Develop has agreed to purchase the Woodlawn zinc-copper project in New South Wales (NSW), Australia, in a transaction valued at around $21.5m (A$30m).

The deal includes $10.7m (A$15m) cash and $10.7m (A$15m) worth of Develop shares in an upfront consideration. It also comprises success-driven milestone-related payments of around A$70m in cash or shares.

Through the purchase of Heron Resources, Develop is acquiring the Woodlawn project, a high-grade  volcanogenic massive sulphide (VMS) system in the Lachlan Fold belt in NSW.

Under the deal, Develop will acquire an underground mine and a processing plant, which are developed with an investment of $243.8m (A$340m).

Develop managing director Bill Beament said: “The geology is first-class, with a VMS system which is under-explored and open in a number of areas.

“We are very confident that we will be able to grow the inventory rapidly by extending the key lenses using underground drilling.”

Woodlawn consists of a JORC-compliant resource 8.2Mt at 9.8% ZnEq, including a high-grade underground Reserve of 3.1Mt at 13.1% ZnEq.

Develop is anticipating that Woodlawn has significant potential for extensions of existing lenses which are open at depth and along strike, as well as for the discovery of additional lenses with logical structural positions untested.

To establish multiple drilling platforms, Develop aims to focus on 1,000m of underground development. It will help the company to advance the underground mining inventory between 24 months and 36 months.

Later, the company will focus on completing a 33,000m underground diamond drilling programme to target lens extensions, untested EM conductors and additional mineralised horizons.