Beadell axes Australian mining services contractor to cut costs
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Gold producer Beadell Resources has decided to cut ties with its Australian mining services contractor and stick with its Brazilian contractor.
The junior (ASX:BDR) told investors today it had reached a mutual agreement with Perth-based MACA to terminate the open pit mining contract for the Tucano mine.
Shares dipped 3 per cent to an intra-day low of 6.6c this morning on the back of the news.
Mining will now be done through a combination of owner mining and using the existing Brazilian mining contractor on site.
Beadell said the move to a single experienced Brazilian mining contractor on site will lead to operational efficiencies and reduced mining costs at Tucano.
“It is a significant step forward for Tucano as we continue on our cost reduction and operational efficiency turnaround plan,” chief Simon Jackson told investors.
“A large single Brazilian based mining contractor is the most sensible and practical way forward for the mine.”
Last year the company booked a loss of $101.2 million, falling from a net profit of $22.3 million in 2016.
Chairman Craig Redhead said at the AGM last month that 2017 was an “extremely challenging year” for Beadell.
Lower gold production and sales, higher costs due to the strengthening of the Brazilian real against the Aussie dollar and bigger write-downs weighed on Beadell’s bottom line.
In the past year, Beadell has lost 71 per cent of its share price value – falling from a 52-week high of 23c this time last year.
The company revealed in March that it had struck a merger deal with Canada’s Golden Harp Resources.
The new merged company will be named Americano Mining Inc and will apply to list on the ASX and retain its TSX-V listing.
Beadell is in the process of completing a $US23 million capital raising to upgrade the processing plant and optimise the mine plan at Tucano.
The company hopes this will lead it to positive cash flow from the mine.
Beadell has been contacted for comment.