- Develop Global (DVP) Acquires Woodlawn Zinc-Copper Project in New South Wales for $30 Million
- DVP says it is an ‘exceptional’ opportunity as its ‘world-class geology’ hosts forward-looking metals in a prime location and the price is a fraction of previously invested capital
- To fund the acquisition, the company launched a $50 million capital raise, including a placement and rights offering of approximately 15.2 million shares at $3.30 each.
- Once acquired, Develop Global will initially focus on growing the mineral resource inventory through underground and infill drilling
- DVP suspended its shares and last traded at $3.17 on February 16
Develop Global (DVP) has agreed to acquire the Woodlawn zinc-copper project in New South Wales for an initial consideration of $30 million.
The underground mine and processing plant at Woodlawn was developed by Heron Resources who invested $340 million in the project before it was put into care and maintenance in 2020, and Heron was placed into administration in July from last year.
Develop Global said the acquisition aligns with its growth strategy and meets its desired criteria, including being a zinc-copper asset in a “prime” location, world-class geology and “exceptional value.” » silver with a purchase price lower than 10% of the capital previously invested.
The initial consideration of $30 million includes a cash payment of $15 million and $15 million of DVP stock. Additionally, the purchase comes with milestone payments of up to $70 million, based on success.
Chief Executive Bill Beament said the acquisition was an “exceptional” opportunity.
“Woodlawn hosts forward-looking metals in a prime location and meets all of our criteria for creating shareholder value. This is a significantly expanded project with extensive underground infrastructure and a new processing plant,” he said.
The project has a JORC resource of 18.2 million tonnes at 9.8% zinc equivalent, including a high-grade underground resource of 7.4 million tonnes at 15.2% zinc equivalent.
It also has a JORC reserve of 12.4 million tonnes at 7.8% zinc equivalent, which includes a high-grade underground reserve of 3.1 million tonnes at 13.1% zinc equivalent.
Once acquired, Develop will initially focus on growing mineral inventory through underground drilling. It will also undertake infill drilling to upgrade inferred resources and target existing electromagnetic conductors.
“The potential for creating value for our shareholders through inventory growth is enormous,” Beament said.
To fund the acquisition, Develop Global is launching a placement and institutional law offering to raise $50 million.
The placement will seek to raise $25 million through the issuance of 7.6 million shares at $3.30 each, representing a 4.1% premium to Develop’s last traded price of 3, $17 on February 16.
The remaining $25 million will be raised through the accelerated one-for-18.6 non-waiver rights offering of approximately 7.6 million shares.
Importantly, Bill Beament, who owns a 16% stake in the company, and Mineral Resources, who owns 15%, will take all of their rights, totaling $8 million.
Develop placed its shares on hold from trading ahead of the announcement and expects to resume trading no later than Monday, February 21.
The shares last traded at $3.17 on Feb. 16.