Heron Resources has awarded a $107 million engineering, procurement and construction (EPC) contract at the Woodlawn zinc-copper project in New South Wales to Sedgman.
The contract involves development of a 1.5 million tonne per annum (Mtpa) processing plant to produce zinc, copper and lead from underground and tailings ore.
Sedgman, which is part of CIMIC Group, will also design a paste backfill plant and supporting infrastructure at the site, about 250km southwest of Sydney near Tarago.
More than 250 people will be employed on the 18-month construction project at its peak.
Award of the EPC contract follows the launch of a front-end engineering design (FEED) program at Woodlawn in October 2016 after completion of the project feasibility study
Heron Resources managing director Wayne Taylor said the FEED program included a value engineering approach incorporating significant improvements on the feasibility study work.
“The nature of the contract, which includes guaranteed maximum price and performance incentives, aligning Sedgman and Heron in delivering an under-budget and early result,” Taylor said.
He added Sedgman had demonstrated an ability to provide a solution with technical and commercial advantages, having already delivered a reduction in projected capital expenditure.
“The execution of this contract represents another important milestone in Heron’s progress to become an important Australian zinc producer,” Taylor said.
Project engineering at Woodlawn was about 20 per cent complete by March, according to Heron, which added that onsite work was scheduled to start once project financing had been secured. Production testing is expected at Woodlawn in late 2018.
Work by Sedgman prior to signing the contract enabled Heron to reduce its estimated plant and infrastructure costs by $8.7 million.
Sedgman managing director Michael Carretta described Woodlawn as one of the key Australian base metal projects.
“Leveraging both technical and commercial innovations, Sedgman has been able to add value for our client and differentiate ourselves in the market, further cementing our position as a leading resource sector EPC provider,” Carretta said.
The processing plant will be delivered in stages aligned with the development of the mine, starting with the tailings reprocessing and moving to underground processing when ore is available.
Woodlawn’s feasibility study delivered ore reserves of 2.8Mt at 14 per cent zinc equivalent (ZnEq) from underground and 9.5Mt at six per cent ZnEq from reclaim tailings ore.
Heron received its environmental protection licence from the NSW environmental protection authority (EPA) for proposed construction, mining and processing activities at the Woodlawn project in March. Woodlawn was previously mined between 1978-1998.