Tag Archives: contract mining

Elliott funds take 50% stake in CIMIC’s Thiess

Equipment maintenance, Mining equipment, Mining mergers and acquisitions, Mining services, , , , ,

CIMIC Group says it has entered into an agreement with funds advised by Elliott Advisors (UK) Ltd regarding the acquisition by Elliott of a 50% equity interest in Thiess, a leading mining services provider.

Elliott is one of the oldest fund managers of its kind under continuous operation and manages more than $40 billion in assets, including equity positions in private and listed companies, in Australia and globally, CIMIC says.

Thiess, meanwhile, delivers open pit and underground mining in Australia, Asia, Africa and the Americas, providing services to 25 projects across a range of commodities. It has a diverse fleet of plant and equipment of more than 2,200 assets, a team of around 14,000 employees and generates annual revenues in excess of A$4.1 billion ($2.9 billion). Thiess is included in CIMIC’s Mining and Mineral Processing segment with CIMIC company Sedgman, a leading provider of minerals processing and associated infrastructure solutions to the global resources industry.

Following closing of the deal, CIMIC and Elliott will jointly control Thiess in accordance with a Shareholders’ Agreement, which contains governance arrangements as well as Thiess’ financial and dividend policies, among other items.

The price for Elliott’s 50% equity interest in Thiess implies an enterprise valuation of approximately A$4.3 billion (based on 100% of Thiess), subject to certain adjustments. The transaction will strengthen CIMIC’s balance sheet by generating cash proceeds on completion of A$1.7-A$1.9 billion as well as reducing CIMIC’s factoring balance by around A$700 million and CIMIC’s lease liability balance by some A$500 million, it said.

CIMIC Group Executive Chairman, Marcelino Fernández Verdes, said: “The sale agreement reflects Thiess’ ongoing strategic importance as a core activity for CIMIC. It capitalises on the robust outlook for the mining sector and, together with Elliott, we will pursue market opportunities in line with Thiess’ growth and diversification strategy.”

Back in July, CIMIC Group announced that it had signed an exclusivity agreement and was in advanced negotiations with funds advised by Elliott regarding the potential investment by Elliott into 50% of the share capital of Thiess.

MACA to get mining Fenix Resources’ Iron Ridge project

Mineral project development, Mining services, Steel and iron ore, , , , , , , ,

Fenix Resources has awarded the drill & blast, mining, and crushing & screening contract for its Iron Ridge project, in Western Australia, to MACA Ltd.

MACA is a reputable contractor with a strong track record of operational experience in the mining sector and has been involved in the Australia iron ore industry having carried out long-term works for Atlas Iron Ltd and Crossland Resources, Fenix said.

Early stage works commenced last month through local contractors, with MACA currently mobilising heavy earthmoving equipment to site.

Open-pit mining and crushing and screening operations are due to commence in the current quarter.

MACA said the contract is expected to generate around A$185 million ($131 million) in revenue for it over the 75-month term.

Fenix Managing Director, Rob Brierley, said: “We having been interacting with MACA on all aspects associated with the Iron Ridge project for well over a year now, and we are pleased that this relationship will continue as we transition to production in the near-term.

“MACA has vast experience in all aspects of iron ore mining operations and has essentially offered Fenix a one-stop shop for all our service requirements leading up to the transport of the ore from site to the port of Geraldton.”

The terms of the contract are in line with the company’s feasibility study, announced on November 4, 2019, which outlined that circa-8 million tonnes of high-grade hematite grading some 64% Fe will be extracted over a 6.5 year life of mine.

This same study assumed a single open-pit operation using conventional excavator‐truck mining fleet, adopting 10 m benches and mining these benches in three flitches. Ore and waste would be hauled to the run of mine pad and waste dump, respectively, by a fleet of 100 t haul trucks, while drill and blast will be conducted using a top hammer drill rig and ANFO or heavy ANFO explosives.

Pit N Portal enters open-pit mining services space with Red 5 Great Western contract

Mineral processing, Mineral project development, Mining services, Precious metals, , , , , , , ,

Red 5 Ltd has reported an updated resource and maiden reserve estimate for the Great Western gold deposit in Western Australia, at the same time as confirming Pit N Portal, a division of Emeco, will contract mine the open-pit asset.

