Australian mining firm Develop has agreed to purchase the Woodlawn copper project in New South Wales (NSW) in a $21.5m (A$30m) transaction.
Develop will acquire the Woodlawn underground mine and processing plant that was redeveloped with a $243.8m (A$340m) investment by Heron Resources, which entered voluntary administration in 2021.
The project, however, was placed on care and maintenance in 2020, owing to ramp-up challenges and Covid-related issues.
Develop has signed binding cooperation deeds with Nomad, Orion, and Castlelake, who jointly hold more than 50% of the total claims value against Heron.
These creditors have agreed to support Develop’s deed of company arrangement to acquire Heron.
The deal includes an upfront consideration, which comprises a $10.7m (A$15m) cash payment and $10.7m (A$15m) worth of Develop shares, to Heron’s creditors.
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It also comprises success-driven milestone-related payments of approximately $50.3m (A$70m) in cash or shares to Orion.
Develop managing director Bill Beament said: “Woodlawn hosts future-facing metals in a tier-one location and meets all our criteria for creating shareholder value.
“It is a substantially developed project with extensive underground infrastructure and a new processing plant. The geology is first-class, with a VMS system, which is under-explored and open in a number of areas.
“We are very confident that we will be able to grow the inventory rapidly by extending the key lenses using underground drilling.”
Develop expects the acquisition, together with its Sulphur Springs copper/zinc/silver project in the Pilbara, to transform the firm into a major base metals group with future-facing metals in tier-one locations.
Discovered in 1969, the Woodlawn deposit was operated under various owners from 1978 to 1998.