Red 5 has confirmed that Macmahon Contractors will undertake a five-year open pit and underground mining services contract at the King of the Hills gold project in Western Australia.
The contract was secured after Red 5 signed a letter of intent with Macmahon for the contract in March.
Red 5 completed a tender process in late 2020 for the open pit and underground mine contracts at King of the Hills.
According to Red 5 managing director Mark Williams, Macmahon has the skills to service King of the Hills amid the tight labour market for mining in Western Australia.
“We’re pleased to have finalised agreed contract terms with Macmahon and formally appointed them as our open pit and underground mining contractor,” he said.
“Macmahon is one of the strongest mining contractors in the market and we are looking forward to partnering with them to deliver Australia’s next significant new gold mine.
“Importantly, the contract terms are in line with the mining unit costs outlined in the King of the Hills final feasibility study.”
Macmahon Contractors is a subsidiary of Macmahon Holdings.
Williams said having both the open pit and underground mines at King of the Hills running under a single contract has significant benefits.
“Operational efficiencies and cost benefits have been realised in having both mining operations managed by a single contractor.”
According to the King of the Hills final feasibility study, the project has 2.4 million ounces and a 16-year life of mine.
The project has an initial 5-year underground mining operation.
Red 5 is expecting to pour first gold at King of the Hills by mid-2022.