A satellite deposit located around 55 kms from Red 5’s Darlot gold mine and processing facility, Great Western now comes with a measured, indicated and inferred resource of 870,000 t grading 2.5 g/t Au for 70,300 oz of contained gold. The maiden proven and probable reserve totals 437,500 t at 2.5g/t Au for 35,424 oz of contained gold.

Based on a proposed mining rate of between 30,000-40,000 t/mth of ore, the open pit is expected to be completed over a period of around 13 months, with plans to then access the underground orebody via a portal at the base of the pit, Red 5 says.

The company expects to commence open-pit mining in January with Pit N Portal, with ore from the open-pit operation processed at the existing 830,000 t/y gravity and carbon-in-leach Darlot processing facility (pictured).

Red 5 says studies are already underway for the commencement of underground mining following completion of the open pit.

Steve Versteegen, CEO of Pit n Portal, said: “We are thrilled to be continuing our partnership with Red 5 on this project, and also entering the open-cut mining services space with a long-term customer.

“This project allows Pit N Portal to perform the open-cut operations for Darlot gold mine and provides an opportunity for Pit N Portal to continue with Red 5 when it reviews the potential for an underground option accessed via a portal at the base of the pit.”

Thiess to continue operations at BMA Caval Ridge coal mine

Coal technology, Equipment maintenance, Mine operation news, Mining equipment, Mining services, Steel and iron ore, , , , , , , , ,

CIMIC Group’s global mining services provider, Thiess, has been awarded a contract extension by BHP Mitsubishi Alliance (BMA) to provide mining services at the Caval Ridge coal mine in Queensland, Australia.

The 12-month contract extension will generate revenue of A$110 million ($79 million) to Thiess, CIMIC said.

Under the contract variation, Thiess will continue to operate and maintain three 600 t excavator fleets to move additional overburden for the Caval Ridge operation, an open-pit coal mine with a 10 Mt/y throughput capacity.

Back in 2018, Thiess and BMA signed a contract variation that saw the contract miner move additional overburden through 2020 as per the terms of the contract.

CIMIC Group Chief Executive Officer, Juan Santamaria, said: “This contract extension builds on our relationship with BMA and reinforces our commitment to work with our clients to safely position their operations for optimal efficiency, productivity and cost performance.”

CIMIC Group Executive Mining and Mineral Processing and Thiess Managing Director, Douglas Thompson, said: “We’re proud to continue our work at Caval Ridge where we have a proven track record of delivering innovative and low-cost mining solutions. It is a testament to the team’s continued focus on delivering a safe and productive operation for our client.”

The contract extension will commence in December 2020.

Last week, CIMIC confirmed that it was close to bringing in a new equity investor for its Thiess contract mining business.

CIMIC Group closes in on new equity partner for Thiess mining business

Mining finance, Mining mergers and acquisitions, Mining services, , ,

CIMIC Group is close to bringing in a new equity investor for its Thiess contract mining business, with Executive Chairman, Marcelino Fernández Verdes, saying in its latest financial results that due diligence had been completed and negotiations were expected to be finalised “in the coming days”.

Back in July, CIMIC Group announced it had signed an exclusivity agreement and was in advanced negotiations with funds advised by Elliott Advisors (UK) Ltd regarding the potential investment by Elliott into 50% of the share capital of Thiess. This would provide joint control of Thiess to CIMIC and Elliott.

Verdes said in today’s results that the introduction of an equity partner into Thiess “capitalises on the outlook for mining, provides capital for Thiess’ continued growth and enables CIMIC to strengthen its balance sheet”.

Within the September quarter, Thiess secured a A$340 million ($240 million) extension from Glencore to provide mining services at the Mount Owen coal operation in the Hunter Valley of New South Wales, Australia.

CIMIC Group said today that its companies are also bidding on work associated with the Winu copper-gold project in Western Australia, which Rio Tinto revealed a maiden inferred resource for in July; along with a mining extension at MACH Energy’s majority-owned Mount Pleasant coal operation in the Hunter Valley of New South Wales.

Thiess extends stay at Glencore’s Mount Owen coal mine

Coal technology, Mine operation news, Mining services, , , , , , , , ,

CIMIC Group’s Thiess has been awarded a contract extension by Glencore to provide mining services at the Mount Owen coal operation in the Hunter Valley of New South Wales, Australia.

