ASX-listed Macmahon Holdings says it has been issued a Notice of Award by AngloGold Ashanti, its client at the Tropicana gold mine in Western Australia, for the development of the new Boston Shaker underground mine.
Tropicana, a joint venture between AngloGold (70% and manager) and Independence Group (IGO, 30%), is already Macmahon’s largest mining contract in Australia.
The addition of the Boston Shaker underground work is worth approximately A$170 million ($121 million) over five years, according to Macmahon, which said it expected to commence work in May with contract documentation finalised by the parties in the coming weeks.
Capital expenditure for the underground works is estimated to be approximately A$30 million, and will be primarily spread across the first three years, Macmahon said.
The development of the Boston Shaker underground mine will enable Tropicana gold production to be maintained at between 450,000-500,000 oz/y of gold over the five years to and including the 2023 financial year, AngloGold and Independence Group said. It is expected to contribute 100,000 oz/y to the operation, with first gold expected during the September 2020 quarter. The feasibility study estimated a capital cost for the project of A$105 million.
Macmahon’s Chief Executive Officer, Michael Finnegan, said: “We are excited that our long-term alliance partnership with AngloGold Ashanti and Independence Group has grown to also include its new underground development at Tropicana, where we have been operating the surface mining since 2012.
“This contract win is a major step towards our strategic goal of growing our underground business and capitalising on the increased level of underground opportunities with existing and potential new clients.”