Byrnecut wins $152m West African contract

West African Resources has awarded a five-year, $152 million underground mining contract to fellow Perth-based miner Byrnecut at its Sanbrado gold project in Burkina Faso.

Byrnecut will establish an underground portal beneath the M1 South open pit, with development on the portal set to commence in March 2019.

Mobilisation activities for concurrent mining of the open pit and from the surface and underground are set to begin in December 2019.

The mining services contractor will also be responsible for ore driving, decline and level development, stope production, raise drilling and cemented rock back fill at the project.

In a statement to the ASX, West African said it would enter into a deferred payment plan with Byrnecut of up to $US10 million.

The company also said debt funding for Sanbrado would be finalised this year.

Earlier this month, Lycopodium secured an engineering contract from West African Resources at Sanbrado.

The Sanbrado project is West African Resources’ primary focus, while for Byrnecut Sanbrado is its second site in Burkina Faso and fifth project in West Africa.

 “We are very pleased to award the underground mining contract to Byrnecut who have a long history providing underground mining services globally and have current operating experience in West Africa,” West African managing director Richard Hyde said.

The company said it expects to award the open-pit contract for the project in the first quarter next year.

“Byrnecut will bring more than 30 years of operational experience to Sanbrado and look forward to ensuring West African’s targets are met, while providing a safe operating environment for both client and contractor,” Byrnecut executive chairman Steve Coughlan said.

Byrnecut Offshore currently employs over 1,200 people with operations currently in the Democratic Republic of the Congo, Mali, Burkina Faso, Saudi Arabia and Tanzania.

The Byrnecut Group has $1.5 billion annual turnover and 3,500 employees worldwide.

Shares in West African were down 5.1 per cent to trade at 28 cents each at the close of trade.