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A subsidiary of minerals drilling solutions provider Capital Limited has entered into a conditional 120-million-tonne openpit waste mining services contract and an expanded drilling contract at LSE-listed Centamin’s Sukari gold mine in Egypt, as part of Centamin’s operational reset. The four-year contract will start in January. Centamin has announced that it has taken the proactive measure to partially integrate contract-mining into the openpit medium-term mine plan at Sukari. This cost-effective and time efficient solution enables the company to accelerate the increased waste stripping programme and improve overall operational flexibility in the openpit, it states. "With the focus on improving operational flexibility at Sukari, introducing contract-mining over the next few years for waste stripping in the openpit is cost and time effective. "Capital is a trusted contractor to the company, with a strong understanding of Sukari and the operating environment, including the employment of local workforce and established training programmes, consistent with Centamin's approach to local workforce development," says Centamin CEO Martin Horgan. As part of the increased openpit waste stripping programme, Centamin continues to use its existing owner operator fleet, which has capacity to move 80-million to 90-million tonnes a year of ore and waste. The company, however, conducted an independent contract-mining tender process to assess incremental contract-waste stripping costs, and capacity, against the cost to expand the current owner-operator mining fleet. It was concluded that the optimal integration of contract-mining was to isolate the waste stripping workstream on the east wall of the openpit, thereby limiting the day to day interaction with the operations and simplifying operational oversight and planning from a health, safety and logistical standpoint. The east wall waste stripping programme will move material to a dedicated waste dump. Following a competitive tender process, the company has awarded Capital Egypt the conditional openpit waste mining services contract for the East wall and has also expanded and extended its existing drilling contract at Sukari. Capital Egypt will provide load and haul and ancillary services. This deal is the largest in Capital’s history and will be significantly accretive to the company’s bottom line, increasing revenue by over 40% over the duration of the contract, the company points out. "The winning of the tender for the Sukari openpit 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. "We are also pleased to have increased the scope and scale of our existing drilling contract. Having operated at the Sukari mine since 2005 . . . Capital is pleased to be deepening further its strong client relationship with Centamin in assisting with the generation of significant value to Centamin over the medium and longer term as the Sukari mine enters its next phase of gold production," comments Capital executive chairperson Jamie Boyton. Moreover, it will cement the company’s position as one of the premier mining service providers in Africa as it continues to increase its yellow fleet service, Capital enthuses. The existing drilling contract at Sukari has been extended to December 31, 2024, from September 30, 2023, and expanded by nine additional rigs, bringing the rigs operating at Sukari to 24 in total. Collectively, the Sukari contract and the amended Sukari drilling contract are expected to deliver incremental revenues of $235-million to $260-million a year based on Sukari’s mine plan at the point of tender submission. Both contracts are expected to be revenue and earnings accretive in 2021. The new business awards at Sukari build on Capital’s longstanding...