African Underground Mining Services (AUMS) project is a 50:50 joint venture between Ausdrill Limited (ASX: ASL) and Barminco Holdings Pty Limited (“Barminco”). The group is happy to announce the award of a US$375 million underground mining services contract at AngloGold Ashanti’s Obuasi project in Ghana.
Earlier, the five-year contract was awarded to Underground Mining Alliance Limited (“UMA”) which was a joint venture of between AUMS and Rocksure International (a Ghanaian mining contractor) in proportion of 70/30 joint venture.
As per the contract, UMA will provide the entire underground mining services at Obuasi, where the major portion of capital equipment will be supplied by AngloGold Ashanti. It is expected that the work will commence in the first quarter of CY2019. Employment of 550 people approximately will be done for the entire duration of the project. The workforce will the major from the Ghana region with some deportees who will be providing training and development and specialist skills to the workforce.
Blair Sessions who is the Chief Operating Officer of AUMS is delighted to secure its contract with its joint venture partner Rocksure International. The Obuasi mine being very important to Ghana, the company is happy to further extend its relationship with AngloGold Ashanti and is looking forward to work with its client Rocksure as well as the local community in order to deliver this project with modern and efficient methods of mining. It is also looking forward to providing support to the local suppliers and generate employment and training opportunities for residents of Ghana.
The Chief Executive Officer of Rocksure, Kwasi Osei Ofori expresses his happiness in regards to be teaming with AUMS at this major project. This project has added the suite of contract mining work, where it was performing in Ghana and Mali over the past decade. The joint venture of Rocksure will allow Rocksure and its employees to gain new skills and knowledge in underground mining from Barminco and Ausdrill who are the world leading mining services companies.
Graham Ehm who is the Executive Vice President – Group Planning and Technical at AngloGold Ashanti, states that Obuasi as an important investment in Ghana and they have been working hard with the Government of Ghana in order to progress in the redevelopment of the mine with as a modern operation technique. Obuasi forms an important asset in AGA’s portfolio and also to the mining industry of Ghana. The stakeholders of the mine will be able to enjoy the benefits for at least two decades. This contract award is a major milestone towards continuing production at Obuasi and its outcome will benefit the overall economy of Ghana.
8 years ago, since commencing operations in Ghana, AUMS was able to train over 1,200 Ghanaians in fields of mining, engineering, and apprenticeship programs. Apart from this AUMS’s joint venture owner, Ausdrill, has a history of training 20,000 Ghanaians over a period of 27 years Ghana through its subsidiary African Mining Services (AMS). The combination of AUMS and AMS has employed 1,800 people in Ghana across five projects (one AUMS, four AMS) at present where 95% of the employees are Ghanaians. From the two businesses, revenue of A$2.8 billion is generated in Ghana and 78% of profits reinvested into the country.
For the period ended FY2018, the sales revenue has gone up by 16.4%. The key safety indicators are at low levels. The EBITDA has gone up by 30.6%. The net profit after tax has gone up by 95.7% which is equivalent to $61.1 million. The EPS is up by 74%. A declaration of final fully franked dividend of 3.5 cents is made. The company has a strong balance sheet with cash reserves of $137.3 million and gearing of 25.7%.
The current market price of the company is A$1.672 with market capitalization of A$878.38 million and PE ratio 9.48x.
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