Develop secures funding and offtake for Woodlawn mine

Develop Global Limited (ASX: $DVP) has secured a prepayment/loan facility and offtake arrangement with Trafigura, a leading commodities trader, for its Woodlawn copper-zinc mine in NSW. The US$65 million prepayment/loan facility, equivalent to approximately A$100 million, will pave the way for the mine's production and cashflow in mid CY2025, subject to a Final Investment Decision (FID) this quarter. With this facility, in addition to existing cash reserves of A$41 million as of 30 June 2024 and a profitable mining services division expected to grow cash reserves in FY25, Woodlawn mine is now fully-funded through to production.

Executive Commentary on Funding and Offtake Arrangement

Develop Managing Director Bill Beament expressed his satisfaction with the competitive prepayment/loan facility and offtake arrangements, emphasizing the significant flexibility and low interest rate. He highlighted the strong vote of confidence in the mine, its management, and the substantial equity capital invested. Beament also underscored the improved terms of the offtake arrangement, leading to an increase in the project's NPV from A$658m to A$728m. He confirmed that the FID this quarter will set up Woodlawn for first production and cashflow in mid CY2025, while also establishing a promising relationship with Trafigura for potential future projects or opportunities.

Summary of Develop's Funding and Offtake Arrangement

The prepayment/loan facility and offtake arrangement with Trafigura mark a significant milestone for Develop, ensuring full funding for the Woodlawn mine's production and cashflow. The terms of the facility, including the competitive interest rate and flexibility, reflect a strong vote of confidence in the mine's quality and management. The increase in the project's NPV to A$728m and the forecasted pre-tax free cashflow of A$1.1b based on a 10-year mine plan demonstrate the substantial value and financial returns expected from Woodlawn. The company's strong commercial position, potential for additional projects, and the flexibility provided by the offtake arrangement further solidify Develop's position for future growth and success.