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Capital Limited lands transformative new deal with Centamin

The contractor to the mining sector said the new deals for Centamin's Sukari gold mine will generate between US$235mln and US$260mln of revenue over a four year period

Capital Limited - Capital Limited lands transformative new deal with Centamin
image source: @_CapitalLimited / Twitter

Capital Limited (LON:CAPD) has landed what it described as a transformative new deal with Centamin, inking a conditional open-pit waste mining services contract for the Sukari gold mine in Egypt.

The 120mln tonne open-pit waste mining contract sees the AIM-quoted company provide load & haul and ancillary services. At the same time, Capital has also extended an existing contract with Centamin for drilling services at Sukari.

Altogether the contracts are forecast to generate incremental revenues of US$235mln-£260mln over a four-year period (starting January 1 2021).

READ: Capital to expand works at Barrick's Bulyanhulu mine

“The winning of the tender for the Sukari open-pit waste mining contract is a significant milestone for Capital - it is the largest contract win for the group since inception, adds substantial scale to our mining services division, as well as providing revenue diversification from our drilling services business,” said Jamie Boyton, Capital executive chairman in a statement.

“We are also pleased to have increased the scope and scale of our existing drilling contract.”

Boyton noted that the company has operated for Centamin at Sukari since 2005, and said it is pleased to be deepening the strong client relationship, as Centamin enters its next phase of gold production at Sukari.

To support the delivery of the new contract the company is seeking to raise £22mln via a share placing, pitched at 58p per share (Tuesday’s closing price: 63p).

Proceeds are earmarked for the purchase equipment to fulfil the Sukari contract as well as general corporate purposes. The company, meanwhile, noted that it has to date spent US$23.4mln on equipment and has already made strong progress with early works which include personnel hiring and operational planning.

“The proposed fund raise provides Capital with the opportunity to broaden and deepen its shareholder register,” Boyton added.

“Both the equity raise and the mining services contract will further consolidate Capital's position as one of the leading mining and drilling services operators on the African continent. The Capital team is looking forward to mobilising the required equipment and operational staff to start the work required at Sukari.”

Additionally, the company said it is currently active in several earthmoving tender processes with new and existing customers, as it continues efforts to evolve into a full-service mining contractor.

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