Rising from the ashes: Develop aims to resurrect Woodlawn mine

Western Australia based outfit, Develop, acquired the mine under a deed of company arrangement in May. It purchased all shares from former owner, Heron Resources, which entered voluntary administration in July, 2021. It had shut down operations in March, 2021 and made up to 90 employees redundant.

READ MORE:

Goulburn company calls on Heron Resources to pay alleged debt

Woodlawn Mine company, Heron Resources, enters voluntary administration

Heron Resources battles to keep Tarago's Woodlawn Mine afloat

Develop paid $30 million upfront for the operation. It comprised $15m in cash and $15m in shares, an Australian Securities Exchange (ASX) announcement earlier this year stated. It also agreed to reimburse major funding partner, Orion, $500,000 for the mine's care and maintenance. Further, it agreed on "success driven" payments of up to $70m to Orion subject to certain ore extraction amounts.

CEO Bob Beament described it as an "exceptional acquisition."

"Woodlawn hosts future-facing metals in a tier-one location and meets all our criteria for creating shareholder value," he said earlier this year

"It is a substantially developed project with extensive underground infrastructure and a new processing plant. The previous owners invested $340m to establish the operation."

Mr Beamant was not available for interview. However a Woodlawn Project community consultation committee meeting at Tarago last month heard that Develop hoped to restart copper, lead and zinc mining and production towards the end of 2023.

ALSO READ: Masala Mill overcomes three years of challenges to win prestigious award

A new mine plan will be developed in early 2023 and new equipment is being brought to the site.

Mine manager, Chris Taylor, told the meeting there was "significant" potential for extensions to known lenses in the ore body, and for new lenses to be found.

A further ASX announcement last week estimated the underground resource at 7.3 million tonnes, with zinc comprising 13.2 per cent. Assessments had also identified an additional 5.1 tonnes of mineralisation next to the underground workings.

Mr Beament said this was even higher grade than the current resource and "could have a significant impact on the overall inventory and mine life."

Some 15 to 20 staff were employed at the site in early July. This number was expected to double by this month and ramp up to about 150 in 12 to 18 months.

"It is possible that Develop could establish a semi-permanent mine camp in the area, but not at the mine site," consultative committee meeting minutes stated.

"The company intends to utilise local workers as much as possible for the project."

He said excavations were well underway to start underground drilling next quarter.

ALSO READ: Remembering Goulburn Waterworks engineer-in-charge on centenary of his death

Heron Resources won state government approval in 2016 to extract 1.5 million tonnes annually of zinc, copper and lead ore concentrates to produce 150,000 tonnes of concentrate, for up to 21 years. It aimed to revive the Woodlawn Mine, which operated from 1978 to 1998, and invested significantly in plant and infrastructure.

But when trouble hit, the mine was placed in care and maintenance mode in 2020.

Creditors, including several Goulburn and district companies, were left out of pocket. Under the deed of company arrangement, Develop paid administrators $8.5 million to be distributed to unsecured creditors and to pay administration fees.

The company also owns the Sulphur Springs copper, zinc and silver project in WA's Pilbara region. It is trying to raise $50 million in equity for the Woodlawn venture.

Mayor Peter Walker welcomed Develop's entry, saying it had "very different mining approaches to Heron."

ALSO READ: Parents, community voice concerns over safety of public school's water

Tarago and District Progress Association president Adrian Ellson said the project was viewed as a positive for the town. During Heron's term, there was a short-term uplift in the rental market.

"The only negative is that if the Blind Creek solar farm (near Bungendore) goes ahead, along with Veolia's incinerator, there will be a massive amount of truck movements on Bungendore Road at one time," he said.

"We have asked Transport for NSW to do a proper assessment on the road and for the council to look at it as well."

The Tarago community has also called for an upgrade of the Braidwood Road/Wallace Street intersection, enabling articulated trucks to turn properly.

Do you have something to say about this issue? Send a letter to the editor. Click here for the Goulburn Post

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content: