Consensus community valuation
Develop announced their results indirectly via their Annual report with EBITDA 10.4m (-11.8+22.2)
Develop has the right commodities with copper, zinc and especially silver which is going up but the sellers still come out at the closing auction when I observe the recent price action.
[held]
Material enough for a trading halt?
Trying not to hope for too much here given the fall yesterday
(Held)
Did DVP post their final year results unannounced?
From Yahoo Finance
Apparently EBITDA positive of nearly 9m which was a bit unexpected.
Meanwhile DVP put up their latest presentation showing Pioneer Dome will be developed before Sulphur Springs
Probably why the share price fell given Lithium is now in a bear market.
Might be too late to walk back the presentation
[held]
Maybe another reason for the poor share price are the share options outstanding
A few days ago Blackiston excised his 1.4m 75c options DVPAY
But there's still a heap left and DVPAA expired last week
Wonder if the weird trading is from all these options floating around?
[held]
Monday 13th May 2024: Having a look at Bill Beament's Develop Global (DVP) again today, which I do hold (both here and IRL) and they are making steady progress towards their objectives. Cornerstone shareholder MinRes (MIN) sold their 14% stake in DVP around this time last month, and Bill Beament has increased his own stake in DVP to 15.08% (held through his company Precision Opportunities Fund). Chris Ellison's MinRes was under pressure to reduce MIN's debt levels, so there have been some "non-core asset" sales, including having 49% of MIN's dedicated 150-kilometre private haul road corridor in the Pilbara up for sale - the road connects MinRes’ Onslow Iron project at Ken’s Bore mine to the Port of Ashburton on the northern WA coast.
But back to DVP: Here are their latest announcements and presentations:
08/05/2024 8:23 am: DVP-Investor-Presentation-Pathway-to-Positive-Cashflow-May-2024.PDF(11 pages, market sensitive)
07/05/2024 8:24 am: Updated-Pioneer-Dome-Scoping-Study-(DVP).PDF (38 pages, market sensitive)
24/04/2024 8:24 am: DVP-March-2024-Quarterly-Activities-Report.PDF (18 pages, market sensitive)
24/04/2024 8:23 am: DVP-Quarterly-Appendix-5B-Cash-Flow-Report-March-2024-Qtr.PDF (5 pages, market sensitive)
From the Investor Presentation:
If you're not into Mining Services, copper, zinc and to a lesser extent lithium, then this one won't be for you, but with Bill Beament running this company, there's every reason to expect the company to be highly successful in future years, and he's done a reasonable job so far, since he left NST to head up Venturex, renamed the company ("Develop Global") and built up this portfolio of mining services clients and base metals and lithium projects.
I rarely buy into early stage companies like this - i.e. at this point in their history - however I'm happy to make an exception when we've got Bill Beament running the show. He has a truly exceptional track record.
Further Reading:
MinRes sells Develop Global stake; Bell Potter on the ticket (afr.com) [08-April-2024]
First-round offers in for MinRes $1b pit-to-port haul road sale (afr.com) [06-March-2024]
(25) DEVELOP: Overview | LinkedIn
Q+A: Aussie mining legend Bill Beament talks stonker copper hits and facing the future - Stockhead [17-May-2023]
Bellevue Gold Develops $400m contract - Australian Mining [14-April-2022]
MinRes awards Mount Marion decline contract - InvestMETS [01-Dec-2023]
Develop achieves five-year business plan - Australian Mining [22-March-2024]
Mining Services set to generate c.$175m Revenue - Develop Global Limited (ASX:DVP) - Listcorp. [21-March-2024]
09-April-2024: MinRes sells Develop Global stake; Bell Potter on the ticket (afr.com)
Disclosure: I hold MIN and DVP shares. I think that this does remove an overhang, and if zinc, copper and lithium prices rebound, DVP's share price will likely rise significantly from current levels. It may not happen overnight...
