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Perenti to exit 'higher risk' northern Burkina Faso

2nd December 2019

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed mining services provider Perenti, through its subsidiary African Mining Services (AMS), has issued a force majeure notice at the Boungou project, in Burkina Faso, and has flagged its intention to exit the Bissa contract, with Norgold, following an attack on staff members in November.

Canadian miner Semafo last month reported that 37 workers had been killed and more than 60 others were injured on the road to its Boungou gold mine when gunmen ambushed a convoy of buses transporting employees to the mine site. Out of those killed during the incident, 19 were staff from AMS, with a further 26 of those injured employed by the company.

Perenti on Monday said that AMS was in discussions with Semafo regarding the force majeure event, and would work with the Canadian miner to ensure an orderly termination of the contract, should the force majeure circumstances continue.

The company has also sought advice from external security consultants and government agencies, and has taken the decision to exit the Bissa contract, also in northern Burkina Faso.

The Bissa contract was due for renewal at the end of December; however, AMS has notified Norgold that it would exit by December 14. AMS is currently working through an exit and assist plan with Norgold.

Perenti currently has three other operating contracts in central Burkina Faso, including at the Sanbrado gold mine, which the company said posed lower risk. Perenti would continue to operate at these sites while monitoring the ongoing security situation and has precautionary controls in place to commensurate with the stated threat assessment.

“We have decided to take steps to move towards ceasing operations in Burkina Faso’s higher risk locations given the current security situation. We believe it is necessary to act swiftly and decisively in the wake of the attack earlier this month,” said Perenti MD Mark Norwell.

“We’ll work closely with Semafo and Norgold as required to ensure minimal disruptions to their operations. We expect our cessation of operations at these sites to have an immaterial impact on our 2020 earnings guidance.

“We do see potential upside through reducing the need for new capital and increasing our cash position, driven by the sale or relocation to Sanbrado of assets currently deployed.”

Edited by Creamer Media Reporter

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