The 18-month contract extension, to commence in July 2021, will generate revenue of A$340 million ($240 million) to Thiess.

Thiess will continue to provide mine planning, design and execution, drill and blast, overburden removal and coal mining services at the mine, it said.

The global mining services provider has operated at Mount Owen since 1994, applying, it says, industry best practice mining operations, with uncompromising environmental and safety standards. It is Thiess’ largest coal mining operation in New South Wales, processing up to 15 Mt/y of run of mine, of which 7.8 Mt/y is mined by Thiess from the Mount Owen North Pit.

Thiess Managing Director, Douglas Thompson, said: “For more than 25 years we have delivered industry-leading, specialised mining techniques at Mount Owen, leading to higher resource recovery, increased plant efficiency and reliable material movement for our client.

“Our team looks forward to continuing our long association with Glencore and the Hunter Valley community.”

Thiess says it has a strong presence in the Hunter Valley where it provides mining services at three mines. It works to deliver social benefits through local employment and training, local procurement, community engagement and Indigenous affairs.

Pit N Portal receives Notice to Proceed at Mincor’s Kambalda Nickel Operations

Base metals, Mineral project development, Mining finance, Mining project news, Mining services, , , , , ,

With funding now materially advanced and board approval in place, Mincor says it has issued a “Notice to Proceed” to its underground mining contractor, Pit N Portal, to start work at the Kambalda Nickel Operations in Western Australia.

In line with the binding contract executed in May 2020, Pit N Portal has 60 days to plan and mobilise for commencement of the contract.

The announcement of a final investment decision for the planned re-commencement of nickel mining at Kambalda by Mincor is supported by a credit approved term sheet agreed with two Tier-1 international banks to provide a secured A$55 million ($40 million) project finance facility. The facility, together with the company’s existing cash reserves of more than A$100 million, will allow Mincor to efficiently execute the delivery of its nickel restart plan in line with the definitive feasibility study (DFS) announced in March 2020, it said.

The contract with Pit N Portal encompasses a five-year pact for the new Cassini nickel mine, where early surface works were recently completed, and a three-year contract (plus one two-year option) at the Northern Operations (the brownfields Durkin North and Long nickel mines – both of which are on care and maintenance having previously operated). These two assets (Cassini and Northern Operations) make up the planned nickel operation.

Mincor says there are already several Pit N Portal personnel on-site following the commencement of an early works program.

“With all required key environmental and State Government permitting in place to commence, Mincor anticipates that mobilisation will ramp-up quickly over the coming weeks, with commercial mine development and surface construction expected to be in full swing during the December 2020 quarter,” the company said.

Subject to unforeseen delays, Mincor is targeting commencement of ore production early in the December 2021 quarter. First ore delivery to the BHP Nickel West Kambalda nickel concentrator and first nickel concentrate production is expected in the March 2022 quarter.

The “Mincor Nickel Operations” DFS from earlier this year confirmed the potential to develop a five‐year operation forecast to produce 71,000 t of nickel and 5,000 t of copper on a life-of-mine basis, with peak annual nickel-in-concentrate production of more than 16,000 t/y at a forecast life of mine unit cost of $2.35/lb.

Macmahon, GR Engineering on board Calidus Resources’ Warrawoona gold project

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Calidus Resources has started construction ahead of schedule at its Warrawoona project, as well as made two key appointments to deliver on its gold mine development in Western Australia.

It has appointed Macmahon Holdings as the preferred mining contractor for the project, while GR Engineering Services has been awarded preferred tenderer status for the process plant engineering procurement and construction.

While construction activity has already commenced ahead of the main project construction activities, which are expected to kick off in the March quarter of 2021, these contract tenders will allow finalisation of major contracts as part of the ongoing feasibility study at Warrawoona, due for completion this month, Calidus said. It will also help facilitate front end engineering and design for the project and the placing of orders for long lead items.

This project involves the development of a new open-pit mine in the Pilbara region, with the scope of work for Macmahon to include all open-pit mining activities, and potentially some early stage civil works.

Macmahon estimates the open-pit mining work will generate around A$220 million ($160 million) in revenue over 54 months and require capital expenditure of circa-A$30 million. There is also potential for the Warrawoona project to include underground mining, which could represent a further opportunity for Macmahon when this is developed, it said.

