Perenti Global will exit from two Burkina Faso operations following an ambush on its employees last month, but will continue operating three other mines in the country. The contractor also announced today several new contracts in Australia and Africa.
Perenti Global will exit from two Burkina Faso operations following an ambush on its employees last month, but will continue operating three other mines in the country. The contractor also announced today several new contracts in Australia and Africa.
In early November, a convoy of buses containing staff from Perenti’s African Mining Services (AMS) business came under attack, resulting in a number of casualties and injuries, near Canadian miner SEMAFO’s Boungou gold mine.
Perenti has demobilised its AMS workforce and has issued a ‘force majeure’ in relation to the Boungou project, and is currently in discussions with SEMAFO to ensure an orderly contract termination.
The company said it would also exit its AMS contract with Nordgold’s Bissa mine, also in northern Burkina Faso, but would keep three other contracts – Sanbrado, Siou and Yaramoko – which Perenti said were in a lower risk region in the central part of the country.
Perenti Global managing director Mark Norwell said the attack near Boungou had prompted the company to reassess where and how it was prepared to operate.
“We have decided to take steps to move towards ceasing operations in Burkina Faso’s higher-risk locations given the current security situation,” he said.
“We will work closely with SEMAFO and Nordgold as required to ensure minimal disruption to their operations.”
Mr Norwell said the contract terminations would have an immaterial impact on Perenti’s earnings guidance for FY20.
“We do see potential upside through reducing the need for new capital and increasing our cash position, driven by the sale or relocation to Sanbrado of assets currently deployed,” he said.
Perenti will remove planned capital expenditure of $10 million in FY20 at both the Boungou and Bissa sites.
It said it would work with Nordgold and SEMAFO (should the Boungou contract be terminated) to give both miners the opportunity to buy or hire property, plant and equipment, which Perenti estimated to have a combined written-down value of around $85 million.
The company also announced today its Surface Mining group has secured $165 million in new and extended contracts, including a six-month contract with Downer for drill-and-blast operations at the Eliwana project in the Pilbara.
Perenti has also secured a three-year drill-and-blast contract at the Middlemount coal mine in Queensland, run by a joint venture between Peabody Energy Corporation and Yancoal Australia, as well as a four-year exploration contract at various sites with a major coal producer at the Bowen Basin project, also in Queensland.
Mr Norwell said works under the contracts were across a range of commodities and reflected the company’s diverse capabilities.
“It adds to the positive progress being achieved under the leadership of recently appointed Surface chief executive Scott Winter, including improvements to our African surface mining business (AMS),” he said.
AMS recently signed a $235 million, five-year contract with West African Resources at the Sanbrado gold project in central Burkina Faso and received a 12-month contract extension from AngloGold Ashanti for open pit mining services at the Iduapriem gold mine in Ghana, which Perenti said would generate revenue of $45 million.
Shares in Perenti have risen 0.77 per cent to trade at $1.96 per share, as at 4:10pm AEDT.