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Highlights
- Macmahon secures a $463 million mining contract for the Awak Mas Gold Project.
- Seven-year contract with potential extension for additional five years.
- Capital expenditure remains stable, with no change to net debt expectations.
Macmahon Holdings (ASX:MAH), an Australian leader in mining and civil infrastructure services, has secured a landmark contract worth $463 million with PT Masmindo Dwi Area’s subsidiary, PT Indika Energy, for the Awak Mas Gold Project in Indonesia. This new project boosts the company’s expansion within Southeast Asia, further solidifying its strong position in the mining services sector.
Under the terms of the agreement, Macmahon will provide extensive open cut mining services at the Awak Mas Gold Project. These include key operations such as drilling, loading, hauling, and overall mine site development. The project will commence in the first half of 2025, with a seven-year agreement that includes an option for a five-year extension, depending on the project's success and evolving needs.
Michael Finnegan, CEO of Macmahon, expressed confidence that the Awak Mas Gold Project presents a fantastic growth opportunity for the company, particularly due to its existing relationships with key stakeholders. "This project will add to our secured work in hand, and we are pleased to have negotiated a low-capital solution utilizing our existing fleet and variable leases," Finnegan stated.
Regarding capital deployment, Macmahon will begin the project with key mining equipment sourced from its existing fleet. A $17 million growth capital expenditure will be allocated over the first four years to support this new initiative. The growth capital is part of Macmahon’s broader financial strategy, which includes a yearly capital investment of $30 million.
Despite the significant scale of the Awak Mas project, the company maintains a steady financial outlook. Its total capital expenditure for the current fiscal year remains at $230 million, which includes the planned growth capital. Net debt for FY25 is also expected to stay unchanged, and Macmahon has reaffirmed its underlying earnings guidance, with projections between $160 million and $170 million.
Macmahon Holdings (ASX:MAH), headquartered in Australia, continues to deliver excellence in mining and infrastructure services across its domestic operations and Southeast Asia. This new contract further enhances Macmahon’s ability to provide specialized mining services on large-scale international projects.