21-March-2024: Mining-Services-set-to-generate-c$175m-Revenue.PDF
22-March-2024: Resource-Upgrade-Paves-Way-for-Funding-Production-Strategy.PDF
The market is having a dummy spit today, despite new record highs in the USA overnight, and DVP has traded so far today in a range between $2.37 and $2.41 compared to yesterday's close of $2.40. They closed up just 1 cent (+0.42%) yesterday and they look to be in a shorter term uptrend within a longer term downtrend on this chart below, but they look worse on a 3 year chart (further down, below the MIN chart).
They have recently been making higher lows and look to forming a "pennant" which I think they are more likely to break out of to the upside than the downside, but a lot of that will depend on sentiment. DVP are a bit of a hybrid type of company in that they are part mining services and part mining (mine owners and operators). Their MD, Bill Beament, has done both in previous roles, working for mining services companies before moving into mine ownership and management with NST (Northern Star Resources) which he took from nothing through to being a multi-billion-dollar company and Australia's second largest gold mining company at the time he left (July 2021).
DVP should be trading with a good management premium because of Bill, however mining services as a sector is not particularly sexy in the eyes of the market at this point, and the types of metals and minerals that dominate DVP's various mining projects (lithium and base metals mostly, like zinc) have also been "on the nose".
The market, and in particular funds and brokers, also tend to dislike uncertainty, so they do prefer to deal with companies that just do one thing and do it well, rather than a mining and mining services hybrid like DVP. For reference, that's exactly what Mineral Resources (MinRes, MIN.asx) is, and MIN's SP has tended to trend well both up and down as sentiment waxed and waned.
Typically, in a calendar year, you'll see between one and two uptrends and between one and two downtrends only, which was the case in both 2021 and 2022, however 2023 was different because MIN were in a downtrend for the entire calendar year, except for the first few days of January and the bulk of December '23 where their SP was rising, but arguably still within that wider downtrend as I've shown there. You could also argue that they're trading sideways right now within a $58 to $70 band, but I prefer to think they've re-entered another uptrend. Time will tell. Everyone has an opportunity to be an expert with the benefit of hindsight.
DVP has also trended nicely both up and down, but mostly down during the past 14 months:
And they've broken to the downside out of a channel that was already heading down, so sentiment is very bearish on DVP clearly.
I personally see this as an opportunity, based almost entirely on Bill Beament and his exemplary management skills and prior track record at NST. When he first took over NST and they had just the one mine (Paulsens), Bill showed incredible patience and foresight, waiting until the right time to embark on M&A to grow the company. He never overpaid for assets and he tended to focus on organic growth when the gold price was rising and sentiment was bullish, and on acquisitions when the gold price was falling and sentiment was bearish. In other words, he followed Buffett's advice in relation to being "Fearful when others are greedy, and be greedy when others are fearful.” - except in Bill's case it wasn't fearful when others are greedy, it was patient. He bought assets when the price was good and he knew that he - and his company - could add significant value to those assets. It was his mining services background that gave him a real edge in relation to knowing just how much more efficient the actual mining and processing could become in every scenario. He also surrounded himself with capable and well-incentivised people, something that he is clearly doing again at Develop.
I believe that accumulating DVP shares at current levels will prove to be a profitable move down the track, so I hold DVP both here and in my real money portfolios as well.
From March 18th, 2024, Develop Global (DVP) and the 13 other companies listed in the table below will all be added to the ASX300 Index - which is important for people such as myself who have their SMSF within an industry fund (CBUS, AustralianSuper, HostPlus, etc) or for any other SMSF where the rules only allow the additions of ASX300 Companies, so they prohibit the inclusion of any company that is not in the ASX300 or above (ASX200, ASX100, etc.). This restriction generally does NOT apply to fully self managed SMSFs where you arrange the auditing of the fund yourself, but does apply to those within industry super funds and a few other low-cost SMSF providers/facillitators that have the same restrictions.
