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Highlights:
- Macmahon Holdings (ASX:MAH) will spearhead the development of the Awak Mas Gold Project in South Sulawesi, Indonesia, under a seven-year contract with Indika Energy.
- The A$463 million project involves open-cut mining operations, utilizing Macmahon’s existing equipment and minimizing capital expenditure.
- Awak Mas is projected to produce 100,000 ounces of gold annually, supported by reserves totaling 26.9 million tonnes.
Macmahon Holdings (ASX:MAH) has been awarded a pivotal contract to lead the development of the Awak Mas Gold Project in South Sulawesi, Indonesia. The contract was secured with Indika Energy, marking a significant milestone for the Australian mining and construction company. This project represents a crucial step in expanding operations in the international gold sector.
The Awak Mas Gold Project, estimated at A$463 million, involves extensive open-cut mining operations. Macmahon Holdings is tasked with managing drilling, hauling, and development activities. The project site was first identified for its gold prospectivity in the 1980s, demonstrating a longstanding interest in its mineral wealth.
Macmahon will commence operations on-site in the first half of the 2025 calendar year. The company plans to deploy equipment from its existing fleet, a strategic decision designed to reduce upfront capital expenditure. Current CapEx expectations of $230 million for FY25 already account for Awak Mas operations, ensuring no deviation from Macmahon's financial projections.
Expected earnings from the project are estimated between $160 million and $175 million annually, reinforcing its contribution to the company’s secured revenue pipeline. CEO Michael Finnegan emphasized the importance of the partnership with PT Masmindo Dwi Area (PT MDA), a subsidiary of Indika Energy, noting the collaborative effort over the past year to secure the deal.
The Awak Mas deposit contains 26.9 million tonnes of gold reserves, with an expected annual production of 100,000 ounces. The deposit is characterized by low levels of fine-grained disseminated sulfides, enhancing its mining viability.
The project faced a tumultuous history before reaching this stage. Former developer Nusantra Resources, once listed on the ASX, led the project before encountering operational difficulties exacerbated by the COVID-19 pandemic. These challenges prompted a reassessment of the project's feasibility in 2021.
Macmahon’s involvement is expected to reinvigorate the development of Awak Mas, leveraging its expertise in large-scale mining operations and its ability to optimize costs through efficient resource utilization.
The Awak Mas Gold Project stands as a testament to the potential of collaborative industry partnerships and the strategic use of existing assets. Its contribution to Macmahon’s growing portfolio reinforces the company’s position in the global mining industry.
