Western Australia-based contractor SMS Mining Services has been named as the preferred mining contractor for both Capricorn Metals’ Karlawinda gold project near Newman and Adaman Resources’ Kirkalocka gold project near Mt Magnet.
The two contracts are worth A$640 million combined – A$420 million ($301 million) for Karlawinda and A$220 million for Kirkalocka – and push SMS’ contract book past the A$1 billion mark, according to SMS Managing Director Danny Sweeney.
Sweeney added that the company also has contracts in the pipeline extending out to 2027, and a remaining tender pipeline of over A$1.2 billion.
The Karlawinda gold contract is for a duration of eight years and 10 months, representing the entire life of mine. It will consist of open-pit mining services including load and haul, drill and blast, and mine development.
SMS will mobilise new and existing equipment, and deploy significant technology and operational initiatives, the company said.
“We are excited to be part of Capricorn Metals story. We look forward to forging a successful long-term partnership and supporting the company in bringing the Karlawinda gold project into production in 2019,” Sweeney said.
Formal contract award is subject to final contract negotiations which SMS expects to finalise in the coming months. Contract works are due to start in the June quarter of 2019.
A feasibility study on development of the Bibra deposit at Karlawinda was completed in October 2017. This envisaged a a single large open-pit deposit feeding a 3 Mt/y CIL processing plant, producing approximately 100,000 oz/y of gold at an average all-in sustaining cost of A$1,025/oz over the initial mine life.
Meanwhile, the company has also secured preferred contractor status for Adaman’s Kirkalocka project, 70 km south of Mount Magnet. SMS owns a 33% stake in privately-owned Adaman Resources as part of its equity strategy of supporting small and mid-tier miners to enter production.
The four-year contract with an option to extend will consist of open-pit mining services including load and haul, drill and blast, and mine development. Drilling is currently is underway to extend the mine life beyond the current six years.
Again, formal contract award is subject to final contract negotiations which SMS expects to finalise in the coming weeks. Contract works are due to start in late 2018.