Full announcement: SP-DJI-Announces-March-2024-Quarterly-Rebalance.PDF
I've been waiting for GNG, LYL and XRF to be added to the ASX300, but I'll have to wait longer clearly. The criteria isn't just based on the company's market capitalisation (m/cap), it's also based on the "free float", so the amount of shares that is nominally available to trade excluding shares held by insiders (Board and Management, Founders) and long-term institutional (insto) shareholders. This means that companies like GNG & LYL, where the Board, Management and Founders own 55% and 36% of the company respectively, and insto's own another 15% and 26% respectively (leaving a "free float" of just 30% of their SOI [shares on issue] for GNG and 38% of their SOI for LYL), will have to grow their market caps further than most other companies before being considered for inclusion in these indicies - due to their relatively small "free floats".
It will be good to be able to add DVP to my SMSF from March 18th anyway.
09-Feb-2024: Develop-Global-DVP-Investor-Presentation-09Feb2024.PDF
[Above: Slide 4, Below: Slide 16]
Disclosure: I hold DVP shares both here and in my largest real money portfolio.
29-Jan-2024: I was talking over the weekend about quarterly reports over in the gold forum - see here - and today we got DVP's FY24 Q2 Reports: DVP-December-Quarterly-Activities-Report-29Jan2024.PDF and DVP-Quarterly-Appendix-5B-Cash-Flow-Report-December2023-29Jan2024.PDF
Firstly - here's the first page of their activities report:
I like that Bill is calling out the opportunity that he sees in "the softness in some parts of this market" - Agreed - there's nothing like buying at or near the bottom, if indeed this is at or near the bottom. Let's hope it doesn't turn out to be "nothing like" the bottom.
After all, Bill did make a name for himself by buying decent gold projects with plenty of turnaround potential at low points in the market (at NST) and then turning those projects around - increasing their profitability by reducing their costs while increasing productivity. It was his background in mining services - before he got into gold mine management - that enabled him to be able to think like that and allowed NST to achieve the success that they enjoyed while he was at the helm.
Speaking of bottoms, it would be good if last Tuesday was the bottom for the DVP share price, but you know what they say about trying to pick bottoms...
Technically they're probably still in a downtrend despite that +11.4% bounce today after rising +10.3% on Thursday - the DVP share price is up by just over +23% since last Tuesday - in 3 trading days - but their chart (above) still looks nasty...
I also liked this:
Note they "only" have 22 quarters (5.5 years) of available funding ($32.5m cash/cash equivalents plus $41.7m in unused finance facilities = $74.2m) based on their December Quarter cash burn (of $3.35m).
Yeah, I can see why the market MAY have considered today that DVP appeared to be oversold and was due for a minor positive re-rate; but... will they go on with it, or fall back and resume that downtrend... ? That is the question...
From The Helm - With Bill Beament, Managing Director of Develop - YouTube [19-Dec-2023]
Bill Beament, Managing Director of Develop - YouTube [24-May-2022]
Bill Beament, Can He Do It Again? | DVP.asx | Mining News - YouTube [27-April-2023]
Yes, I believe he can!
Disclosure: Yes, of course I hold DVP shares! It's Bill Beament!
New addition on Develop website
Also a big thank you to whoever moved the shares down to $2.78 at the open as my order finally got filled after sitting there for months (bot trading??).
Time will tell if that seller made the right decision as it looks like there is clearly lots happening at Develop
[held]
01-Dec-2023: Develop-Awarded-Mt-Marion-Lithium-Underground-Development-Contract.PDF
Develop Global Limited (DVP.asx) is pleased to announce that it has been awarded a A$46 million underground development contract to establish and develop an exploration decline at the Mt Marion lithium mine in WA.
Mt Marion, which is a joint venture between Mineral Resources Limited (MinRes, MIN.asx) and Ganfeng Lithium Co. Ltd, is located 40km south-west of Kalgoorlie. It is also 95km from Develop’s Pioneer Dome Lithium Project.
The contract has a term of 18 months and is expected to start in early 2024.
