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Contract awarded for $105M Metal Project

Macmahon careers
Macmahon careers

An Australasian mining services company has won a new tender for a $105 million precious metal project.

Macmahon Holdings recently secured the underground mining contract for AngloGold Ashanti’s and Independence Group NL’s Boston Shaker Underground Gold Mine, 330km northeast of Kalgoorlie in Western Australia’s Fraser Range region.

Macmahon has been the open-pit mining contractor at the $700 million Tropicana Gold Project in the same location since the year 2012. Tropicana is a joint venture between AngloGold Ashanti (70 per cent and manager) and Independence Group NL (30 per cent).

The latest deal involves overseeing a proposed mining fleet of two jumbos, two production drills, three remote-capable loaders and four trucks.

The contractor will blend the underground mined ore with open pit ore and process the mixture at the existing Tropicana processing plant. The current mill throughput of 8.1 million tonnes per annum (Mtpa) will be maintained without any expected change to processing plant operating costs.

Macmahon expects to start work in May 2019 with mine construction and development to begin in the June quarter of 2019, and first gold production in the September quarter of 2020.

The contractor is already advertising job vacancies for a maintenance manager, multiple all-round operators, tyre fitter – leading hand and tyre repairer.

To apply visit the Macmahon Careers website and search for  the term “Tropicana”.

QMEB can reveal the contract is worth a total of $170 million over a five-year term. From this, capital expenditure for the underground works is estimated to be about $30 million for the first three years.

“This is a great project to be associated with and we look forward to working closely with our client to safely and efficiently develop its underground project over many years to come” Macmahon’s Chief Executive Officer Michael Finnegan said in a public statement. “This contract win is a major step towards our strategic goal of growing our underground business and capitalising on the increased level of underground opportunities with existing and potential new clients.”

The proponents have just recently finished the feasibility study, which includes scope for:

  • expansion of accommodation village, including addition of 160 rooms
  • additional emergency response team capacity including training rooms and supporting infrastructure
  • new administration and shift pre-start room
  • new mining equipment workshop and a light vehicle workshop extension
  • primary underground ventilation fans and surface infrastructure
  • installation of escape ways and services
  • underground dewatering.

The study believes there is strong financial and technical viability to the development. Capital expenditure for these items is predicted to total about $105 million, plus sustaining underground production costs of $95 a tonne of underground material.

This is based on an underground operation mining at a rate of approximately 1.1Mtpa of ore reserves and mineral resources at estimated grades of 3.5 grams per tonne Au to produce approximately 100,000 ounces of gold per annum over a period of seven years. This timeframe is based on three years of production from ore reserves plus a further four years from inferred mineral resources.

The Boston Shaker Underground mine will help gold production at Tropicana maintain a rate of between 450,000 and 500,000 ounces annually over five years to, and including, the 2023 financial year.

“The Boston Shaker Underground development is an important step in the continuing value enhancement at the Tropicana Gold Mine, which remains one of the lowest cost gold operations of scale in Australia,” Independence Group managing director Peter Bradford said.  “Appointing Macmahon as preferred contractor also enables unlocking additional synergies and the delivery of even greater value for Tropicana.”

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