Newmont awards new 5yr Subika mining contract

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Underground at Subika in Ghana

Australian mining and drilling contractor Perenti has confirmed a A$630 million (US$420 million) contract for gold major Newmont at its five-year-old Subika gold mine in Ghana.

The 60-month contract was won by UMA, 70% owned by Perenti subsidiary African Underground Mining Services (AUMS) and 30% by Ghana’s Rocksure International. It runs through to the start of 2028.

Perenti will undertake all underground development and production, diamond drilling and support services at Subika, 310km north-west of Accra. Newmont is buying the current underground fleet at Subika from AUMS and is charged with acquiring new equipment.

“Perenti expects that this capital strategy will have significant benefits, but primarily will reduce the capital intensity of the project while still delivering strong returns,” the contractor said.

Part of Newmont’s Ahafo complex, Subika started commercial production at the end of 2018 after a US$186 million build. It was slated to add 150,000-200,000 ounces a year in the first five years of a 10-year initial mine plan.

Perenti’s share price was up about 9% today at A$1.26, capitalising the company at about $860 million.

The shares have climbed about 80% higher in the past 12 months.


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