Australian mining contractor Macmahon announced its underground mining division has been awarded a four-year
contract with Silver Lake Resources to perform the mining works at the Deflector gold and copper mine in Western Australia.

A Macmahon subsidiary, GBF, has been providing underground mining services at the Deflector mine since mining commenced in early 2016. Macmahon acquired 100% of GBF in 2019, and it said this business is now an important part of the company’s strategy to expand in the underground mining services market.

The new contract with Silver Lake will run until April 2025, and is expected to generate approximately $220 million in revenue for the company over this period. The contract is a full service mining contract and incorporates all underground development, ground support and production activities, including the provision of all labor and mobile mining equipment.

“This new contract is an important milestone in our strategy to expand our underground business, and is a clear demonstration of the benefits we are now realizing from the GBF acquisition,” Macmahon CEO and Managing Director Michael Finnegan said. “Importantly, the Deflector mine is a high-grade gold and copper asset in Western Australia, so is an attractive project in the current macro environment. We look forward to continuing to support the development of Deflector, and to achieving further scale in the underground market.”

During the fourth quarter of 2020, the Deflector mine produced 23,790 ounces gold and 410 metric tons (mt) of copper from 143,139 mt of ore at 5 g/mt gold and 0.3% copper. Silver Lake said the tonnage and grade were lower quarter-on-quarter, reflecting an increase in capital development intensity with the commencement of decline development to access the Deflector South West lodes and the resulting reduction in ore drive development.