Macmahon in line for $650m contract

Goldminer Red 5 has named Macmahon Holdings as the preferred mining contractor for its King of the Hills project near Leonora.

Red 5, which issued a letter of intent to Macmahon, expects to begin mining works at the 2.4-million-ounce project early next year, with first gold production scheduled for June 2022.

The project has a mine life of more than 16 years.

If contracted, Macmahon will provide all surface and underground mining works to KOTH for a five-year period, starting in the first quarter of 2022.

It expects the final contract will be finalised before June this year and will add more than $650 million to the company’s order book.

Macmahon recently secured other work near Leonora, replacing fellow Perth Airport business Byrnecut as the mining contractor for St Barbara’s Gwalia gold operations.

That five-year contract is valued at $500 million.

“We have a strategy to expand our presence across the mining services value chain, and this project highlights the benefits of being able to offer a combined surface and underground mining solution from the outset,” Macmahon managing director Michael Finnegan said today.

Red 5 managing director Mark Williams said there were operational efficiencies and cost benefits in having both mining and production operations managed by a single contractor.

The company has appointed Andrew McRae as KOTH’S mine manager.

“… He will play a key role in planning and preparations to ensure we remain on commencing activities at the KOTH goldmine in early 2022,” Mr Williams said.

Red 5’s shares were up 3 per cent at 1pm AEDT to trade at 18 cents while Macmahon was up 1 per cent to 22 cents.