“Develop is creating the next IGO with Mineral Resources’ capability,” Beament said after announcing Develop’s agreed A$152.6 million acquisition of Essential Metals, the owner of the Pioneer Dome lithium project in the lithium “alley” south of Kalgoorlie.
Given the respective $12 billion and $14 billion market caps of IGO and MinRes, Beament was making the pitch that his 30% owned Develop (fully diluted) is on its way to bigger things than its pre-Essential bid market cap of $625 million would suggest.
Beament has a record of achieving super-charged growth, having taken Northern Star from a single-asset gold company to the $9 billion number two producer on the ASX in under 14 years before moving on in 2021.
Develop (formerly Venturex Resources) became Beament’s vehicle to make his return to the world of ASX-listed miners and MinRes has been with him since his arrival, with its stake now standing at just under 13% and having come from Northern Star post-Beament’s exit.
Adding a lithium leg to Develop’s current MinRes hybrid-style portfolio of the Woodlawn and Sulphur Springs zinc-copper projects, and its underground contract mining division, puts Develop on a bigger growth pathway, and it is clear MinRes is on board for the journey.
MinRes is in a position to make the Essential bid happen. It acquired a 19.55% stake in Essential in April in opposition to a $136 million takeover bid for Essential by the Tianqi/IGO lithium partnership. It is now rolling that stake into Develop’s takeover bid.
It is kind of curious as MinRes is the established big-time lithium producer on the northern end of the lithium alley south of Kalgoorlie from the expanded and growing Mt Marion lithium project (72Mt at 1.37% lithium), a 50:50 joint venture with China’s Ganfeng.
The current resource estimate for Essential’s Pioneer Dome deposit, about 75km south of Mt Marion, is 11.2Mt at 1.21% lithium with exploration upside. It is a handy resource but not a game-changer for Mt Marion.
But MinRes’s blocking action against the IGO/Tianqi partnership – they are partners with Albemarle in the mighty Greenbushes lithium mine (178Mt at 2% lithium) on the southern end of the lithium alley – and its support of Develop’s acquisition of Essential, indicates it wants to be master of lithium flows in the region, potentially in support of establishing a lithium refinery to capture the conversion margin for battery ready lithium material.
Having Develop come in as the developer of Pioneer Dome rather than move on Essential itself is a nod to Develop’s can-do mining contract division, currently limited to a $400 million underground mining contract at Bellevue’s soon-to-produce namesake gold mine.
That nod was also reflected in comments by Essential managing director Tim Spencer on why the in-demand Essential had decided to go with the Develop bid.
He said the company took into consideration a range of factors including the ability for Essential shareholders to participate to the benefits of the enlarged Develop through the scrip offer. Notably, those benefits included Develop’s “world-class mining team, funding capability and ability to fast-track the Pioneer Dome asset through to production”.
Read more at https://www.miningnews.net/barry-fitzgerald/opinion/1455550/beament-and-ellison-pony-up-at-essential
