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Ausdrill target secures major AngloGold extension

Ausdrill (ASX: ASL) acquisition Barminco has won a A$700 million (US$500 million) contract extension at AngloGold Ashanti’s Sunrise Dam gold operation in Western Australia.
Ausdrill target secures major AngloGold extension Ausdrill target secures major AngloGold extension Ausdrill target secures major AngloGold extension Ausdrill target secures major AngloGold extension Ausdrill target secures major AngloGold extension

The Sunrise Dam gold mine in Western Australia

Staff reporter

Barminco has been the contractor at the mine since the start of underground operations in 2003, and the extension will see it remain there for at least a further five years.

Plans are in place to boost annual production beyond the current rate of around 3 million tonnes per annum. Production is expected to rise from around 236,000 ounces of gold last year to 300,000oz this year.

Barminco is currently being acquired by Ausdrill in a A$700 million deal expected to be completed next month.

Barminco CEO Paul Muller said the company had worked hard to fully optimise productivity and efficiency, and deliver industry-leading safety and operational performance at Sunrise Dam.

"This contract extension speaks volumes about our commitment to AngloGold, the relationship we have built with them and the results that have been delivered at Sunrise Dam over the past 15 years," he said.

"We are very pleased to extend our relationship and continue work to achieve our shared vision with AngloGold to further increase annual production using our latest equipment and cutting-edge technologies."

AngloGold is eyeing long-term production from Sunrise Dam of 300,000-350,000oz per annum at all-in sustaining costs of towards US$900 an ounce, down from $1200/oz last year.

"A culture of operational excellence drives the mining strategy at Sunrise Dam where we are targeting world-leading productivity to deliver a long-life operation with consistent cash returns," AngloGold senior vice president Australia Michael Erickson said.

"This contract extension demonstrates the commitment and strong working relationship that AngloGold Ashanti and Barminco have built over many years of mining challenges while continuing to significantly improve safety and productivity."