Develop is already the underground mining contractor for Bellevue Gold’s namesake gold project in Leinster, near Kathleen Valley, and recently formed a joint venture with the region’s traditional owners, Tjiwarl Contracting Services, which is aimed at securing contracts on Tjiwarl country.
The company was known to have been tendering for the Kathleen Valley contract but announced today it had withdrawn from the second round of the process.
Develop said the decision reflected the increased volume of work which will flow from a successful completion of its proposed $152.6 million acquisition of lithium developer Essential Metals and the forecast labour requirements at its own projects.
It comes after a busy quarter in which the company advanced plans for a restart of the Woodlawn zinc-copper mine in New South Wales and released an updated reserve and definitive feasibility study for the Sulphur Springs zinc-copper project in Western Australia.
Develop said there had been a significant expansion of the scope of the Liontown contract between the first and second rounds, which did not fit the company’s mining services business model.
The company said it had been receiving strong inbound inquiries from mining services clients, with discussions progressing with several potential clients for projects set to begin in late 2023 or early 2024.
Develop continues to ramp up at Bellevue, which is on track for first production in the December quarter, with 2964m of underground development completed in the June quarter, up 13%.
Contract revenue for the quarter was $23 million, up 20%.
Further month-on-month increases are expected following the recent arrival of a fourth development crew.
Develop had $21.8 million cash at June 30 but has since announced a $50 million capital raising associated with the Essential transaction.
If successful, Develop expects to close the Essential deal in October, while the new life-of-mine plan for Woodlawn is also due this quarter.
“We made huge progress towards our strategic goal of becoming a significant supplier of metals for the energy transition,” Beament said.
“Woodlawn gets better with every hole we drill. The results from drilling outside the resource were absolutely outstanding and highlight the huge upside at this project.
“We also changed the whole strategy and outlook for Sulphur Springs. By starting with an underground mine rather than an open pit, we have completely rewritten the financial forecasts while significantly de-risking the project.
“And we moved to add lithium to our stable of energy transition metals with the Essential agreement. This is aimed at using Develop’s technical, operational and financial strengths to unlock the value of the Pioneer Dome lithium project in WA.”
