Not all is gold for Swick as it wins $210m of work

Swick Mining Services has announced $210 million of new work, but failed to extend three contracts at Australian gold mines.

In a company update to the ASX, Swick said it had secured $210 million of underground diamond drilling contracts, bringing its total order book to $295 million.

South Guildford-based Swick was awarded a three-year contract at Northern Star Resources’ Pogo gold mine in Alaska, which commenced on April 1 and involves eight drill rigs.

The contractor has been providing services at Northern Star’s Jundee gold mine in Wiluna since 2014.

Swick was also requested to provide three additional rigs to BHP’s Olympic Dam mine in South Australia, taking its total at the site to five.

The additional rigs are set to begin work this month and BHP extended the current agreement to April 2020.

Additionally, it was also awarded a three-year extension for its operation of four drill rigs are Kirkland Lake Gold’s Cosmo gold mine in the Northern Territory.

However, it was unsuccessful in securing an extension of its drilling contract at Kirkland’s Fosterville gold mine in Victoria, and Swick said it expected to remove its seven drill rigs from the site by the end of May.

It also failed to retain its contract under previous terms at Newmont Mining’s Tanami gold mine in the Northern Territory, and did not have its contract at Newmont’s Mt Charlotte gold operation in Kalgoorlie renewed in any capacity.

As a result, it will demobilise four of its seven drill rigs in Tanami, and both of its drill rigs at Mt Charlottle.

Swick operated at Tanami since 2008, and Mt Charlotte since 2016.

Swick managing director Kent Swick said the new work provided the company with a strong platform for the next financial year.

“What is important about these redeployments is that they are in line with our strategy of ensuring we are mobilising rigs that are delivering our target margins, whether that be at existing projects or new sites,” he said.

“Despite being unsuccessful for some work we were tending for, the new deployments ensure our deployed rig count is roughly maintained.”

Shares in Swick were up 2.5 per cent to trade at 20 cents each at 11.30am AEDT.