St Barbara puts Gwalia in the hands of Macmahon

The Gwalia mine is three kilometres south of the town of Leonora, Western Australia. Image: St Barbara

St Barbara has awarded a $500 million mining services contract at the Gwalia gold mine in Western Australia to Macmahon Holdings.

The initial five year contract will have the option to extend for a further three years, and will involve mine development, ground support, production drilling and blasting, loading and trucking, shotcreting and paste fill reticulation.

St Barbara managing director and chief executive officer Craig Jetson said the lengthy tender process was worth the wait.

“St Barbara is delighted to appoint Macmahon as a key partner in our commitment to instil a performance-led culture at Gwalia,” he said.

“This change is indicative of St Barbara’s determination to enliven Gwalia’s future, to safely and sustainably rebuild operational performance and to secure future investment by delivering predictable and strong financial returns.”

Macmahon will replace Byrnecut,  who has worked at Gwalia since 2012, employing 270 workers with the majority fly-in, fly-out (FIFO).

St Barbara expects the operation’s headcount to remain at similar levels, and thanked Byrnecut for their time in Leonora.

“We would like to thank Byrnecut for their service over the past seven years and look forward to an orderly and effective transition. During the handover period, management will be focused on the well-being of our people and continuity of operations,” Jetson said.

Macmahon managing director and chief executive officer Michael Finnegan was equally pleased with the deal.

“We are delighted to be selected for the Gwalia operation by St Barbara, a well-established and respected gold producer,” Finnegan said.

“We will work very closely with our new client to ensure continuity of operations during the transition period. This new project will make an important contribution to our strategic objective to diversify and expand our underground business.”

The Gwalia mine hasn’t been without its share of issues, as St Barbara has been forced to manage unexpected production losses.

Just 64,000 ounces of gold were produced at Gwalia in the second half of last year, compared with around 80,000 ounces in the prior corresponding period.

Last September saw a loss in production around 8000 ounces – a decrease to annual production of 2 per cent – after a large firing caused seismic events of a magnitude up to 1.9.

St Barbara has since implemented a transformative operational program called Building Brilliance to improved productivity across the mine.

The mining services agreement between St Barbara and Macmahon is expected to be signed later this month.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.