en.Wedoany.com Reported - MLG OZ LTD (ASX:MLG) has secured an open-pit mining and crushing contract worth AUD 70 million from DEVELOP GLOBAL LTD (ASX:DVP). The contract serves the Pioneer Dome lithium project in the Eastern Goldfields of Western Australia, marking a key step towards first lithium production and cash flow for the project.
The contract covers the mining of the Cade Pit, the first mining stage of the Pioneer Dome project, which is expected to last approximately 12 months. The scope of work includes drilling and blasting, loading and hauling, crushing and screening, and other ancillary surface activities.
Develop stated that the award of this contract is one of the significant commercial milestones towards achieving production targets. The Pioneer Dome project is scheduled to achieve first production and cash flow in the December quarter of 2026. This follows the project's final investment decision earlier this month and the signing of a binding offtake agreement with Trafigura for at least 750,000 tonnes of lithium direct shipping ore (DSO).
MLG's mobilization is planned for mid-July 2026, with mining operations scheduled to begin in August and crushing operations in September. The project is expected to generate approximately AUD 70 million in revenue for MLG over 12 months, with the full amount contracted within the 2027 financial year.
The Pioneer Dome project is positioned as a capital-light, fast-to-market DSO project, aiming to capitalize on stronger lithium market conditions. Develop's final investment decision is based on mining 850,000 tonnes of DSO from the open pit, with pre-production capital costs estimated at AUD 35 million to AUD 40 million. The project is fully funded through Trafigura's USD 400 million financing and offtake package, which also includes Develop's Sulphur Springs copper-zinc project. Trafigura has committed to offtaking the DSO from Pioneer Dome, with terms including a minimum price linked to time and volume, as well as pricing options.
MLG was selected through a competitive tender process, which focused on reducing execution risk and appointing a contractor with strong operational capabilities in the Goldfields region and relevant experience in open-pit and hard-rock lithium operations. Develop stated that MLG's headquarters in Kalgoorlie, regional workforce, and nearby maintenance facilities supported its selection, in addition to its experience in lithium crushing, such as its previous involvement in Mineral Resources' Bald Hill lithium project.
MLG CEO Mark Hatfield stated that the award of this contract is strategically significant for the company. He noted that the integrated scope of work, covering drilling and blasting, loading and hauling, crushing, and site services under a single responsibility framework, demonstrates the depth of MLG's own execution capabilities and reinforces the value of its integrated service model for clients seeking an end-to-end service partner. He looks forward to working closely with Develop to safely and efficiently complete the initial phase activities.
Alongside the contract award, Develop reported further infill drilling results from the Pioneer Dome project. The company completed a 20,000-meter drilling program in May 2026 and has received assay results from 123 of the 234 drill holes. The results highlight high-grade lithium mineralization with low iron and low mica impurities in the proposed first-stage open pit and the second-stage underground mine under evaluation. Significant results include 32 meters at 1.71% lithium oxide from 79 meters; 29 meters at 1.70% lithium oxide from 66 meters; and 29 meters at 1.69% lithium oxide from 66 meters. Within the proposed Cade first-stage open pit and second-stage underground area, the weighted average infill drilling intersection thickness at true width is 15.8 meters, with a grade of 1.45% lithium oxide and 53.8 ppm tantalum pentoxide. These assay results and new geological interpretations are planned to be incorporated into an updated mineral resource estimate and grade control model in the September quarter.
Develop Managing Director Bill Beament stated that the award of the MLG contract is a "significant piece of the puzzle" for the Pioneer Dome project. With the final investment decision, Trafigura offtake agreement, all approvals, and the mining contractor appointment in place, Pioneer Dome is ready to go. Bill Beament believes the company is well-positioned to capitalize on the strong lithium market, particularly the surging demand for DSO material, with production and cash flow set to ramp up in the December quarter. He also noted that the latest infill drilling results show consistent, thick zones grading over 1.45% lithium oxide in both the planned open pit and underground mine, with these high grades boding well for the upcoming updated resource model and mine plan.
