THE BOURSE WHISPERER: Engineering, property services and asset management and maintenance provider UGL Limited has been awarded approximately $370 million in new projects across Australia.

The company said that more than $270 million of the new contracts are focused within the resources sector.

UGL has been given the task of constructing the new Solomon mine power station for Fortescue Metals Group in Western Australia as well as the provision of rail signalling and communications systems for the Solomon Rail Spur.

The company has also signed a two year contract with international heavyweight Rio Tinto for the provision of maintenance services at the Hail Creek mine in Queensland.

Still with the big players UGL has signed a new three year contract for the provision of maintenance services at BHP Billiton Mitsubishi Alliance (BMA) coal operations’ Gregory Crinum Mine in Queensland.

UGL will be upgrading the Sydney West to Holroyd Transmission Line for TransGrid in New South Wales while carrying out a number of new power systems and power transmission projects across Queensland.

“Securing these significant new wins provides further support to the continued solid performance of our engineering businesses,” UGL managing director and CEO Richard Leupen said in the company’s announcement to the Australian Securities Exchange.

“These wins reflect the strength of our client relationships across a diversified base of blue-chip customers and are demonstrative of our ability to convert the recent record levels of tendering activity across a number of our core markets.

“A significant pipeline of opportunities remains visible supported by substantial levels of private investment and government spend.

“We anticipate ongoing success in converting a number of these opportunities as they are awarded.”

THE BOURSE WHISPERER: Twenty years ago Geoffrey Stokes came up with the idea of holding a mining conference in the iconic mining town of Kalgoorlie.

A delegation of 150 mining-minded types attended the first conference in 1992, which has evolved into one of the mining industry’s mandatory calendar event hosting crowd numbers reaching well above 2000 for the three-day and three-night event.

The candles on the Diggers and Dealers birthday cake may be set alight in Kalgoorlie for the last time this August however, with news the city’s Goldfield’s Arts Centre may be closing, forcing the conference to find a new venue.

 

The Goldfields Arts Centre is currently administered by Curtin University, which no longer views the Arts Centre to be part of its core business of education and training.

Curtin has apparently been in negotiations with the City of Kalgoorlie-Boulder for a number of years for the city to take over the management of the Arts Centre.

“The week before last, we received a letter from Curtin saying they have been unable to reach agreement with the City of Kalgoorlie-Boulder,” John Langford director of Palace Securities, the company that owns Diggers and Dealers told The Roadhouse.

The City of Kalgoorlie-Boulder has put a condition on taking over the management of the Arts Centre requiring funding of around $17 million.

The Roadhouse understands around $9 million dollars of that is required to upgrade the Arts Centre, with another $7 million to cover ongoing operating costs.

“Curtin has advised the City of Kalgoorlie-Boulder that if they don’t reach agreement by 30 April they will announce that the Arts Centre will close effective from 31 August, so they will keep it open until the last day of Diggers and Dealers this year,” Langford explained.

Apparently the City of Kalgoorlie-Boulder applied for funding through the Western Australia state government’s Royalties for Regions scheme but had its request knocked back.

The City said the refusal of the state government funding means it can no longer afford to operate the Goldfields Arts Centre.

One glimmer of hope emerged when WA Premier Colin Barnett was ambushed by journalists saying he was unaware of the request for extra funding.

Barnett said his government provided support for conference centres around WA and would look at any funding request to keep the Goldfield Arts Centre open.

“Diggers and Dealers is very much identified with being in Kalgoorlie, the heart of the gold mining and nickel district, and I guess the historic and iconic start of the mining industry in Western Australia, so that’s where it needs to be,” he told journalists.

Barnett told the ABC he didn’t know all the details but he is of the opinion Diggers and Dealers needed to remain in Kalgoorlie.

“Diggers and Dealers will not work in Perth.” he said.

Curtin University will relinquish its role as manager of the Arts Centre when the current contract expires at the end of the year.

According to the university the centre will close if new management isn’t confirmed by the end of May.

“We have written to the City of Kalgoorlie-Boulder saying that we have to have certainty on a venue,” Langford said.

“Logistically we need to know before Diggers and Dealers [this year] because people start to book their accommodation for the year ahead.

“We have told Council that we need some certainty by 31 May.”

The location of Kalgoorlie as host city for the Diggers and Dealers is part of the character of the event and is a major reason many delegates return each year.

Having to relocate such a well-established event would no doubt have some effect on its success.

“It would become more like all the other conferences and certainly loose its uniqueness,” BC Iron managing director Mike Young told The Roadhouse.

“I would like to see it stay in Kalgoorlie.
 
“There is no doubt that the local economy receives a boost during the week and with all the talk of mining not supporting the regions, which is untrue, this adds fuel to that argument as well.”

Young’s sentiments were echoed by Atlas Iron chairman and product of the Kalgoorlie School of Mines David Flanagan.

