EPC contract and bulk earthworks awarded to MACA Interquip for the King of the Hills Project
Award of fixed‐price EPC and bulk earth works contract means that Red 5 will have committed 82% of the KOTH capital budget of $188 million. The value of commitments to‐date is $143 million against the budget of $155 million for these capital items.
Red 5 Limited (ASX: RED) is pleased to advise that it has taken another key step towards the development of its 2.4Moz, 16‐year Life‐Of‐Mine King of the Hills Project (KOTH) in Western Australia, after issuing a Notice of Award for the Engineering, Procurement and Construction contract (EPC Contract) and the bulk earthworks for the Process Plant to multi‐disciplined mineral processing provider MACA Interquip (ASX: MLD).
The EPC contract and bulk earthworks – which encompass the KOTH processing facility, equipping of the bore fields, high voltage power distribution, workshop, warehouse and bulk earthworks – will be undertaken as a fixed‐price contract.
MACA Interquip has a strong track record of the construction of similar carbon‐in‐leach (CIL) processing plants to the 4Mtpa process plant planned at KOTH.
Following execution of the EPC Contract, commitments to‐date for the KOTH Project will total $143 million, compared to the capital budget of $155 million for these commitments – which represent 82% of the total capital budget of $188 million (excluding Owners Costs and Contingency). Commitments made to date include: Purchase of 240‐bed camp accommodation, water and waste water treatment plants and central facilities; Design and construction contract for a 450‐person village; 6Mtpa gyratory crusher and 4Mtpa SAG mill; Early Works Agreement with APA Group (ASX: APA) for the gas pipeline lateral; and EPC contract for the process facility and bulk earthworks. Construction of the village commenced in October 2020 and is on track to be operational in February 2021. The process plant bulk earthworks (for which equipment will be mobilised) are scheduled to commence on 1 December 2020, pending the final remaining permit (currently on schedule).
The EPC contract provides for two phases. The first is limited to $50 million and Phase 2 is for the remainder of the contract value, which will be released at the discretion of Red 5, based on the status of debt financing.
The Notice of Award provides for the immediate commencement of the design and procurement activities for the process plant as well as mobilisation of earthmoving equipment to site. The Notice of Award limits commitments to $10 million and is an interim measure to allow the plant design and mobilisation for earthworks to commence immediately while the contract is executed. Once executed, the value of these contracts, together with the purchase of the 6Mtpa gyratory crusher and 4Mtpa SAG mill (already awarded to MACA Interquip), is $129 million.
MLD Price at posting:
82.5¢ Sentiment: None Disclosure: Held