The key works to be completed by Develop under the contract include:
- Surface facilities to support underground mining activities
- Portal Establishment
- Installation of underground mine infrastructure
- Excavate underground capital development and exploration drill platforms
- Develop through the orebody underground to obtain important geological and operational data for future mining activities
- Set up the underground for an extensive diamond drilling campaign to grow the maiden underground resource of 9.5Mt at 1.52% Li2O (see MIN ASX release 22 September 2023)
Develop Managing Director Bill Beament said, “The award of this contract to Develop is a significant vote of confidence in our world-class underground mining team.
“We have built a world-class underground mining team with immense experience in developing and operating underground operations, especially in WA.
“The strength of this team is shown by the outstanding results we are generating at the Bellevue gold mine, where the project is running on time and on budget.
“The Mt Marion contract is consistent with our stated strategy of securing two to three contracts within our mining services division.
“Our team is eager to make a significant contribution to the Mt Marion project by applying its extensive skills and experience to the underground development”.
--- ends ---
This contract award was widely expected - as the MoM (Money of Mine) podcast boys discussed earlier today - see below, so it didn't move the share price - in fact DVP closed -4.58% lower (14 cps down) at $2.92/share this arvo, and MinRes (MIN) closed down -0.93% (-57 cps) at $60.60/share as lithium names continued to slide - along with lithium prices.
Source: MarcusToday.com.au [MT don't include DVP in that graphic, but MIN is there in the "Lithium" section as well as in the "Mining Services" section, but not under "Iron Ore" despite Iron Ore being MIN's second largest revenue earner, behind Mining Services (mostly iron ore crushing, loading & hauling); MIN do not currently earn any revenue from lithium as their lithium mines are not producing anything yet - Wodgina was, but it's been on C&M - Care & Maintenance - so hasn't produced any spod for a couple of years now due to low spodumene prices. MIN has substantial lithium assets, they're just not producing assets at this point. Their revenue right now comes from mining services, iron ore, and probably a little from energy/gas as well.]
In Today's "Money of Mine" Podcast...
Who’s Failing AGM Season? + Don’t Believe the “Substantial” Hype | Daily Mining Show - YouTube
... the boys did discuss this contract award, at the end...
0:00:00 Preview
0:02:04 The key link in TG6 History
0:04:38 How is mesh made?
0:08:30 AGM strikes
0:11:32 Euro Manganese funding announcement
0:16:19 Ballarat Gold Mine swallowed up by Acheron Capital
0:18:19 Aus Super buying PLS
0:21:35 Orecorp deal update
0:24:45 Wild Magnus AGM scenes
0:27:29 Develop get Mt Marion contract
Click on that image above of the lads discussing Develop and MinRes to go straight to that part of today's podcast.
And if you're into lithium, they have discussed lithium every day over the past week, except for Monday - which was all about West African Gold.
Friday 24th November 2023:
Inside the AVZ’s Shareholder Meeting | Daily Mining Show - YouTube
0:00:00 Introduction
0:01:58 Turning shit ground into good enough ground
0:06:58 AVZ shareholder's day in the sun
0:23:24 Which ASX companies don't like management's pay?
0:28:04 Does the Raw Materials Act impact ASX companies?
0:31:45 We share the Bald Hill acquisition details (as MinRes won't)
0:39:00 What's the latest from Cobre Panama?
Monday 27th November 2023:
African Gold M&A is all GO! | Daily Mining Show - YouTube
0:00:00 Preview
0:00:30 Introduction
0:01:05 How Junior Miners can get more bang for their buck
0:05:17 Perseus go substantial on OreCorp, getting in SilverCorps way
0:11:02 IER deems Zhaojin's bid for Tietto not fair & not reasonable
0:18:31 Turaco do a deal with Endeavour
0:20:05 Aeris rattling the tin for 30 bucks
Tuesday 28th November 2023:
The Koala on why Lithium is Iron Ore 20 yrs ago & the Mining M&A evolution - YouTube
(No relation)
0:00:00 Preview
0:02:39 Gina needs help breaking Iron Ore
0:07:53 Why Trav and the Koala like Twitter
0:24:54 M&A at the big end of town
0:37:44 Why was Freeport sold?
