Ann: Discovery of extensive high-grade mineralisation at Woodlawn, page-30

DEVELOP:

There is a “live” example out there of a company pursuing the same strategy for an asset also bought off administrators for a knock-down price – Bill Beament’s Develop (DVP).

In Develop’s case, it is the Woodlawn zinc-copper mine near Canberra in NSW, picked up from the administrators of Heron Resources for $30 million in cash and shares up front early in 2022, with $70 million payable on certain milestones being met.

Heron spent $340 million on the development and Beament could have turned the thing back on if he so fancied. But he didn’t, preferring to use the drill bit to first grow the resource, invest in new equipment, and bring in the “A” team of miners to step up development work.

Assembling the “A” team was made possible at a time of the on-going skills shortage because of Develop’s in-house underground contract mining division and Beament’s status as the guy that took Northern Star from a small explorer to what is now becoming Australia’s biggest listed gold producer with a market cap of $13.6 billion.

Beament had a similar strategy at the Paulsens gold mine in WA where the Northern Star growth story began. Projects later picked up by the company, including KCGM in Kalgoorlie, all became bigger and better after Beament gave them the love and attention their previous owners did not.

Beament is yet to spell out what the “new” Woodlawn will be capable of doing. Heron used to quote an annual production target of 40,000tpa zinc, 10,000t of copper, 12,000t of lead, 800,000oz of silver, and 3,500oz of silver.

Beament’s overall objective has been to grow the inventory and mine life at Woodlawn before turning the lights back on. The current resource is 7.3Mt at 5.7% zinc and 1.8% copper, along with values for the other metals.

A resource update is due in the December quarter. Judging by exploration results, it will be one to watch out for. Results reported this week from exploration outside of the known resource have included 16m at 10.4% zinc equivalent and 13m at 8.1% equivalent.

Extensional drilling in the main production lenses has returned some absolute pearlers, including 13m at 32.9% equivalent. Beament can get as excited as Parsons on these things.

“Woodlawn is perfectly positioned to capitalise on the coming exponential growth in demand for energy transition metals, particularly from Australia, a tier-1 mining jurisdiction,” Beament said.

Develop last traded a shade higher at $2.87. It was $3.40 six weeks ago.