NRW Holdings has updated its contract with Gascoyne Resources at the Dalgaranga gold project in Western Australia, adding around $180 million to the agreement.
This update stems from an extension of both mining and drill and blast services for the entire mine life of the Dalgaranga project.
The contractor, which is a shareholder of Gascoyne, also now holds nearly 37 million shares in the gold development company, valued at $19.6 million.
NRW chief financial officer Andrew Walsh said the company had worked closely with the Gascoyne team and administrators at FTI Consulting to support a recapitalisation plan at the gold miner.
He added that NRW recognised that a viable Dalgaranga project was critical to the success of that process.
“Output from the project has been consistently above 6000 ounces a month for the most of this year, which has provided the basis for a great solution for both Gascoyne and NRW,” Walsh said.
“Recent announcements on potential additional resources will provide opportunities for NRW to provide additional services beyond the current life of mine plan.”
Gascoyne expects to produce around 400,000 ounces of gold at an average all-in sustaining cost of $1400–$1500 an ounce over the remaining life of Dalgaranga’s mine.
However, the company intends to undertake reverse circulation drilling to increase the Dalgaranga mineral resources near the current pit.
Gascoyne entered administration following a material cash shortfall last year. The company is, however, completing a restructuring process.