Newcrest Mining has increased rates for Macmahon Holdings’ work at the Telfer gold mine in Western Australia, putting an end to their contractual dispute.
Macmahon had been seeking an increase in revenue from the Telfer contracts to recover the additional cost of operating under changed conditions, including volume changes and manner and sequence of mining required.
The Perth-based contractor now expects the Telfer contract to be cash flow positive over its remaining term, with the contract set to run until January 2023.
Macmahon reiterated its 2020 financial year guidance between a revenue of $1.2–$1.3 billion, and earnings before interest and tax between $80–$90 million.
“The resolution of this dispute means we can now focus all of our attention on maximising the performance of our existing business, and capitalising on growth opportunities,” Macmahon chief executive Michael Finnegan said.
“We have several opportunities in our tender pipeline that we are pursuing from an exclusive or shortlisted position, and I am optimistic about the prospects of winning additional work in Australia and achieving further growth in our profitable operations offshore.”
Apart from Telfer, Macmahon also provides surface mining services at Independence Group and AngloGold Ashanti Australia’s Tropicana mine in Western Australia.
Macmahon also operates in Indonesia, Malaysia and South Africa.