Byrnecut wins $200m Sandfire contract

Mining contractor Byrnecut has been awarded a $200 million contract for underground mining at Sandfire Resources' DeGrussa copper-gold mine near Meekatharra.

The contract was awarded following a competitive tender process and has a three-year term with an option to extend for a further two years.

It comes ahead of the expiry of an existing three-year contract with West Perth-based Australian Contract Mining, which lifted production at DeGrussa to its steady-state level of 1.5 million tonnes per annum.

Byrnecut, Western Australia's fifth-largest mining contractor according to Business News IQ data, will employ about 150 people in what will be the single largest operational contract at DeGrussa.

Sandfire expects the contract to reduce gross mining costs at DeGrussa by more than 10 per cent, in line with efforts to streamline operations at the project and lower contract costs across the resources sector.

"We want to build on our excellent track record at DeGrussa to ensure that we remain one of Australia's most efficient, profitable and safe underground mines for many years to come," Sandfire chief executive Karl Simich said.

Sandfire plans to provide updated cost guidance when it issues its June quarterly presentation.

Byrnecut's major Australian contracts include underground mining services at Newcrest Mining's Telfer gold mine, Northern Star Resources' soon-to-be acquired Jundee gold mine, and St Barbara's Gwalia gold mine.

Sandfire shares closed the day's trade 12 cents lower at $5.96.