Cimic wins $107m Heron contract

Heron Resources has awarded CIMIC Group subsidiary Sedgman a $107 million engineering, procurement and construction contract for a processing facility at its Woodlawn zinc-copper project south of Sydney.

Sedgman will build a 1.5 million tonnes per annum mineral processing plant at the $151.6 million Woodlawn project under the contract, which comes with cost under-run and performance incentives to promote early completion and an under-budget result.

“This contract award follows the successful undertaking of a front-end engineering design program that included a value engineering approach incorporating significant improvements on the earlier feasibility study work,” Heron managing director Wayne Taylor said.

“We are very pleased to be working with Sedgman as they have demonstrated their ability to provide a superior solution with technical and commercial advantages, having already delivered a reduction in projected capital expenditure.

“The execution of this contract represents another important milestone in Heron’s progress to become an important Australian zinc producer.”

First production at Woodlawn is expected in late 2018.

The cost of the project includes $105.8 million of plant and infrastructure, $13.2 million of underground mine establishment costs, $20.2 million of engineering and owners’ costs, and $12.4 million of contingency.

In a statement, Heron said it was in advanced discussions with debt and equity providers, and expected those discussions to be completed within the current quarter.

Heron shares were 9.8 per cent higher to 10 cents each at 10:30am.