Perth companies MACA and gold producer Beadell Resources have agreed to terminate a mining services contract at Beadell’s Tucano project in Brazil, leaving the miner to repay a $61 million loan.
Beadell said Maca would cease mining services immediately, with a combination of owner mining and the existing Brazilian mining contractor on site to take over.
The contract was signed in November 2014 and was set to run until October next year.
According to its website, Maca had 20 personnel directly employed at the project.
Maca is owed a total of $61 million from unpaid invoices, termination costs and fleet purchase costs, among other things, which has been consolidated into a singular loan.
The loan will be repaid with an initial $3 million payment, followed by another $3 million repayment in March next year, with monthly repayments of $1.5 million thereafter.
Beadell chief executive Simon Jackson said the decision would reduce the company’s costs.
“It is a significant step forward for Tucano as we continue on our cost reduction and operational efficiency turnaround plan,” he said.
“A large single Brazil-based mining contractor is the most sensible and practical way forward for the mine.
“We appreciate Maca’s willingness to work with us to come to a resolution on the best path forward for Beadell and we wish them the best in their future projects.”
Maca will retain ownership of the majority of the plant and equipment currently used at the mine.
The contractor said the termination had reduced its work-in-hand position by about $51 million, but the impact on profit was not expected to be material.
Shares in Maca were up 9.03 per cent at $1.23 at 1pm AEDT, while Beadell shares were off 1.47 per cent at 6.7 cents each.