Underground contracting demand to ‘exceed supply by substantial margin’: Beament

Develop, led by former Northern Star Resources boss Bill Beament, is predicting “exponential” future demand growth for underground mining services and copper – areas where it is currently building delivery capacity in Australia.

“We have laid out a robust plan for creating significant value in two core areas where demand will exceed supply by a substantial margin,” Beament said this week, referring to the company’s recently launched five-year business plan.

It is working to redevelop the mothballed Woodlawn zinc-copper project in New South Wales, and expand resources with a view to improving the economics of a zinc-copper project at Sulphur Springs in Western Australia. The company won a circa-A$400 million mining contract at the new Bellevue gold project in WA, which generated $9m of September-quarter revenue.

Nearly 1050m of underground development completed during the period was in line with the mining schedule, Develop said. Crews have been working with second-hand equipment before the arrival of the first new machines in the current quarter, which Develop expects to boost productivity.

The company had cash of $36m on hand at the end of September.

It has an initial aim to be a producer of 50,000 tonnes of copper-equivalent per annum, and become a leading player in the underground hard-rock mining services market. Australia-based contractors are already dominant in that arena outside the Americas, and have now established beachheads in North America.

Beament believes Develop can benefit from “significant growth already underway in demand for underground mining services”.

“The current supply deficit in this area will only increase and we have established an outstanding team who can provide these services,” he said.

Develop says it is not experiencing any issues attracting and retaining underground workers, ahead of a planned ramp-up in personnel levels at Bellevue early next year.

Global investment fund BlackRock became a 5.2% owner of Develop stock during the quarter.


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