Develop Global (ASX:DVP) has awarded GR Engineering Services (ASX:GNG) a $25.7 million contract to upgrade and recommission the Woodlawn Zinc-Copper Project processing plant in New South Wales.
GR Engineering is currently mobilising to site to conduct the plant upgrade and prepare for recommissioning.
The contract will continue for a one and a half-year period or until the work is completed.
Managing Director Bill Beament says completing the Trafigura documentation means Woodlawn is fully funded through to production.
“We have contracted processing specialists GRES to upgrade and recommission the Woodlawn plant and we have already resumed underground development to ensure we are well ahead of the schedule,” Beament says.
Develop Global, which has a market capitalisation of $509.65 million, says awarding the contract has triggered the $20 million final investment decision milestone payment with the Woodlawn project vendor, OMF Fund (Orion).
As a result, Develop Global will pay up to $20 million, comprising half in cash and the rest in shares at $2.08 per share, to Orion.
Develop Global will now be placing five million shares to existing shareholders on issue, at $2 per share to cover the cash component that is required to be paid.
Argonaut Securities acted as sole financial advisor.
The anticipated date of settlement of the new shares is on or about 27 September 2024.
Develop Global notes that underground development at Woodlawn resumed in August 2024, in preparation for ore production mining to begin early next year.
Woodlawn is on track for first production and cash flows in mid-2025.
The Woodlawn Project is a high-grade zinc-copper-lead-gold-silver project that lies in the Lachlan Fold Belt of New South Wales. The Woodlawn mine operated from 1978 to 1998 and processed 13.8 million tonnes of ore from the open pit, underground and minor satellite deposits.
GR Engineering Services is a process engineering consulting and contracting company that provides engineering design and construction services to the mining and mineral processing industries.
Develop Global is a diversified mineral explorer and emerging producer. Its base metal projects has a total resource of 27.7 million tonnes at 1.3% copper, 5.9% zinc, 1% lead, and 31.2 grams per tonne silver containing more than 360,000 tonnes of copper metal and 1.6 million tonnes of zinc metal.
Write to Aaliyah Rogan at Mining.com.au
Images: Develop Global
