Mining services company MACA plans to broaden its gold portfolio through the purchase of local private business Alliance Contracting for $5 million.
Alliance currently provides open cut mining services at Metals X’s Central Murchison project and Silver Lake’s Santa and Lucky Bay projects.
“The contract tenures range from three to 19 months and are able to be serviced utilising plant and equipment currently owned by Alliance and Maca,” Maca said in a statement.
“In addition, Alliance has depots in Karratha and Port Hedland which provide civil services to blue chip clients and local authorities.”
The acquisition, which is expected to be settled by the end of the month, will be paid in cash.
Maca chief executive Chris Tuckwell said for a modest cash payment the company’s work-in-hand position would increase by about $50 million to $1.2 billion, along with an increased exposure to gold.
“We are looking to continue the strong working relationships developed by Alliance in the past combined with our own brand of service to deliver quality outcomes for these new clients,” Mr Tuckwell said.
“The strong working capital position and balance sheet of Maca has meant that we were well placed to acquire Alliance and service the contracts with Metals X and Silver Lake profitably.”
Alliance has net tangible assets of about $6 million with hire purchase and debt facilities of $10 million.
Maca shares were unchanged at 67 cents at 12:30pm.