PERTH (miningweekly.com) – Gold miner Beadell Resources and contract miner MACA have mutually terminated the openpit mining contract for the Tucano gold mine, in Brazil
Beadell said on Friday that MACA and its Brazilian subsidiaries will cease mining services immediately, with mining at Tucano to be conducted by a combination of owner mining and the existing Brazilian mining contractor on site.
The miner told shareholders that the move to a single mining contractor will lead to operational efficiencies and reduce mining cost at Tucano. The move will also allow Beadell to reap the benefits of a mature and comprehensive supply chain, significant in-country fleet capability and experienced Brazilian management.
“It is a significant step forward for Tucano as we continue on our cost reduction and operational efficiency turnaround plan,” said CEO and MD Simon Jackson.
“A large single Brazilian based mining contractor is the most sensible and practical way forward for the mine. We appreciate MACA’s willingness to work with us to come to a resolution on the best path forward for Beadell and we wish them the best in their future projects.”
Under the agreement with MACA, all amounts owing to the contract miner, including unpaid invoices, unbilled accruals, loans, termination costs, demobilization and fleet purchase costs will be consolidated into one loan with an initial payment of A$3-million, due following the closing of Beadell’s $23-million capital raise, announced in May this year.
A further payment of A$3-million will be due at the end of March next year, followed by monthly payments of A$1.5-million starting on July 2019, until the loan is repaid, or by the end of June 2022, whichever is earliest.
The total loan amount is around A$61-million.
Beadell noted that the loan would attract interest payable quarterly, at a rate based on the Reserve Bank of Australia cash rate plus 5% a year.
Beadell will work with MACA to put in place subordinate security arrangements for the loan, subject to the consent of existing financiers. The agreement also contains provisions in which MACA could elect to convert some of the debt into Beadell shares, subject to regulatory approvals.
The Tucano mining contract was due to expire in November 2019.