Develop has agreed to acquire the Woodlawn zinc-copper project in NSW for an upfront consideration of AUS$30 million and success-driven milestone-related payments of up to AUS$70 million.
The Woodlawn underground mine and processing plant was developed by Heron Resources Ltd, which invested approximately AUS$340 million in the project before it was put on care and maintenance in 2020, and Heron was placed in administration in July 2021.
Develop’s strategy will centre on growing the inventory through an aggressive underground drilling program which will target extensions to the mineralised lenses. These remain open at depth. It will also infill drill the Inferred Resource to improve the geological confidence and target EM conductors identified by leading consultants NewExco during due diligence.
Develop Managing Director Bill Beament said Woodlawn was an exceptional acquisition opportunity:
“Such outstanding acquisition opportunities are extremely rare. Woodlawn hosts future-facing metals in a tier-one location and meets all our criteria for creating shareholder value.
“It is a substantially-developed project with extensive underground infrastructure and a new processing plant. The previous owners invested approximately AUS$340 million to re-establish the operation.
“The geology is first-class, with a VMS system which is under-explored and open in a number of areas. We are very confident that we will be able to grow the inventory rapidly by extending the key lenses using underground drilling.
“The potential to create value for our shareholders through inventory growth is enormous.
“Woodlawn also provides us with a valuable opportunity to further leverage Develop’s team of underground mining specialists, which is a key plank of our growth strategy.”
Woodlawn has a strong and profitable history, producing 13.8 million t at 19.7% ZnEq (Zinc Equivalent) from 1978 - 1998, when it was closed due to depressed commodity prices and insufficient drilling to extend known mineralisation.
Heron began redeveloping Woodlawn in 2017, investing AUS$340 million in Resource/Reserve definition, underground infrastructure and a 1.0 million tpy processing plant. 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.
Read the article online at: https://www.globalminingreview.com/mining/18022022/develop-agrees-to-acquire-woodlawn-zinc-copper-project/