0:43:05 Reconciling views on trough EBIDTA
0:46:29 WA Lithium
Wednesday 29th November 2023:
(no, not me, another Koala)
0:00:00 Preview
0:01:35 Underground Mining Trivia
0:04:34 How real is DLE?
0:09:58 Metal Price Bifurcation
0:18:03 Shareholder Activism
0:23:44 Whitehaven alignment
0:34:23 BHP growth
0:47:03 Is the Copper boom going to happen?
0:48:22 The Koala on the Banking hampster wheel
1:05:02 Over Rated - Under Rated
Thursday 30th November 2023:
All You Need to Know About Lithium Brines with Joe Lowry - YouTube
0:00:00 Introduction
0:00:08 Preview to Mr Lithium
0:01:18 Recap of the Delta Lithium AGM
0:03:48 Flying with Brooks to South America
0:06:02 Jobs on offer at JP Search
0:08:20 Joe Lowry back on Money of Mine!
0:12:20 The 101 on lithium brines
0:17:06 Is water going to be an issue for DLE?
0:26:45 What is the waste product for a brine project?
0:31:15 What are the most misunderstood aspects of brine projects?
0:34:08 is SQM slowing down or ramping up?
0:36:55 Why is the Atacama special for brines
0:43:58 Where is China going to source its product?
0:47:38 What makes a good brine development project
0:51:58 Summing up Direct Lithium Extraction (DLE)
0:56:00 Who are the DLE tech players
0:57:47 Prelude to part 2!
Plenty on lithium and lithium miners in that lot!
And Friday's (today's) podcast is discussed and linked to further up (above all the others).
Disclosure: I hold MIN and DVP shares and I topped up both today on the SP weakness and the confirmation of this contract award. BTW, MinRes recently increased their stake in DVP to a bee's whisker under 14% (13.97%) - see here: Change-in-substantial-holding-from-MIN.PDF so nobody is taking over Develop Global without Bill Beament and Chris Ellison being onboard - as both of them have their own blocking stakes. I believe that the two companies will merge (MIN will aquire DVP) at some point in the future, and that Bill B will end up running MinRes when Chris is ready to step back or retire from frontline management. No guarantees, but that's what I reckon might be on the cards.
Not sure about that chart. I'm no technical analyst, but you could make an argument about a shorter term rally within a longer term downtrend, or you could say it's starting to form a pennant and could breakout either up or down from within that pennant as it gets closer to the pointy end. Or you could look at what Bill achieved at NST and just back the man and his new company. His track record of shareholder value creation is enviable.
Some unusual trading today with DVP shares which started down significantly at 3.15 before finishing up 3.36
Could be a bit of re-balancing going on for some funds.
[held]
Nero Resources Fund cuts DVP - 27 Sept (3.20)
Not sure what the thesis is behind the exit. It is not cap related as they hold Gensis Minderals which has a market cap of over $1bn so maybe simply thinks DVP is overvalued.
Bit of background:
Nero resources fund team - http://www.nerofund.com.au/team
Money of Mine podcast from the Nero Director Russell Delroy
https://youtu.be/do8JPnDI9VA?si=SHARU-32WHgf__7r
[held]
I'm sure lots of people would like to see a lower share price below $2 as mentioned by the BDO Independent Expert Report
Below is the reason why BDO still feels the merger is not fair due to their valuation of $1.73 published a few weeks ago.
Response from Bill Beament.
BDO’s recommendation, however, is based on a preferred post-deal value for Develop Global of just $1.73 a share, well under Friday’s closing price of $3.20.
Mr Beament, Develop Global’s managing director and an 18.3 per cent shareholder, unleashed on BDO, questioning the gap between its valuation and the market price.
“Please tell me where I can buy Develop shares at $1.73,” he said.
