Macmahon Holdings says it has come to an agreement with Newcrest Mining over the increased rates for its work at the Telfer gold-copper mine, in Western Australia, with the settlement leading to the contract becoming “cash flow positive” over its remaining term.

In June, Macmahon said it had commenced facilitated negotiations with Newcrest regarding pricing for changes to the mine plan and contract program at Telfer following a disagreement between the two parties.

Macmahon first commenced the Telfer life of mine contract in February 2016 and, “despite previously disclosed risks and difficulties associated with the project, achieved an operational turnaround in 2018”, it said. Without a rate increase being agreed by Newcrest or some other form of contract amendment, the mine plan and program changes had a negative impact on Macmahon’s costs and returns from the project, according to the contractor.

Telfer, some 450 km east-south-east of Port Hedland, comprises the Main Dome and West Dome open pits and the Telfer underground mine.

Macmahon CEO and Managing Director, Michael Finnegan, said: “The resolution of this dispute means we can now focus all of our attention on maximising the performance of our existing business, and capitalising on growth opportunities. We have several opportunities in our tender pipeline that we are pursuing from an exclusive or shortlisted position, and I am optimistic about the prospects of winning additional work in Australia and achieving further growth in our profitable operations offshore.”

Macmahon has reiterated its financial year 2020 guidance, with revenue expected to be between A$1.2-$1.3 billion ($829-898 million), and EBIT between A$80-$90 million.