Develop Global (ASX: DVP) – the Woodlawn Project new owner
COMPANY SCOREBOARD
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ABOUT COMPANY
Develop Global (DVP) (https://develop.com.au/) develops two advanced Copper-Zinc Projects, namely, the Sulphur Springs Project (100%) and the Whim Creek Project (20%), near Port Hedland in the Pilbara region of Western Australia.
In February 2022, the company acquired HRR’s Woodlawn Zinc-Copper Project for a total of $30m upfront consideration ($15m cash and $15m shares) and $70m success-driven milestone payments.
In July 2023, the company acquired ESS by script valuing ESS for $153m ($3.46 per DVP share) for its 1.2Mt at 1.16% lithium resources.
CAPITAL STRUCTURE
| ASX Code | Share Price | Shares | Option (In) | Market Cap | Cash/Asset ($m) |
| DVP | 2.22 | 242653581 | 29400000 | 603958949.82 | 32.5/22 |
| Holders No | Top 20 (Cur) | Top 20 (Pre) | Director Hold | Performance Right | Note |
| 8488 | 61.18% | 58.72% | 17.84% | 787600 | last raise $50m@$3.2; pre raise $50m@$3.3 |
The Managing Director, Bill Beament is the former Executive Chair of NST (2007 -2021). In May 2023, he exercised 11m@67c options.
COMPANY ASSETS
Woodlawn Zinc-Copper Project NSW
$70m milestone payments include
- A$12.5m payable on definition of 550,000 tonnes ZnEq underground JORC Reserves (Existing U/G Reserve of 3.1Mt @ 13.1% ZnEq and Resource of 7.4Mt @ 15.2% ZnEq)
- August 2022 update confirm U/G resource of 4.3Mt@c.13%ZnEq
- A$7.5m payable on the definition of 680,000 tonnes ZnEq underground JORC Reserves
- A$20.0m payable on a positive Final Investment Decision (FID) in respect of Woodlawn
- A$30.0m payable on 18 months of continuous commercial production from Woodlawn
Re-start of production won’t happen before March 2024, and the September 2023 mine plan assumed the commodities prices for Yr 1 to be 10% above the current spot price, and higher thereafter.
Sulphur Springs Cu-Zn-Ag Project Malina Basin WA (100%)
Below are the project’s resources:
Mining Service Division
The company agreed to acquire Premium Mining & Civil Pty Ltd and Premium Mining Personnel Pty Ltd (together, the Premium Group) for total consideration of $7.46 million less net debt, to be satisfied by $300,000 in cash and the balance in Develop shares.
The company has built a mining service division, it has been awarded the mining contract at Bellevue Gold’s (ASX: BGL) Bellevue Gold Mine in Western Australia. The contract is valued at ~A$400 million and covers almost four years from the June Quarter of 2022.
The profit margin of 10% after payroll tax will cover the majority of the corporate overheads.
SUMMARY
Woodlawn’s FID is at least 2 years away. In the meantime, if the company can generate $10m a year of cash flow from the Mining Service Division, it will keep the share price floating at a reasonable level.
The company’s recent Woodlawn and Sulphur Springs resources update didn’t bring much surprise, in fact, it might have suggested that the potential for both projects are limited beyond known information.