Macmahon wins $25m Northern Star contract

Mining services provider Macmahon Holdings has secured new work from Northern Star Resources following $1.3 billion in recent contract wins.

Northern Star has contracted Macmahon for $25 million to provide services to the Julius deposit, as part of the goldminer’s Jundee operations in the northern Goldfields.

The one-year contract follows recent agreements with miners St Barbara, Anglo American and Red 5.

Macmahon secured a $500 million contract from Victoria’s St Barbara to provide services to the Gwalia underground mine in Western Australia for five years.

The Anglo American contract, worth $200 million, is for services at the Dawson South mine in Queensland for a three-year period while the $650 million Red 5 contract is for services at the King of the Hills project in WA over five years.

Macmahon chief executive Michael Finnegan said the business continued to build on its track record for delivery and advance its growth strategy.

“It is very satisfying to have secured significant new work during FY21, which provides us with a strong order book and excellent earnings visibility for FY22 and FY23,” he said.

“The underground work at Gwalia and King of the Hills also adds scale to our underground business, which is an important step in our strategy to diversify Macmahon.

“Despite the challenges of COVID-19, a tightening labour market and adverse foreign exchange movements, I am very pleased with our performance this year.”

Macmahon expects to have generated between $1.3 billion and $1.4 billion in revenue for the full 2021 financial year and underlying earnings in the range of $90 million to $100 million – both in line with guidance and similar to Macmahon’s FY20 results.

The company says it has begun work on all the above projects.

Its shares closed up 2.4 per cent today to trade at 22 cents.