Ausdrill, Barminco win $169m contracts

An African drilling contractor jointly owned by Perth companies Ausdrill and Barminco has secured two contracts valued at $US155 million ($A169 million) for underground work in West Africa.

The announcement is below:

Ausdrill Limited (ASX:ASL) is pleased to announce that African Underground Mining Services (AUMS), a 50/50 joint venture between Ausdrill Limited and Barminco Limited, has been successful in securing a significant quantity of new underground work in West Africa.

We have received a Letter of Intent from Société des Mines de Loulo S.A (Loulo Gold Mine), 80% owned by Randgold Resources, for a US$128 million development contract at the Gara ore body in Mali over a three year period commencing April 2010. This is Ausdrill's second major contract in Mali and AUMS's first underground project in Country.

In addition we have commenced operations at the Subika Decline Exploration Project for Newmont. This is a contract worth approximately US$27m over 15 months. Subika is only one phase in potential underground mine development at Ahafo, Ghana.

AUMS has also received a Letter of Intent from Chirano Gold Mines Ltd (Redback Mining Inc) to mobilise equipment to commence the decline at the Paboase South Underground Project in April 2010, subject to the agreement of final terms and conditions. This follows on from the successful development and production contracts awarded to AUMS at Akwaaba Deeps (Red Back Mining) in FY2009.

All of these projects are indicative of the potential available to the Group in Africa that is being realised through Ausdrill's long term experience in Africa and Barminco's reputation as a skilled underground mining contractor.