Kal Miner article 9th May ( Pioneer Dome )

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New study encourages Bill Beament’s Develop Global to push on with Pioneer Dome lithium project

Develop Global managing director Bill Beament

Bill Beament’s Develop Global is pushing on with the Pioneer Dome lithium project in the Goldfields after redesigning it and generating two scenarios for its future operation.
Develop told the ASX this week that Pioneer Dome’s build-own-concentrator scenario could generate substantial net present values at “consensus prices” for 6 per cent spodumene concentrate (SC6), with the project significantly leveraged to price increases.
The company said the “strong” findings were based on a Bloomberg consensus forecast of US$1393/t for SC6 and a seven-year mine life, and assumed Develop built all site infrastructure.

It said this would generate a pre-tax net present value of $373 million and free cashflow of $666m.


The study said pre-production capital of $285m would be required, which would see the construction of a 1.2 million tonnes per annum processing plant, including a flotation circuit, accommodation camp and associated site infrastructure.
“Develop would consider adopting this option in the event that the price of 6 per cent spodumene concentrate rose to US$1500/t,” the company said.
“At this price, the project delivers free cashflow of $823m.”
It said the results in this scenario were significantly better than those contained in the February 2023 scoping study, mainly because of the company’s decision to mine Pioneer Dome predominantly via underground methods.
“Small, low strip ratio pits will produce early ore and cashflow and create access points for the larger underground mines,” the company said.
“This will deliver significant benefits, including an increased production profile compared to previous mine plans and the ability for fast and effective production ramp-up.”
However, the study said a mine gate sale or toll treatment scenario would substantially reduce the capital outlay by $250m to just $35m to $40m, as there would be no need to construct a processing plant, associated site infrastructure or an accommodation camp.

“Under this second scenario and subject to third party commercial terms being acceptable, the project’s net present value and cashflow increases significantly and the construction and operating risks reduce substantially,” the company said.
Develop said the study was based on the December 2022 maiden mineral resource of 11.2Mt at 1.2 per cent lithium oxide.
Mr Beament said based on the study’s findings, Develop would advance studies on both options in parallel while progressing the approvals process and other aspects of the project, which was expected to take about six months.
“A decision on which route to pursue will be taken in light of the prevailing price environment at the time,” he said.
Mr Beament said the study showed Pioneer Dome was an extremely robust project with strong financial returns across the price spectrum and a substantial upside because of its leveraged exposure to any rise in the lithium market.
“We have completely redesigned the project, removing the planned large pits and replacing it with smaller pits which will generate cashflow faster and for less capital cost,” he said.
“We will then go underground, which was not contemplated in the previous study. This will generate less waste and surface disturbance.
“If we adopt a toll treatment or mine gate sale approach, our capital cost will be no more than $40m and the time to first production and revenue will be extremely short by any comparable measure.

“There is also very limited availability of JORC-classified spodumene resources in Australia which are not already covered by offtake contracts.
“Such resources qualify for substantial government subsidies, including from the US, further underpinning the financial merit of Pioneer Dome.
“As a result of this study, we now have a host of development and funding options to consider.”