment charges, into its upcoming financial model. The company sees potential for further upside through exploration and potential plant capacity expansion, with the Kangaroo Caves deposit and the Sulphur Springs openpit yet to be included in economic studies.

The final investment decision is expected to follow the completion of the revised DFS.