Macmahon wins $200m Silver Lake contract

Macmahon Holdings has received a letter of intent from Silver Lake Resources for further work at the Mount Monger gold operations, including development of the new Santa mine.

Macmahon's recently-acquired underground mining business GBF Group has been providing services to Silver Lake since 2004 at its Daisy Complex, Cock-eyed Bob and Maxwells mines, which form part of the Mount Monger operations.

The Mount Monger gold camp is located approximately 50 kilometres east of Kalgoorlie, in Western Australia's Goldfields region.

GBF’s tenure with Silver Lake has been extended for three years under the new contract, which GBF has estimated would add approximately $200 million to its order book.

The company will now also develop Silver Lake’s new Santa mine, with works due to begin in March. 

Silver Lake and GBF will negotiate the formal mining services agreement, with finalisation also expected in March.

Macmahon managing director Michael Finnegan said the new work demonstrated the value of the GBF acquisition, which was completed mid-last year.

Macmahon purchased the contracting business mid-last year for an upfront payment of $48 million in cash, and the potential for two further earn-out payments, subject to GBF achieving agreed performance hurdles.