Macmahon wins work on Silver Lake mine

ASX-listed Macmahon Holdings has secured a $220 million contract for work on Silver Lake Resources’ Deflector gold-copper underground mine in Western Australia.

Silver Lake awarded the four-year contract to Macmahon subsidiary GBF, acquired in mid-2019, which has provided services to Deflector since early 2016. Its new contract is for full-service mining work including underground development, ground support and production activities.

Macmahon chief executive Michael Finnegan said the contract was in line with the company's strategy to expand its underground business. It purchased GBF from private company GF Holdings for $48 million.

“This new contract … is a clear demonstration of the benefits we are now realising from the GBF acquisition,” Mr Finnegan said.

“Importantly, the Deflector mine is a high-grade gold and copper asset in WA, so is an attractive project in the current macro environment. We look forward to continuing to support the development of Deflector, and to achieving further scale in the underground market."

Silver Lake’s Deflector mine sits in WA’s southern Murchison region, 160 kilometres east of Geraldton, where first gold production occurred in May 2016.

Deflector produced 23,790 ounces of gold and 410 tonnes of copper in the three months to December 31, while Silver Lake's Mount Monger operations in the eastern Goldfields produced 33,776oz.

The company's shares were down 3.3. per cent at 3:04pm AEDT to trade at $1.53. Macmahon was trading 2.8 per cent higher to 25 cents.