London-listed drilling and mining contractor Capital has picked up a small but long-term exposure to heavyweight Australian miner Fortescue Metals Group in Gabon.
Capital said a five-year engagement to provide earthmoving and crushing services for Ivindo Iron at its Belinga project in the north-east of Gabon would generate about US$30 million a year “once fully operational”.
Ivindo, controlled by FMG, says one of the world’s largest undeveloped, high-grade hematite iron ore deposits has the potential to become a globally significant mine.
Capital has increased its forecast FY23 capital expenditure guidance by about $15 million on the back of its outlay for additional equipment for Belinga. The capex guidance range is now $65-75m.
“This mining and crushing services contract is in addition to the three-year reverse circulation and diamond drilling services contract with Ivindo, announced earlier this year, where drilling recently commenced,” Capital said.
Meanwhile, the company has doubled its revolving credit facility with co-lenders Nedbank and Standard Bank to $50 million.