Tag Archives: Bonikro

Capital Drilling bolsters Bonikro gold mine operation with new equipment

Equipment maintenance, Mine operation news, Mining equipment, Mining services, Precious metals, , , , ,

Capital Drilling says it has commissioned new equipment to supplement Allied Gold’s existing mining fleet at the Bonikro gold mine, in Côte d’Ivoire, with the two companies currently in the process of implementing an interim mine plan at the operation.

The London-listed company was awarded the mining services contract – the company’s first – back in October 2019.

In Capital Drilling’s December quarter review, it said it had further established personnel and equipment to support the contract over this period and, in December, had commissioned three dozers (Cat D9Rs), one grader and one excavator, together with four production rigs (blast hole and grade control) at the operation.

It said 2020 contract revenues, while being subject to finalisation, were now expected to be around $15 million across the range of site services at Bonikro, compared with the $25-$30 million previously outlined.

The interim mine plan at Bonikro was scheduled to last until December 2020, but a long-term mine plan is expected to be completed in the September quarter, it said. This would allow the company to transition to a “Schedule of Rates contract”.

Bonikro commenced production in 2008 and was previously operated by Newcrest, prior to the sale of its majority interest to a consortium of F&M Gold Resources and the Africa Finance Corp, in December 2017, and the recent acquisition by Allied. It has historically produced over 1 Moz of gold.

On top of this news, Capital Drilling said, in its December quarter, revenue jumped 4.8% quarter-on-quarter to $30.7 million, while its cash flow generation had risen to $4.4 million at the end of the year, compared with $2.5 million at the end of the September quarter. This jump in cash came despite ongoing growth capital expenditure during the three-month period.

The company’s fleet utilisation also rose over the quarter to 59%, compared with 52% in the previous quarter. This is the equal highest utilisation level in four years for the group, driven by new contract start-ups, with most of the new work commencing in West Africa, it said.

Capital expected to spend $20 million on capex in 2020. This follows the addition of eight new rigs and mining equipment in 2019, of which four rigs are due for commissioning this quarter.

Capital Drilling expands into heavy mining equipment services sector

Equipment maintenance, Mining equipment, Mining services, Precious metals, , , , , , ,

Capital Drilling says it has signed binding agreements with Allied Gold Corp for the provision of a full range of mining services to its Bonikro gold mine in Côte d’Ivoire.

Additionally, Capital Drilling has made a strategic investment of $3 million in Allied.

The contract represents the company’s first comprehensive mining services contract win, with Capital Drilling now able to provide load and haul services to its clients in addition to its existing drilling, maintenance and mineral analytic capabilities.

Bonikro is a producing gold mine in Côte d’Ivoire which commenced production in 2008 and was previously operated by Newcrest, prior to the sale of its majority interest to a consortium of F&M Gold Resources and the Africa Finance Corp, in December 2017, and the recent acquisition by Allied. It has historically produced over 1 Moz of gold. With existing in-pit resources of 1.17 Moz of gold, Allied expects to produce approximately 120,000 oz of gold in the coming 12 months, Capital Drilling said.

Under the agreements, which are in addition to the previously announced exploration drilling contract, Capital Drilling will provide a full range of mining services at Bonikro including drill and blast, load and haul, grade control dewatering.

Capital Drilling commenced a phased management oversight at the Bonikro site in July 2019 with a small team of personnel, followed by an expanded team in September.

The company recently attained management control of mining operations and is working closely with Allied’s management to refine the Bonikro mine plan, it said. “Once the mine plan has been confirmed, the parties intend that the agreements will transition in the first half of 2020 to a comprehensive schedule of rates contract, primarily linked to tonnes mined and moved (schedule of rates contract).

Subject to the agreement of the schedule of rates contract, it is intended that the initial term of the contract will be five years, with contract revenues subject to the confirmation of mine plans and the terms of the schedule of rates contract. It is anticipated that revenue for 2020 will be in the range of $25-$30 million, with activity primarily focussed on the existing Hiré pits before ramping up over the life of the contract.

The contract will initially utilise five production rigs (blast hole and grade control), including two from Capital Drilling’s existing fleet. Furthermore, Capital Drilling will assume management control of Bonikro’s heavy mining equipment (HME) fleet including 16 mining dump trucks, four mining shovels and other associated mining equipment, “providing the group with a unique opportunity to enter into a contract of this nature with modest immediate capital requirements”.

Capital Drilling says it has committed to supplement the existing HME fleet with additional equipment at its own cost, including one excavator, three bulldozers and auxiliary equipment to ensure that the contracted material movement is achieved.

“Together with the three new blast hole rigs to be acquired, near term capital commitments are expected to total approximately $8 million, apportioned between the drilling fleet ($4 million) and the ancillary earth moving equipment ($4 million).

Under the agreements, Capital Drilling assumes full responsibility for the on-going upkeep and maintenance of the HME fleet and will assess longer term capital requirements as the contract progresses, the company said.

Commenting on the contract win and strategic investment, Jamie Boyton, Executive Chairman of Capital Drilling, said: “We are excited to embark on this new phase for Capital Drilling and to commence our first comprehensive mining services contract. Load and haul operations are a natural extension to our existing world-class drilling and maintenance capabilities. It means we can now offer clients a completely integrated mining service from initial exploration drilling right through to extraction and delivery of ore to the mill. We will draw on the extensive experience of our team to successfully incorporate and deliver this new service.

“It is also pleasing to add another long-term contract to our existing portfolio of long term, mine-site based projects. Further to this, our strategic investment into Allied represents a transformational opportunity for Capital Drilling. It expands our revenue sources into less cyclical mine-site based activities, while being aligned to our growth strategy of building a superior portfolio of long-term contracts.

“Allied’s pipeline also presents substantial growth opportunities and we look forward to working closely with the company to deliver incremental operational and productivity improvements at the Bonikro site. We anticipate this strategic investment, together with the addition of load and haul services, will provide further long-term growth opportunities with projects in the production phase and greater revenue and earnings sustainability in the future.”