“I have spent more than $10 million buying Develop shares in recent months and I paid up to $3.20 a share. And I certainly believe that I got more than fair value. It was great value.”
Market was switf to respond to the latest repeat announcement today, sending shares up $3.46 ( 10%)!
Was good accumulation under $3 while it lasted. My post valuation merger still stands at 3.25.
[held]
Recent application grants to Develop at Sulphur Springs marked in light blue (E 4506033, E 4506034)
Purple dots are Lithium occurences which happens to be Pilgangoora. Dark yellow is copper. Bright yellow is gold.
Don't know what the filled shapes represent but I know they are different types of bedrock.
[held]
06-Aug-2023: Update on DVP from Euroz Hartleys here: dvp-040823.pdf It was published on July 28th and distributed by the ASX on Friday (4th August). I've reproduced the first page below:
Disclosure: I do not hold DVP shares at this point in time, but I probably should...
Wednesday 26th July 2023: INSIDER MAGAZINE: Bill Beament on life outside of mining and Develop Global | The West Australian
Plain Text Link: https://thewest.com.au/business/insider/insider-magazine-bill-beament-on-life-outside-of-mining-and-develop-global--c-10894035
We put Develop Global’s managing director Bill Beament in the hot seat to ask ...
What’s the best financial advice you’ve ever been given?
My old man was very adamant on this one. If you’re paying tax then you’re making money, and you’re making a contribution to everything else in society too. I’m paying a fair bit of that (tax) right now.
How do you manage a work-life balance?
I really do believe this is a hard one. I don’t think I’ve come across anyone in similar type roles in the past 15 years that gets the balance right.
A very wise, old and extremely successful entrepreneur told me last year at lunch: in your career you have spurts and steady periods, and in those steady periods, get that time with your loved ones.
What’s something that others have underestimated about you?
I think my energy, it catches people out. Those that have worked with me get it ... I’m like the Energiser bunny, I never say die. I’ve got a pretty big battery, that’s what my fiance says to me — she can’t keep up.
What drives you to succeed?
I just love the mining industry and I love the people in it, and I love seeing them develop and also succeed in all areas of life that goes with it. That’s been a big driver in the last seven or eight years of my career — watching the next generation of CEOs and entrepreneurs come through. For me, it’s never been about money.
I also love challenging the status quo and making a difference in the industry ... I love it when someone says I can’t do something, it’s like, I’ll find a way.
Beament with his Dad’s personal number plates. Credit: Ross Swanborough/The West Australian
Favourite holiday destination?
Being with my family and my loved ones is first and foremost and then it has to be the Duke of Orleans caravan park east of Esperance, where I grew up. I love that place.
I took my kids seven years ago on a big fancy holiday around America and Europe — it was an expensive bloody holiday, and a year later I said, ‘What’s your favourite holiday?’ and they said, ‘Out the Duke, Dad’.
Chocolate or cheese?
Both, and with a nice Italian red.
What are you binge-watching right now?
I’m watching Below Deck and I reckon it’s the best trash TV I’ve seen in a while. You can miss an episode and pick up where you left off, it’s fantastic.
Read any good books lately?
I failed English in high school so I actually hate books and don’t read them.
If you were to invite three dinner guests, dead or alive, who would they be?
Richard Branson first, I’ve always followed him — I just think he’s an amazing entrepreneur. I’d throw Kerry Packer in there and Margaret Thatcher.
What was the last band you paid to see?
Eskimo Joe.
Childhood hero?
My Dad and my Mum. Dad was a mechanic by trade and Mum was a house mum and housewife, but Dad ended up being a bit of an entrepreneur with his mechanical side and the rest is history.
Dad took great care to buy the best ute available at the time for his purposes, which I took out of the estate. It has personal number plates from the small region where I grew up (Condingup), just east of Esperance.
Who would play you in the movie of your life story?
Probably Tom Hanks; I grew up watching him. He can do any role and looks to be a genuine, nice guy.
