Beadell is pleased to announce that it has executed a LOM mining contract with U&M Mineração e Construção S/A (U&M) that is expected to result in a forecast ~$100 million reduction in the LOM mining costs for Tucano. Under the agreement, U&M will be paid on a 100% volume basis contract that will give mining unitary cost predictability, simplifying the contract, mine management and administration. This is expected to result in an additional ~$1 million annual cost savings when compared to the contract with the previous contractor.

U&M is Brazil’s largest mining contractor, with more than 40 years of experience in earthworks, mining and material hauling. U&M’s 600 vehicle fleet, comprising production and support equipment, has the capacity to move more than 30 Mt per month. U&M’s existing clients include Vale, Alcoa, Mosaic, Yamana, Leagold Mining and Equinox Gold. U&M is also committed to work place health and safety and the environment.

Commenting, Dr Nicole Adshead-Bell, CEO and Managing Director, said: “We are pleased to have reached an agreement with U&M that we believe will materially improve the financial performance of the Tucano Gold Mine. U&M’s Brazilian open pit mining expertise, combined with its sizeable fleet, means that U&M is uniquely positioned to help us move Tucano towards generating free cash flow and resolving the key issue of material movement in line with our LOM plan. This will, in turn, allow the Company to shift focus towards extracting value from our exploration activities, including multiple in-mine and near-mine discoveries that are not in a resource or reserve category. I am excited by the resource expansion potential of our geologically impressive, large and wholly-owned land position and look forward to being able to upgrade growth initiatives to a core corporate goal.”

Luis Pablo Diaz, Country Manager, added: “U&M’s in-country experience, combined with their fleet flexibility and cost structure, will help us realise immediate cost reductions and efficiency gains, but more importantly provide us with the tools to deliver material movement to budget. We have already developed an excellent working relationship with U&M as they mobilised to Tucano in July 2017 to address our material movement challenges and we look forward to building on this relationship.”