Copper and zinc miner Develop Global Ltd (ASX: DVP) says an updated study for its Sulphur Springs project in Western Australia's Pilbara region shows it is set to generate "outstanding financial returns".
The miner, which also operates the Woodlawn copper and zinc mine in New South Wales, stated in a release to the ASX on Thursday that an updated feasibility study for Sulphur Springs showed a significant increase in the project's net present value, up 76% to $921 million.
The project is now expected to generate revenue in the order of $3.4 billion, up 18% on previous estimates, and would cost $329 million to bring into production, up 11%.
Develop Global shares were trading 6.8% higher at $4.47 on the news on Thursday, with the company valued at $1.38 billion at the close of trade on Wednesday.
Mine almost ready to go
The company stated that the Sulphur Springs project had obtained all necessary major government approvals and was on track for a final investment decision and subsequent construction.
The study shows that Sulphur Springs will be technically and economically robust, generating a pre-tax internal rate of return of 59% and free cashflow of about $1.5 billion. The new bottom-up mining approach will see Sulphur Springs developed as an underground mine from the outset which will allow substantial flexibility in the mine plan and scheduling sequence.
Develop Global Managing Director Bill Beament said the results of the definitive feasibility study were "outstanding" and confirmed that the project was set to deliver substantial value for shareholders.
The case for accelerating Sulphur Springs is clear and compelling. We have a unique opportunity which we intend to maximise by building the underground decline and associated infrastructure at the start of the project, well before we start production mining, significantly de-risking the project and maximising the opportunity at Sulphur Springs. We also plan on leveraging the projects significant untapped geological upside, and we are confident in its potential to deliver substantial mine life growth.
Mr Beament said that, along with the Woodlawn mine, the company now had significant exposure to two minerals in copper and zinc, which were in high demand due to their use in clean energy transition technologies.
The company said it would now look to pursue offtake agreements with buyers, as well as project funding.
The Sulphur Springs project has an ore reserve of 8.8 million tonnes of ore at a grade of 1.1% copper and 5.4% zinc.
At the Woodlawn mine, the company delivered its first shipments of copper, zinc, and lead to customer Trafigura in the June quarter.
