Barminco awarded contracts at Sirius Nova nickel mine
Barminco is pleased to announce it has been awarded two contracts by Sirius Resources NL at the Nova Nickel Mine.
Barminco has been awarded a contract for the excavation of a boxcut and portal, and subsequent underground mining. The contract is worth $129 million over three years, with an option to extend the contract a further one year.
Barminco was announced as preferred tenderer for the contract by Sirius in November 2014 and excavation of the box-cut commenced on Australia Day. The portal construction and underground mine development will commence by April 2015. Approximately 130 people will be employed at its peak.
In addition, Barminco has been awarded a $5 million contract to construct and supply the batch plant at Nova. The plant will take approximately two months to construct, with works expected to commence at the end of February 2015.
Barminco Chief Executive Officer Peter Stokes said: "We are delighted to have won these contracts with Sirius to develop the world class Nova deposit and look forward to delivering safe and efficient outcomes for Sirius."
Mr Stokes said the contracts build on a solid second half CY2014 for Barminco, with in excess of $430 million in contracts won since September 2014. Aside from Sirius, Barminco has been awarded:
- September 2014 – $190 million contract extension at Western Areas' Spotted Quoll and Flying Fox nickel mines (initial two year term, with options to extend).
- November 2014 – $110 million contract at MMG's Rosebery mine (initial three year term, with an option to extend).
The Barminco Diamond Drilling division has also increased its works during this time with 25 rigs in operation at projects in Australia and Egypt.
Meanwhile, ongoing cash earnings from Barminco's operations have also been enhanced through the repurchase of US$56.9 million high yield bonds, completed in two transactions, one in December 2014 and another in January 2015. The repurchase was funded through unwinding a cross-currency swap, meaning no existing cash reserves were used, and will provide an annual saving in cash interest of A$3.7 million.
Mr Stokes said: "It is no secret companies providing services to the resources sector have endured tough conditions for an extended period now.
"However, we have worked hard to respond to this market by implementing targeted efficiency improvements and a cost-management strategy that has established Barminco as a leader in providing the most productive and efficient outcomes for clients.
"It is pleasing to see that Barminco's expertise, experience, efficiency, and strong focus on safety is being recognised by the market.
"Importantly, our operations are supported by a business structure that provides significant flexibility for Barminco to invest in our people, equipment, and fleet, which ensures we can continue to deliver the highest quality outcomes."
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