“It would be a shame if Diggers and Dealers would have to leave Kalgoorlie as I feel there is a close connection between the conference and the local community,” Flanagan said.

Langford said the preference of the conference organisers is very much to stay in Kalgoorlie as the conference works well in Kalgoorlie, and is a major event on the city’s calendar.

“We need the facilities in the Arts Centre,” he continued.

“In Kalgoorlie there is nowhere else for us to go. If we can’t get that certainty [from the Council] then we will need to find a location for Diggers and Dealers.

“We’re not taking that decision lightly. We’re not offering any threats. Either we do have a venue or we don’t.”

Langford stressed that the conference organisers had no qualms with the decision taken by Curtin University as they understand running the Arts Centre is not part of its core business.

“To be honest with you, it is a decision for the City of Kalgoorlie-Boulder. Whether they want to have an Arts Centre.,” Langford said.

“We’re a willing tenant there for a week but we certainly aren’t in a position to offer comment with respect to whether Kalgoorlie can have a viable Arts Centre for the rest of the year.”

Langford said the most common question conference organisers have been asked over the last 20 years by journalists has been, ‘is it true that Diggers and Dealers is looking at moving away from Kalgoorlie?’

He said that until the last week that has never been a point of discussion at Diggers and Dealers.

Now it looks like it could become a reality.

THE BOURSE WHISPERER: Focus Minerals produced 47,489 ounces of gold for the March 2012 Quarter, representing a 28 per cent increase on the company’s production from the December 2011 Quarter of 37,098 ounces.

The company put the growth spurt down to an improved performance from its recently acquired Laverton operations and ongoing, consistent output from its Coolgardie mines.

“We are delivering strong production growth,” Focus Minerals chief executive officer Campbell Baird said in the company’s announcement to the Australian Securities Exchange.

“On a quarterly production basis we are among the top tier of Australian gold producers.”

The break down from the company’s two operations had Laverton delivering 25,636 ounces of gold from its tenth ore processing campaign at the Barrick Granny Smith mill, which ran for 50 days.

“We completed Campaign 10 with over 150,000 tonnes already stockpiled on the ROM pad at a grade of 1.8 grams per tonne in preparation for the next Campaign in the June Quarter,” Baird said.

Production from the Coolgardie mines was 21,853 ounces of gold, keeping in line with company forecasts, and with the preceding Quarter.

“We are on track to deliver consistent, stable production at Laverton and Coolgardie with operational efficiencies that will enable us to achieve margin expansion at a time of strong gold prices,” Baird said.

“At Laverton we have developed three new sources of ore including the Apollo pits and are focused on delivering a structured turnaround.

“The improvement in performance has resulted from a combination of the number of open pits in operation giving us blended ore sources to maintain recovery and throughput.

 “At our Coolgardie operations we have also demonstrated our ability to develop and commission new mines, having established two new mines there in the first half of FY 2012 to grow production.”

Focus said it was targeting the consistency it achieved in March production for the June Quarter at both Laverton and Coolgardie.

The next Laverton processing campaign at Barrick Granny Smith is scheduled to be 41 days but with mining from higher grade ore zones to sustain stable production.

THE BOURSE WHISPERER: IMX Resources has struck a Life Of Mine sales contract with Vingo Resources for 50 per cent of all ore produced from the Cairn Hill mining operation located 55 kilometres south-east of Coober Pedy in South Australia, close to the Darwin – Adelaide railway.

The Cairn Hill mining operation operates under a Joint Venture between IMX Resources (51 per cent) and Taifeng Yuangchuang International Development Co. Ltd. (49 per cent).

Cairn Hill produces 1.7 million tonnes per annum of magnetite-copper direct shipping ore (DSO).

The sales contract between IMX and Vingo is based on industry standard iron ore and copper pricing benchmarks and has commercial terms comparable to the Taifeng LOM contract.

IMX also confirmed it is in advanced negotiations with a number of other end-user customers to finalise LOM sales contracts for the remaining Cairn Hill DSO product, at similar terms.

IMX said the Joint Venture partners have agreed on a revised Work Plan for the Cairn Hill mining operations.

This new Work Plan was implemented at the end of March resulting in the mining contractor demobilising surplus labour and equipment.

The new Plan is targeting cash operating costs of $80 per tonne Free On Board (FOB), which IMX said it expected would be achieved in the current quarter.

 “The Life of Mine sales contract with Vingo will remove much of the uncertainty associated with the Taifeng LOM Contract which has weighed heavily on market sentiment toward IMX over the past six months,” IMX managing director Neil Meadows said in the company’s announcement to the Australian Securities Exchange.

“We have achieved pricing similar to the Taifeng LOM Contract and with the implementation of the revised work plan we expect Cairn Hill to generate EBIT of $40 to 45 Million per year going forward.
“IMX’s share of this will underpin our ambitious growth strategy aimed at delivering value to our shareholders.”