Macmahon expects it will start work on site in the first half of 2021, with the project to eventually employ more than 120 of its personnel.

GR Engineering, which has completed the last two gold plants in Western Australia, according to Calidus, will work on the design and construction of the process plant and associated infrastructure, meanwhile.

A prefeasibility study on Warrawoona completed in July 2019 outlined average gold production of 97,000 oz/y at an all-in sustaining cost of $1,159/oz over an initial six-year mine life via a 2 Mt/y conventional CIL processing circuit with single stage crush and SAG mill.

Among the initial works the company has started are 7 km-long access road to the village and process plant (pictured); the installation of the 240 room village that has been previously purchased by Calidus; the installation and operation of communications by Telstra; and the installation and equipping of water bores.

Barminco wins 18-month, A$140 million contract extension at MMG’s Dugald River mine

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Barminco has agreed the terms of a variation and extension to its development and production contract at MMG’s Dugald River zinc-lead mine, in north Queensland, Australia.

In addition to several amended contract conditions, the variation extends the term of the contract by 18 months to December 31, 2022, with two, one-year options to extend further. The value of the 18-month extension for Perenti’s hard-rock underground miner is approximately A$140 million ($103 million).

Barminco has been operating at Dugald River since 2012. IM recently reported MMG and Barminco were trialling an automated Sandvik LHD at the mine to further boost production.

Barminco’s Chief Executive Officer, Paul Muller, said: “We are excited to continue our relationship with MMG, which began in 2001 at the Rosebery mine in Tasmania. Dugald River has been a significant project for Barminco since commencement during 2012, and this extension will take our valued relationship with MMG to over 20 years.”

Perenti Managing Director and Chief Executive Officer, Mark Norwell, said Perenti had a “robust” tender pipeline of A$8.8 billion and its Underground Industry Sector Group had secured more the A$540 million in contract extensions this financial year.

GWR’s Wiluna West iron ore project heads for production with PRG contract

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GWR Group says it has reached agreement on key terms for a works contract with the Pilbara Resource Group Pty Ltd (PRG) to undertake the development of Stage 1 of the C4 iron deposit, part of the Wiluna West iron ore project, in Western Australia.

As part of this agreement, PRG will carry out agreed works for development, mining and transport of Stage 1 of the C4 deposit, including construction of the haul road, open pit and other required facilities and infrastructure, surveying, mining, crushing, screening and transport to port based on a schedule of rates to be agreed. PRG will be entitled to a 30% share of the profit from Stage 1 of the C4 iron deposit.

GWR, meanwhile, will undertake mine design, planning and optimisation for Stage 1 of the C4 iron deposit.

GWR Chairman, Gary Lyons, said the execution of a term sheet for development of the deposit was very significant for GWR shareholders and, together with the recently announced mining approvals, represents a major milestone for the company, “paving the way for the commencement of commercial iron ore production at the Wiluna West iron ore project”.

He added: “The Wiluna West iron ore project, an exceptional direct shipping ore (DSO) iron ore development project, will produce a high grade, low impurity iron ore.”

Scott Dryland, Managing Director of the PRG, said: “This project has added to a record year for PRG. Our business has gone from strength to strength and we are extremely happy to have the opportunity to deliver this project in partnership with GWR.”

The C4 iron deposit is 1.4 km long and contains a combined DSO hematite, JORC 2004 mineral resource estimate of 21.6 Mt at 60.7% Fe, comprising 18.5 Mt at 61.2% Fe indicated and 3.1 Mt at 58% Fe inferred. It has widths of DSO hematite mineralisation of up to 120 m with close spaced RC drilling having previously been undertaken on a 25 m by 10 m spacing over a strike length of 200 m, according to GWR.

The C4 Stage 1 project targets a 500 m strike length of outcropping high-grade DSO hematite mineralisation within the larger C4 deposit, with GWR having undertaken internal mine designs and scheduling.

GWR says it has been engaging with the Port of Geraldton and current users for port and shed access and continues to investigate other opportunities. Discussions are ongoing and well advanced with a nearby established mine in the Wiluna area for access to site services such as village, workshops and water, it added.

In line with the term sheet, GWR and PRG will negotiate a formal contract documentation including a works contract as soon as possible.