Develop Global (ASX:DVP) has inked a deal with commodities heavyweight Trafigura where the latter will offtake copper-zinc from Develop’s Woodlawn project.
The deal comes at perhaps an inopportune time for Develop: copper prices have recently crashed, basically erasing 2024 YTD gains.
Zinc is a similar story – what rally it enjoyed throughout H1 of CY2024 is now gone. A weak Chinese economy is the foremost catalyst influencing sentiment and fundamentals around projected demand for both metals.
At any rate, Develop stated on Friday that the offtake deal further solidifies a path forward to FID at Woodlawn.
“The offtake arrangement underpins Woodlawn’s future,” Develop Global MD Bill Beament said.
Today’s deal wasn’t just about offtake, however – Trafigura has also decided to fund the mine on a prepayment loan facility hybrid.
That FID will be positive is almost guaranteed given Develop described itself as now funded to production.
“The terms of the prepayment/loan facility are extremely competitive, with a low interest rate and significant flexibility,” Beament added.
“This represents a strong vote of confidence in the quality of the mine, its management and the ~A$400 million of equity capital that has been invested in the mine by Develop and the prior owner.”
DVP last traded at $2.28.