Tag Archives: Macmahon

Red 5 formalises KOTH contract mining pact with Macmahon

Red 5 Ltd has awarded the King of the Hills (KOTH) mining services contract to Macmahon Contractors Pty Ltd, a subsidiary of civil and mining contractor Macmahon Holdings.

The contract award follows the completion of a thorough competitive tender process in late 2020 for the open-pit and underground mine contracts and encompasses the combined mining operations at KOTH, in Western Australia, Red 5 said.

Red 5 signed a Letter of Intent with Macmahon for the mining contract in March and, following the finalisation of contract terms, has now formally awarded the contract. The contractual terms are in line with the mining unit costs outlined in the KOTH Final Feasibility Study (FFS).

This study outlined a 16-year life of mine plan from open-pit and underground mining, whereby the company would produce 176,000 oz/y of gold over the first six years, with an initial five years of underground mining. First gold is scheduled in the June quarter of 2022.

The mining services contract is for an initial five-year period, with industry-standard incentives and penalties for mining contractor performance.

Red 5 Managing Director, Mark Williams, said the formal award of the contract to Macmahon is a significant milestone for the project.

“We’re pleased to have finalised agreed contract terms with Macmahon and formally appointed them as our open-pit and underground mining contractor,” he said. “Macmahon is one of the strongest mining contractors in the market, and we are looking forward to partnering with them to deliver Australia’s next significant new gold mine.

“Importantly, the contract terms are in line with the mining unit costs outlined in the KOTH FFS. Operational efficiencies and cost benefits have been realised in having both mining operations managed by a single contractor.

“Given the current tightness in the labour market in Western Australia’s mining sector, we believe Macmahon is well placed to secure the skilled resources required to operate the underground and open pit mines at KOTH.”

Macmahon contemplates underground shift to battery-electric utility vehicles

One of Australia’s leading contract miners, Macmahon, says it is considering the use of the battery-electric Bortana EV model for its greater underground operations in the future.

The company made the admission after announcing the arrival of two Agrale Marruá AM200 light utility vehicles for its underground mining contracts (pictured). One of these – the dual cab version – is already in use and on site at BHP’s Leinster nickel operation in Western Australia.

Originally built for the Brazilian army, Macmahon has previously trialled these Tier 4 diesel engine utility vehicles, saying they are equipped to deal with what the underground mining environment throws at them.

“With the body, doors and tray all made from galvanised steel, along with a heavy-duty chassis, these corrosion-resistant vehicles are built to withstand the harsh underground environment,” it said.

Macmahon’s previous vehicles had a lifespan of 3-5 years, and it is expecting an operating life of up to six years minimum with Marrua, predicting these AM200s could last 8-10 years.

“This means, over time, we will have reduced maintenance and run cost due to the heavy-duty driveline components,” it said.

The company added: “Looking to the future, we’re also considering the electric Bortana EV model for our greater underground operations.”

The Bortana EV, which has a chassis of a diesel-powered Agrale Marruá, electric technology from 3ME and Safescape’s design and engineering expertise, has been trialled all over Australia. This includes a stint at Kirkland Lake Gold’s Fosterville mine, in Victoria; a test at Mincor’s Long nickel mine, in Western Australia; and a try-out at IGO’s Nova operation, also in Western Australia.

Macmahon banks coal mining work with Foxleigh joint venture

Macmahon Holdings confirms it has been selected as the preferred tenderer to provide equipment hire and maintenance services at the Foxleigh joint venture operation in Queensland, Australia, from March 1, 2021.

The Foxleigh mine is an open pit, truck and excavator operation in the Bowen Basin, which produces low volatile PCI coal for Asia steel mill customers.

The proposed scope of work for Macmahon involves the hire and maintenance of 21 large capacity dump trucks and other ancillary equipment over a five-year term, together with the maintenance of client-owned equipment.

Macmahon estimates this work will generate around A$250 million ($177 million) in revenue and require capital expenditure of circa-A$50 million. Most of this capital expenditure will be to acquire 220 t dump trucks, which are expected to have a useful life of 10 years, Macmahon says.

Michael Finnegan, CEO and Managing Director of Macmahon, said: “We are very pleased to be selected as the preferred equipment and maintenance provider for the Foxleigh project, and we are looking forward to delivering for a new client in Queensland. This selection highlights our expertise in sourcing and maintaining large scale mining equipment and our ability to offer a range of service models to our clients.”

Foxleigh is jointly owned by QMetco, POSCO Australia and Nippon Steel Australia.

Macmahon’s GBF wins contract extension at Silver Lake’s Mount Monger ops

Macmahon Holdings’ acquisition of underground contracting business, GBF Group, is already paying off, with GBF receiving a conditional letter of intent from Silver Lake Resources for further work at the Mount Monger gold operations in Kalgoorlie, Western Australia.

GBF has been operating at Mount Monger since 2014 and currently provides mining services to the Daisy Complex, Cock-eyed Bob and Maxwells mines, which form part of this operation, expected to produce 120,000-130,000 oz of gold-equivalent in Silver Lake’s 2020 financial year.

Under the new letter of intent, GBF’s tenure at these sites will be extended for three years from March 1, 2020, and GBF will also develop Silver Lake’s new Santa mine, due to commence next month.

GBF estimates the value of the new work with Silver Lake will add around A$200 million ($134 million) to its order book. The two companies will now negotiate the formal mining services agreement, with finalisation expected in March, Macmahon said.

Macmahon CEO and MD, Michael Finnegan, said: “The new work is an important milestone in our strategy to further expand in the underground market, and demonstrates the value in our GBF acquisition. We are looking forward to working closely with Silver Lake on this project and building on our relationship with this key client.”