Macmahon Secures $172m Underground Mining Contracts in WA Gold Belt
Macmahon Holdings has bolstered its orderbook with $172 million in underground mining contracts at the Deflector Gold Mine and Genesis Minerals’ Gwalia and Ulysses projects in Western Australia.
- Awarded $105 million underground contract at Deflector Gold Mine
- Secured $67 million contract for Genesis Minerals’ Gwalia and Ulysses projects
- Contracts commence in 2025 with no additional capital expenditure beyond sustaining levels
- FY25 earnings guidance remains unchanged despite new contract awards
- Strengthens Macmahon’s presence in Western Australia’s gold mining sector
Macmahon Expands Underground Mining Footprint
Macmahon Holdings Limited (ASX – MAH) has announced a significant boost to its secured orderbook with the award of two major underground mining contracts in Western Australia. The company will provide mining services at the Deflector Gold Mine near Murchison and at Genesis Minerals’ Gwalia and Ulysses projects in the Leonora region, collectively valued at $172 million.
The Deflector contract, valued at approximately $105 million, covers a two-year period commencing in May 2025. Macmahon’s scope includes all underground mining services, development, production, and associated works. Importantly, the contract requires no capital expenditure beyond sustaining levels, reflecting the company’s existing operational presence and deployed fleet at Deflector.
Strengthening Ties with Genesis Minerals
In parallel, Macmahon has confirmed a $67 million contract with Genesis Minerals Limited (ASX – GMD) to serve as the mining contractor for the Gwalia and Ulysses gold projects. This new agreement replaces a previous contract and is set to commence in April 2025. The scope similarly encompasses comprehensive underground mining services and associated works.
Genesis’ projects are key assets in its strategic growth plans for the Leonora region, and Macmahon’s continued involvement underscores a strong and collaborative relationship. CEO Michael Finnegan expressed confidence in building on this partnership, highlighting the company’s commitment to supporting Genesis’ operational goals.
Financial Outlook and Operational Implications
Despite these substantial contract awards, Macmahon’s FY25 underlying earnings guidance remains unchanged. The company has confirmed that total capital expenditure for FY25 is expected to stay at $230 million, with no incremental capital required for these new contracts beyond sustaining capital.
This stability suggests that Macmahon is leveraging existing assets and operational efficiencies to deliver on these projects without additional financial strain. The contracts also reinforce Macmahon’s position as a contractor of choice in the competitive Western Australian underground mining sector, particularly within gold mining.
Looking ahead, these contracts are likely to provide steady revenue streams and operational continuity for Macmahon, while also enhancing its reputation and relationships with key mining operators in the region.
Bottom Line?
Macmahon’s latest contract wins solidify its foothold in WA’s gold mining underground sector, setting the stage for steady operational momentum in 2025.
Questions in the middle?
- How will Macmahon manage operational risks across multiple underground sites simultaneously?
- Could these contracts lead to further extensions or new opportunities with Genesis Minerals or other operators?
- What impact might these contracts have on Macmahon’s competitive positioning against other mining service providers?