--- end of excerpt ---
Here's a link to Google Maps showing Condingup (where Bill grew up) and his favourite holiday destination - the Duke of Orleans Caravan Park.
Duke of Orleans Bay Caravan Park - Google Maps
Nice part of the world!
Could be a bit chilly on the South Coast at this time of year, but a fair destination for a summer holiday for sure!
Interesting insight into the man who built up Northern Star Resources from scratch to become Australia's second largest gold mining company and is now back in Mining Services (where he started before NST) - building up Develop Global (DVP).
Adding further to my theory of labour shortages in my South32 straw on Cannington Underground Mine.
Develop made a couple of key appointments who were former employees of Northern Star and Barminco back in November 2021.
Also it is already probable Northern Star experienced labour shortages as a result of the above key appointments of former NST employees.
While there's no proof key staff at Cannington or Golden Grove (29Metals) got headhunted by Develop, it is hard not to ignore the correlation of Develop having hardly any report of labour shortage and other underground mines being short staffed.
[held]
Selling has dried up from Endurance RP
This may explain why the shares have been trending upwards and bucking the wider market.
Their ETF-like sells seem to have not been properly timed which means there is probably something fundamentally wrong with this Venture Capital firm.
https://www.endurancerp.com/ICMServlet/download/13-2629-4273/eAnn_Disposal%20of%20DVP%20Shares.pdf
There are still some more shares to sell after they excised some options, so it is possible the downtrend could happen again soon.
[Held]
Michelle Woolhouse buys more shares.
But the big twist is she resigned her directorship in October
If this isn't confidence then I don't know what is...
[held]
Map of the Woodlawn site from NSW Planning Portal submitted by Heron Resources.
Now the suspicions from Keith et al. that were spread during the Diggers conference seem justified that parts of the underground workings crosses the void and hence might not be good mining conditions.
From the presentation can see the mine void and lenses although quite small:
Close up (bit hard to see where the void is where Veolia is tipping the waste)
New drill drive (perhaps to get around the void)
So from the above slides, I believe Bill is aware of the problems faced (in my opinion). DVP will conduct a tour of the site with major investors and hopefully have a more detailed plan on addressing the "rumours"
Also note the project was acquired for 34m but a total of 340m was spent by previous owners.
As usual I could be wrong and Keith, TTC and Datt could be correct. In which case myself and Beament take the loss and eat humble pie.
DYOR.
[held]
On face value, the Woodlawn mine acquisition appears to be a bargain for Develop which includes significant pieces of infrastructure including 1Mtpa plant and a state of the art ISAMill developed by Glencore for extracting ore from tailings (mentioned many times during the Heron conferences). Initial payment of $30m to be made through cash and equity raising.
For some that do not know, Heron Resources went into administration after trying to ramp up production operations at the Woodline zinc-copper mine. Heron's haphazard approach to extract Zinc/Copper from both development ore and tailings as they worked towards the high grade lens to generate cashflow combined with mismanagement within the company and with their subcontractor Sedgman/CIMIC was all part of Heron's undoing. Heron spent $300m in total developing the project
Bill is coming into this project with a totally new approach. This includes more drilling in depth to find the extent of the orebody which was not done properly by Heron. More importantly, he is continuing to put the mine in care and maintenance and has not set a date to restart production to try and preserve capital until he can expand the deposit further.
If Bill is right and the deposit expands, Develop needs to make upfront payments of 12.5m for 550Kt of ZnEq and 5.5m for 750Kt of ZnEq contained resources. Then further payments will be made for final investment decision (20m) and continuous production for 18 months (30m).
Overall it looks like the deal is fair as Bill is making payments only if milestones are achieved. And if things don't turn out as planned, then the upfront payment payment is written off at the minimum.
Webcast link - https://webcast1.boardroom.media/watch_broadcast.php?id=620c9a0e1c785
Disc: Held (on the fence with taking my entitlement)
FYI: thanks for putting me back as premium member, will try and type a bit more now :)
