New deals cancel out Focus loss for MACA

Mining contractor MACA remains optimistic about its prospects of revenue growth in financial year 2013, despite losing a significant contract after Focus Minerals halted its Laverton gold operations earlier this week.

In a project update to the ASX, MACA said its outlook remained strong, and forecast its revenue for FY13 would exceed $450 million.

The contractor said its operations at Laverton were currently single-excavator only, and arrangements were being made to redeploy the equipment to other projects.

Mining operations are expected to be wound up at Laverton by the end of May.

MACA said the contract loss would be offset by a series of new works, including the restart of mining at Sinosteel Midwest Corporation’s Blue Hills project later this year.

Sinosteel announced in early February it would resume mining at Blue Hills, targeting the third quarter of the calendar year.

The Blue Hills project is planned to produce 1.4 million tonnes per year for the next three years.

Other new contracts include a recommencement of mining operations, including load and haul, drill and blast, as well as crusher feed, at Rosslyn Hill Mining’s Paroo Station lead mine.

Rosslyn Hill was formerly known as Magellan Metals, and the operation the Wiluna lead project.

MACA also said it expected to formalise a contract extension with Atlas Iron for crushing and mining services at the Pardoo iron ore mine in the Pilbara.

MACA has been providing works at Pardoo since December 2009.

“Although we are disappointed that our long term engagement at Laverton is coming to an end, we are equally delighted that Sinosteel Midwest has made the decision to commence minig at the Blue Hills project, that operations have recommenced for Rosslyin Hill Mining and that Atlas have advised us of their intention to formalise a contract extension at Pardoo,’ managing director Doug Grewar said.

“MACA operates with a prudent level of hired/subcontract services to minimise the impact of project changes.

“With long term contracts and a diversity of commodity and client exposure, MACA is well placed to maintain high levels of activity despite the current market volatility.”

A research note from stockbroker Hartleys estimated the new deals and the contract extension would add around $60 million to MACA’s annual earnings.

Hartleys estimated the hit from the Laverton gold mine closure would be between $35 million and $50 million.

Hartleys maintained its buy recommendation for MACA stock.

At close of trade today, MACA shares were up 1.3 per cent, trading at $2.25.