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Ausdrill wins mining contracts worth over $500 million

Published: 21:30 28 Dec 2016 GMT

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Ausdrill has won two mining contracts in West Africa.

The company will provide mining services for Hummingbird Resources (LON:HUM) at the Yanfolila gold mine in Mali, where mine construction is currently underway ahead of first gold pour in 2017.

The contract is expected to generate about $147 million in revenue over three years, with mining anticipated to commence in the second half of 2017.

Ausdrill has also received a letter of intent from a subsidiary of Semafo Inc (TSE:SMF), for the award of a mining contract at its Natougou project in Burkina Faso, West Africa.

The company will provide contract mining services to the Boungou gold mine, which forms part of the Natougou project.

The contract is expected to generate about $370 million in revenue over a contract term of five years, with mining expected to commence in April 2017.

Incidentally, Ausdrill accomplished a significant business turnaround for the year ended 30 June 2016, earning a profit from continuing operations of $20.2 million.

The company closed its books in FY2016 with a strong balance sheet supported by increased cash flows, delivering a cash reserve of $181.9 million.

Importantly, Ausdrill’s revenue target for FY2017 is $800 million, with an anticipated profit uplift of 50% on continuing operations.

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