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- Develop Global (DVP) is acquiring the Woodlawn zinc-copper project in New South Wales for $30 million
- DVP says this is an “exceptional” opportunity as its has ‘world-class geology’, hosts future-facing metals in a tier-one location and the price is a fraction of the previously invested capital
- To fund the acquisition, the company has launched a $50 million equity raise, comprising a placement and entitlement offer of roughly 15.2 million shares at $3.30 each
- Once acquired, Develop Global’s initial focus will be on growing the mineral resource inventory through underground and infill drilling
- DVP placed its shares in a trading halt and last traded at $3.17 on February 16
Develop Global (DVP) has agreed to acquire the Woodlawn zinc-copper project in New South Wales for an upfront consideration of $30 million.
The Woodlawn underground mine and processing plant was developed by Heron Resources who invested $340 million in the project before it was put on care and maintenance in 2020, and Heron was placed in administration in July of last year.
Develop Global said the acquisition aligns with its growth strategy and meets its desired criteria including being a zinc-copper asset in a ‘tier-one’ location, world-class geology and being ‘outstanding’ value of money with the purchase price being less than 10 per cent of the previously invested capital.
The $30 million upfront consideration includes a $15 million cash payment and $15 million worth of DVP shares. Additionally, the purchase comes with success-driven milestone payments of up to $70 million.
Managing Director Bill Beament said the acquisition was an “exceptional” opportunity.
“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,” he said.
The project has a JORC resource of 18.2 million tonnes at 9.8 per cent zinc equivalent, including a high-grade underground resource of 7.4 million tonnes at 15.2 per cent zinc equivalent.
It also has a JORC reserve of 12.4 million tonnes at 7.8 per cent zinc equivalent, which includes a high-grade underground reserve of 3.1 million tonnes at 13.1 per cent zinc equivalent.
Once acquired, Develop’s initial focus will be on growing the mineral inventory through underground drilling. It will also undertake infill drilling to upgrade the inferred resource and target existing electromagnetic conductors.
“The potential to create value for our shareholders through inventory growth is enormous,” Mr Beament said.
To fund the acquisition, Develop Global is launching an institutional placement and entitlement offer to raise $50 million.
The placement will seek to raise $25 million through the issue of 7.6 million shares at $3.30 each, which marks a 4.1 per cent premium to Develop’s last traded price of $3.17 on February 16.
The other $25 million will be raised through the one-for-18.6 pro-rata accelerated non-renounceable entitlement offer of roughly 7.6 million shares.
Importantly, Bill Beament who owns a 16 per cent stake in the company and Mineral Resources who owns 15 per cent, will take up their full entitlements, totalling $8 million.
Develop placed its shares in a trading halt prior to the announcement and expects to resume trading by no later than Monday, February 21.
Shares last traded at $3.17 on February 16.
