Barminco Bags Four Years’ Contract Extension With IGO

  • Oct 25, 2018 AEDT
  • Team Kalkine
Barminco Bags Four Years’ Contract Extension With IGO

Ausdrill Limited (ASX:ASL) with its leadership in providing services in contract mining, grade control, drill and blast exploration, mineral analysis, procurement and logistics and its operations spread across Australia, Africa and United Kingdom entered into an acquisition process with the leading global hard rock underground mining service provider Barminco Holdings limited. Barminco operates in mining of gold and base metal in Australia, India and Africa. Company portfolio includes underground mining services from mine development to production and underground diamond drilling. The acquisition of Barminco by Ausdrill was announced in August-2018.

Lately, ASL updated the market that Barminco bagged a four-year contract extension at Independence group NL’s (IGO) Nova nickel-copper-cobalt project. The four-year contract associated with an amount of $240 million includes an option for a two-year extension. Within the contract terms, Barminco will provide underground mining services including development and production mining.

Barminco with its close association with Nova has landed its support right from the project outset of drilling, blasting, exploration project development, excavation activities of the box-cut on Australia Day, 2015 to production and successful completion of first year of commercial production in FY2018. The company will continue its association with the IGO, through this long-term extension at Nova. 

Barminco delivered 29 Kilometers of development and 2.4 million tonnes of extraction of ore since development started in 2015. Company will work closely with IGO under the arrangement to drive further safety and productivity improvements at Nova. Barminco and IGO will together establish a technology development committee which will work on identification and implementation of innovative methods and technologies that will provide advance safety and productivity in underground mining. The technology committee will initially target projects such as early stage development of electric vehicles, enhance mine control systems, machine vision and proximity detection. Majority of the capital development work completed at Nova, has focus on incremental operational and productivity improvement process associated with stope mining activities. The four-year contract term with further extension of two years will help in unlocking the project value. The association together is committed to map and implement the productivity improvements through new and enhanced technologies. Set up of technology committee towards this objective will help in understanding and implementing the developments on broader terms.

On October 19, 2018, Barminco secured four-year contract extension at Agnew gold mine by gold fields. Under this contract, underground services at Agnew and diamond drilling contracts worth approximately A$335 million will be covered. This contract has the option of further extension of twelve month at Waroonga  with development and production activities and all associated services and diamond drilling at Waroonga and New Holland. In the year 2010, commencement of operations at Agnew started and since that time it has completed approximately 50 kilometers of development and 2.5 million tonnes of production.

The four-year contract extension received by Barminco from the Independence Group (NL) failed to show positive impact on share price movement. After making the day high of $1.65, and day low of $1.61 the ASL scrip traded at the levels of $ 1.615 on October 25, 2018.


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