GR awarded $107m Mt Morgans contract

Dacian Gold has formally awarded GR Engineering Services a $107.1 million contract to build processing infrastructure at its Mt Morgans gold project near Laverton.

GR Engineering was named the engineering, procurement and construction contractor for the 2.5 million tonnes per annum treatment facility and other supporting infrastructure last month.

The contract is on a guaranteed maximum price basis, with any under-run to be shared between the two companies.

The scope of work includes construction of the treatment facility, raw water supply infrastructure, workshops and offices, a site main administration complex, and construction of a new section of haul road between the new treatment facility and the existing Jupiter haul road.

Dacian will spend a further $36.6 million on other project items including a permanent accommodation village, a mine service area, road and civil works, IT and communications, and power supply and reticulation.

“We are very pleased to have finalised this key EPC contract under a guaranteed maximum price with GR Engineering,” Dacian chairman Rohan Williams said.

“This represents another significant milestone in our journey towards becoming Australia’s next significant mid-tier gold producer in just 11 months time.”

GR Engineering managing director Geoff Jones said site mobilisation was imminent.

“Entry into this contract following award of the letter of intent provides certainty in relation to the project and supports a strong start to FY18 by GR Engineering,” he said.

Award of the EPC contract follows news last week that RUC Cementation Mining Contractors, a subsidiary of South African company Murray & Roberts, was to be awarded an underground mining services contract for Mt Morgans.

GR Engineering has started work under the contract. First production is expected in the first quarter of the 2018 calendar year.

Dacian shares were 2.3 per cent lower to $1.91 each at 10:15am. GR Engineering shares were 0.3 per cent lower to $1.59 each.