PERTH (miningweekly.com) – ASX-listed Develop has completed the A$100-million acquisition of the Woodlawn zinc/copper project, in New South Wales.
Develop on Friday announced it had completed the purchase of all shares in Heron Resources, under the terms of a deed of company arrangement (DOCA) and orders of the Supreme Court of New South Wales.
Develop has now paid a A$30-million up-front consideration to Heron’s creditors, comprising A$15-million in cash and the issue of more than 4.7-million shares, at a deemed price of A$3.14 each. The company has also reimbursed A$500 000 for care-and-maintenance costs.
Under the cooperation deed entered into with Orion, Develop has also agreed to pay up to A$70-million to Orion subject to certain milestones being met, which Develop may elect to satisfy in cash or shares.
MD Bill Beament said completion of the Woodlawn acquisition was a pivotal point in the company’s growth plan.
“This is an outstanding deal which has delivered Develop a world-scale project complete with an underground mine and processing infrastructure. We have used the three months since we agreed the purchase to devise a full exploration strategy with the aim of converting inferred resources, extending the mineralised lenses, which we know are open at depth, and drill testing the electromagnetic conductors identified by leading consultants NewExco.
“Now we can start implementing that strategy,” Beament said.
Woodlawn has historically produced 13.8-million tonnes of ore at 19.7% zinc equivalent between 1978 and 1998, when it was closed due to depressed commodity prices and insufficient drilling to extend known mineralisation.
Heron began redeveloping Woodlawn in 2017. However, the company encountered ramp-up challenges and Covid-related issues in 2020, coupled with a corporate strategy that was not suited to this type of operation. As a result of these factors, the project was placed on care and maintenance in 2020.
Heron went into administration in July 2021.
Develop’s growth strategy for Woodlawn is to aggressively grow the underground mining inventory over the next 24 to 36 months by investing in 1 000 m of underground development to establish multiple drilling platforms and to subsequently complete a 33 000 m underground diamond drilling programme targeting lens extensions, untested electromagnetic conductors and additional mineralised horizons. Develop is ultimately aiming to define a robust high-grade seven- to ten-year underground mining inventory, ahead of a potential restart of operations.