'A great mine by any measure': Company banks on Woodlawn restart

At maximum capacity, it could employ 250 people, which the Tarago and district community has welcomed.

New owner, Develop, headed by Bill Beament, has notified the Australian Securities Exchange of a production restart plan.

The zinc, lead and copper mine operated from 1978 to 1998. Heron Resources tried to resurrect it but the company entered voluntary administration in July, 2021. Develop purchased the mine and some plant in 2022 for $30 million, plus $70m in "success-driven milestone payments."

After two years of exploration, Develop managing director, Bob Beament says the restart plan confirms "that Woodlawn is a great mine by any measure."

"The valuation, inventory, cash flow and the returns are all extremely strong. At the same time, the start-up costs, the funding requirements and the risks are all very low," he said in a statement.

"This exceptional scenario sits against a backdrop of a very bullish outlook for copper and zinc, particularly in tier one locations."

The company estimates the underground resource at 11.3 million tonnes with 5.8 per cent zinc, 2.1pc lead and 1.8pc copper, thanks largely to the Lachlan Fold belt that runs through the site and beyond. The ore reserve estimate is 80 per cent more than a 2023 forecast.

A revised mine plan indicates Woodlawn can produce 850,000 tonnes annually, including 12,000 tonnes of copper and 36,000 tonnes of zinc metal. Up to seven trucks a day would carry this to Goulburn for rail transport to port.

The plan also forecasts $2.6 billion in revenue and $1 billion in pre-tax cash flow over the 10-year life.

Mine general manager, Chris Taylor, said $65m had been spent on development and drilling for the mine plan and this had "borne fruit."

"We drilled more than 80 holes and every one of them had mineralisation somewhere. Some were better than we thought and others were unexpected," he said.

In contrast, Heron had not not done any underground drilling and its plan was based on reworking tailings dams.

Develop is also shoring up its mining tenements at nearby Cowley Hills and Currawang, which it says show promise for longer-term development.

The company estimates Woodlawn's restart will cost $42m, which it describes as "very low." A tertiary crusher, grinding metal to a smaller ore size, greater storage capacity and other processing infrastructure will absorb much of this.

Mr Taylor, said the numbers painted a "very viable" picture for Woodlawn. However he stressed that a final investment decision hadn't been made yet.

"It will be one of the most profitable mines on the east coast based on these numbers and that's a function of the technical and geological work done over the past two years and by Heron to get to a point where we can turn things on," Mr Taylor said.

"It's really exciting. We've been conservative with our numbers."

Develop is considering selling a minority interest in Woodlawn to a "strategic investor." Mr Taylor said a final investment decision would be made in the next few months.

If the venture "ticked all the boxes," underground development could start in September/October with up to 50 people onsite. Mr Taylor said mining would start five months before processing began to supply enough material.

He told The Post that employee numbers would ramp up to 250 as production increased.

"Preferably, all those will be local but we have to be realistic," he said.

"We hope 50 to 60pc will be local. A lot will be entry level and apprentices, people who don't necessarily need mine experience," he said.

Develop has been talking to the community about jobs, supply opportunities and broader economic benefits.

Mr Taylor said the Tarago community had been "super supportive and positive" and the company wanted to build on this social licence.

He expected that Develop would become more involved in donations and charity when revenue was generated. He did not rule out a community benefit fund in future.

The Loaded Dog Hotel licensee, Tim Long, said the mine was already generating employment and economic spin-off for the town.

"They are actively involved in the community and are looking to support groups. When their mining (construction) camp sets up there will be great employment opportunities," Mr Long said.

"They are a big boon to the community so far...I think some extra industry, with the correct environmental safeguards in place, will have massive benefits."