Battery metals hopeful Develop Global has updated the market on a revised plan to de-risk and save costs on its Sulphur Springs zinc and copper project in the Pilbara.
Battery metals hopeful Develop Global has updated the market on a revised plan to de-risk and save costs on its greenfields Sulphur Springs zinc and copper project in the Pilbara.
The Bill Beament-steered company released the results of its updated definitive feasibility study (DFS) for its flagship project 140km south-east of Port Hedland.
Develop, formerly known as Venturex Resources, operates an underground mining services division alongside its base and precious metals development operations across two projects in the Pilbara.
The company’s updated DFS revealed that it would develop the project as an underground mine instead of as the initially planned open pit to reduce upfront capital costs.
In a statement on the ASX, Develop said it had also notched all the “major project approvals” for the project.
It also updated its estimated ore reserve from 8.5 to 8.8 million tonnes after “allowing for the removal of open pit material and focusing on underground material which delivers a higher value per tonne,” according to Develop.
Develop anticipates an average annual production of 80.8 kilotons of zinc and 16.4 kilotons of copper in payable streams over the first four years.
The project is forecast to generate life-of-mine revenue of $2.9 billion over the eight-year mine life, and $745 million in project free cash flow.
The upfront capital requirement is estimated at $296 million, which includes an additional $34 million for a paste fill plant that wasn’t outlined in the 2018 DFS.
About $234 million of the total cost will be spent on an improved processing plant and other site infrastructure, including the $34 million on a paste fill plant, and about $62 million will be spent for mining pre-production, tailings dam construction, site access and accommodation.
In today's ASX announcement, Develop said the project showed "very strong economics in a current inflationary market".
Mr Beament said they had conducted an exhaustive investigation of every aspect of the project.
“We questioned every element of the strategy, tested every assumption and invested substantial time and money in drilling, metallurgical work and cost estimating,” he said.
“We have significant experience in assessing, developing and operating projects while our mining services division has first-hand knowledge of the latest costs and productivity parameters.
“The end result is a highly strategic mine plan and a detailed project assessment designed to minimize the risks and maximise the opportunity at Sulphur Springs.”
Develop said it would now explore project off-take agreements, project financing and pre-develop activities.
The company also has a stake in the Whim Creek copper and zinc exploration project 115km south-west of Port Hedland.
It also aquired the Woodlawn zinc and copper mine in NSW after it was put on care and maintenance.
Develop’s shares were up 2.06 per cent to $3.46 at market close.