Macmahon provides business update

Tropicana Project Extension

The Tropicana mine is a joint venture between AngloGold Ashanti Australia Ltd (70% and operator) and Regis Resources Ltd (30%), and is one of Australia’s largest gold producing mines. Macmahon has been providing mining services since opencast mining started in July 2012 under a life of mine alliance contract.

The additional work for Macmahon follows the completion of a detailed final cutback study of the Havana pit and subsequent confirmation of the optimal method to mine the deeper ore in the Havana ore body. Macmahon has now been provided with the scheduling detail for the cutback, which will add 155 million t to the material to be mined from 2024.

The final cutback of Havana will extend the opencast mine life by four years, from 2023 to 2027, and is expected to generate additional revenue of approximately AUS$470 million.

Telfer Project Extension

Macmahon has also confirmed an extension of its life of mine contract with Newcrest for the Telfer mine.

On 12 August 2021, Newcrest announced that it will proceed with the West Dome Stage 5 cutback at Telfer. This new scope of work is expected to generate revenue of approximately AUS$138 million, and will extend Macmahon’s work on site to September 2024. This new work has been negotiated on updated rates which are forecast to achieve the company’s internal financial hurdles.

Hu’u Project

In Indonesia, Macmahon has received a letter of award to construct an 11 km access road at the Hu’u copper gold exploration project on Sumbawa island. This work is valued at approximately AUS$18 million, and is a further step in the company’s strategy to increase its revenue from mining support services.

Subject to finalisation of contract documentation, the project is forecast to commence in September 2021 and employ approximately 150 people. The Hu’u project is 80% controlled by Vale SA.

Syndicated asset finance facility

Finally, Macmahon has advised that it has finalised a new AUS$145 million syndicated asset finance facility at competitive interest rates. The facility is supported by several major Australian banks and will provide additional flexibility to fund the company’s CAPEX investment programme and deliver on its order book.

Macmahon CEO and Managing Director, Michael Finnegan, said: “We are pleased to have secured this additional work which adds approximately AUS$600 million to our order book. A key highlight is the extension of our long-term alliance contract at Tropicana, which has been a cornerstone of our surface mining business in Western Australia for many years and has recently expanded into underground mining.

“[The] announcement is another demonstration of our broad capabilities and the potential in our business for continued growth.”

Read the article online at: https://www.globalminingreview.com/finance-business/26082021/macmahon-provides-business-update/