Develop Global Raises A$180m to Supercharge Copper and Zinc Growth
Develop Global Limited has launched a A$180 million equity placement to fast-track production and extend mine life at its Woodlawn and Sulphur Springs projects, positioning itself as a leading copper and base metals player on the ASX.
- A$180 million institutional placement at $4.50 per share
- Woodlawn Copper-Zinc Mine ramping to 850ktpa with potential to reach 1.0Mtpa
- Sulphur Springs underground decline development commenced ahead of schedule
- Mining services division generating approximately A$200 million revenue in FY25
- Equity raise to fund growth, mine life extension, and partnership opportunities
Strategic Capital Raise to Accelerate Growth
Develop Global Limited (ASX – DVP) has announced a significant institutional equity placement aiming to raise approximately A$180 million at an offer price of $4.50 per share. This capital injection is designed to accelerate the company’s growth trajectory across its core copper and base metals assets, notably the Woodlawn Copper-Zinc Mine in New South Wales and the Sulphur Springs Zinc-Copper Project in Western Australia.
The placement, representing about 14% of existing shares, is not underwritten, introducing some uncertainty around the final amount raised. However, the funds are earmarked for critical initiatives including early pre-production capital at Sulphur Springs, ramping up production at Woodlawn, extending mine lives to a targeted 15 years, and providing financial flexibility to pursue strategic partnerships and growth opportunities.
Woodlawn Mine – On Track for Production Growth
Woodlawn is currently ramping up to an 850,000 tonnes per annum steady-state run-rate, delivering approximately 22,000 tonnes per annum of copper equivalent metal. Encouraging early mining data suggests the potential to increase throughput to 1.0 million tonnes per annum. The existing mine plan is based on a 10-year life, but ongoing in-mine resource extension drilling aims to extend this to 15 years, underpinning the company’s long-term production outlook.
Operational milestones include advanced commissioning of the concentrator, with saleable copper and polymetallic concentrates already produced and shipped. Underground development is progressing ahead of schedule, with monthly development rates exceeding targets and initial stope production delivering strong extraction results.
Sulphur Springs – Accelerated Underground Development
At Sulphur Springs, the company has commenced underground decline development earlier than planned, targeting a depth of 350 meters below surface to access the majority of reserves and resources. This accelerated approach is expected to enhance future mine productivity and establish key drill platforms to aggressively grow resources and reserves through exploration.
The June 2023 Definitive Feasibility Study outlined a production profile of around 30,000 tonnes per annum copper equivalent from underground mining alone. The accelerated decline development and bottom-up mining approach are anticipated to improve mining efficiency, reduce risks, and potentially increase the project’s net present value.
Mining Services Division and Growth Flexibility
Develop’s mining services division is a substantial contributor, forecast to generate approximately A$200 million in revenue for FY25. The division is actively pursuing new contract opportunities, which could further enhance revenue streams in FY26 and beyond.
The equity raise also provides the company with capital flexibility to capitalize on partnership opportunities across its mine ownership and mining services businesses, leveraging its proven operational capabilities and extensive underground mining expertise.
Risks and Market Context
While the capital raise and operational progress position Develop Global for growth, the company acknowledges risks including dilution from the placement, operational uncertainties at Woodlawn and Sulphur Springs, commodity price volatility, environmental and regulatory compliance, and competitive pressures in mining services. The placement discount of around 6% to recent trading prices reflects market conditions and investor appetite.
Develop’s assets stand out in the ASX copper and base metals sector, with significant resource and reserve bases compliant with the JORC Code, and projects fully permitted for operations. The company’s strategy to extend mine lives and expand production capacity aligns with growing demand for copper and zinc in the energy transition.
Bottom Line?
Develop Global’s A$180 million raise sets the stage for accelerated growth, but execution risks and market volatility remain key watchpoints.
Questions in the middle?
- Will Develop secure the full A$180 million given the placement is not underwritten?
- How quickly can Woodlawn increase production beyond the current 850ktpa target?
- What impact will commodity price fluctuations have on Sulphur Springs’ project economics?