AUSENCO SEALS DEAL IN CANADA

Written on the 11 August 2010

AUSENCO SEALS DEAL IN CANADA

AUSENCO Limited (AAX) has beaten three other mining services firms to a contract worth more than $88 million in Canada, with CEO Zimi Meka (pictured) expecting improved results in the second half of this calendar year.

The Brisbane-based company has signed a contract to provide engineering design and procurement services to Taseko Mines Limited’s (TSX:TKO) $886.86 million Prosperity gold-copper project in British Columbia.

“Generally speaking these contracts are usually worth between 10 per cent and 15 per cent of the total contract so it’s quite a large revenue base for us,” says Meka.

This equates to anything between $88.68 million and $133 million for Ausenco, following a recent $8 million central Queensland contract for the Kestrel Joint Venture between Rio Tinto and Mitsui.

“We’ve got quite a lot of project that we’ve tendered, Kestrel with Rio is one of those and I think there’s quite a lot of projects expected in the next three to six months, so I think there should be improvement in the second half (calendar year),” he says.

“Our guys in Canada have been working on the tender for the last three to four months and the client has existing operations in British Columbia, so they have the cash, it’s not their first project.

“I guess it’s up to us as management of the company to generate profit and that over time will be reflected in the share price.”

The Prosperity project has proven reserves of 831 million tonnes, including 7.7 million ounces of recoverable gold and 3.6 billion pounds of copper.

“We are pleased to have been selected as the preferred contractor for this component of a major Canadian gold-copper project,” says Meka.

“Securing this work is clear recognition of our strategic aim to grow our Minerals & Metals business presence in the Americas, building upon our strong presence in Canada and our global reputation in the design and construction of copper concentrators.

“Our work commences immediately on managing the first stage of the engineering and procurement phase of the project and ramps up as Taseko’s key project milestones are progressed.”

Ausenco has also  signed a $32 million contract with Newcrest Mining Limited (NCM) to provide engineering services for its Cadia East Project in Orange, New South Wales, which will be the country's largest underground mine when it is completed in 2013.

"The signing of this contract with for the Cadia East Project has built on Ausenco's long association with Newcrest, and work carried out for Newcrest during the study and approval phases of the Cadia East Project."


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