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Johannesburg - Listed construction and engineering group Murray & Roberts’s (M&R) wholly-owned Australian subsidiary, RUC Cementation Mining, has secured a multimillion-Australian dollar underground mine development and production contract in Australia.

M&R said last week that the three-year contract - with an option to extend - was for underground mine development and production at gold development and exploration company Dacian Gold’s new Mount Morgans Gold Project near Laverton in Western Australia.

“We are rapidly ticking the boxes on the path to becoming Australia’s next significant mid-tier gold producer," said Dacian Gold executive chairman Rohan Williams.

"With a Letter of Intent issued last month to GR Engineering to build the new 2.5 (million tons a year) treatment plant and now to experienced (Western Australia-based) underground mining services group RUC Mining for the underground mining contract, we now have two of the key contracts in place which are required to bring Mt Morgans into gold production in less than 12 months," Williams said.


M&R group investor and media executive Ed Jardim said last week that the contract was estimated to be valued at approximately AUD$190 million (R1.9 billion).

“This award represents a major milestone in RUC Cementation Mining’s transformation from mid-level to being recognised as a top-tier mining contractor,” M&R said in a statement.

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The contract had been awarded after an extensive competitive bid process, it added.

Dacian Gold recently released a feasibility study for the project and stated that it would be spending an estimated AUD$220 million on its Mt Morgan Project, which is about 750km north-east of Perth in Western Australia.

“The mining lease area is in the Laverton gold district which is known to contain some 30 million ounces of gold, making it the second-highest endowed gold district in Western Australia.

"This is a significant award for RUC Cementation Mining and a material award for the Group’s global Underground Mining platform.

"The outlook for metals and minerals is steadily improving and it is expected that the Underground Mining platform will in the short term continue to benefit from new investment in the global mining sector,” said M&R.

Jardim said as the demand for commodities had started to improve, Murray & Roberts had seen an increase in underground projects in those regions where its Underground Mining business had presence.

“We have a presence in Africa (South Africa and Zambia), the Americas (North America and Canada) and Australasia (Australia and Asia-Pacific).

"Australia, especially, has been seeing prospects increasing,” said Jardim.

In its 2016 annual report, M&R said RUC Cementation Mining was actively exploring opportunities to further expand into the Asia Pacific region where most of its revenue was generated.

M&R shares retreated 0.53 percent on the JSE on Thursday to close at R14.95.