Develop Global Fast-Tracks Pioneer Dome Lithium Project toward First Sales with MLG Oz Contract

Develop Global (ASX: DVP) has moved its Pioneer Dome lithium project toward first sales in the December quarter after awarding a $70 million open pit mining and crushing contract to MLG Oz (ASX: MLG).

The contract represents one of the major commercial steps required before production and cash flow, and follows Develop’s final investment decision (FID) for the Western Australian project earlier this month.

Pioneer Dome is being developed as a capital-light, fast-to-market direct shipping ore (DSO) operation designed to take advantage of strong lithium market conditions.

Develop has based the initial plan on mining 850,000 tonnes of DSO from an open pit, with pre-production capital costs estimated at $35m to $40m.

The company expects the combination of robust lithium prices and low-cost DSO production to generate strong free cash flow once operations ramp up.

Mining Contract Awarded

Develop selected Kalgoorlie-based MLG Oz after a competitive tender process focused on reducing execution risk and securing a contractor with strong operational capability in the Goldfields region.

The 12-month contract covers drill and blast, load and haul, crushing and screening, and supporting surface activities at the Cade pit, which will form the inaugural mining stage at Pioneer Dome.

MLG is targeting mobilisation in mid-July, with mining scheduled to start in August and crushing to follow from September.

Develop expects production and cash flow to begin ramping up in the December quarter, with MLG’s contract fully recognised within the 2027 financial year from the contractor’s perspective.

MLG will support the campaign with company-owned crushing assets and its core production fleet, providing operational control and asset utilisation across the initial mine development.

MLG Builds Lithium Presence

MLG Oz chief executive officer Mark Hatfield described the award as a strategically important step for the mining services group.

“It positions us alongside one of the most credible emerging mineral producers on the ASX and draws on MLG’s prior experience in the lithium services market,” he said.

Mr Hatfield said the contract demonstrated MLG’s ability to deliver integrated services under one accountable framework.

“We look forward to working closely with Develop to deliver this initial stage of activity safely and efficiently, and to building a strong relationship as Develop progresses its broader plans for Pioneer Dome.”

Pioneer Dome ‘Ready to Go’

Develop managing director Bill Beament said the MLG award had completed another key requirement for Pioneer Dome’s move into production.

“With our FID taken, Trafigura offtake locked in, all approvals in place, and now our mining contractor appointed, Pioneer Dome is ready to go,” he said.

“This means we are very well-positioned to capitalise on the strong lithium market, particularly the surging demand for DSO material, with production and cashflow to ramp up in the December quarter.”

Pioneer Dome is fully-funded through the US$400m financing and offtake package Develop announced earlier this month with global commodities trader Trafigura, which also covers the company’s Sulphur Springs copper-zinc project and gives Develop funding certainty across two growth assets.

Trafigura has committed to DSO offtake from Pioneer Dome, with terms covering a minimum of 750,000t at an indicative market pricing of $400/t to $500/t for 1.2% lithium oxide (Li2O) DSO, with time and volume-linked floor price and pricing optionality included.

The company is also advancing plans to potentially extend the DSO operation underground after the initial open-pit phase.

Strong Infill Results

Develop has received strong assay results for another 79 infill holes from the 20,000-metre drilling program it completed at Pioneer Dome in May.

Results have now been received for 123 of the 234 holes, highlighting clean, high-grade Li2O mineralisation with low iron and mica impurities across the planned Stage 1 open pit and potential Stage 2 underground mine.

Recent significant intersections include 32m at 1.71% Li2O and 51 parts per million tantalum pentoxide (Ta2O5) from 79m, 29m at 1.70% Li2O and 53ppm Ta2O5 from 66m, and 29m at 1.69% Li2O and 52ppm Ta2O5 from 66m.

When combined with previously reported results, the Cade infill program has produced an average length-weighted intersection of 15.8m at 1.45% Li2O and 53.8ppm Ta2O5 on an estimated true-width basis.

Develop expects to incorporate the assay results and new geological interpretation into an updated mineral resource estimate and grade-control model during the September quarter.