Sedgman inks $90M EPC contract with La Mancha for Mungari gold project

THE BOURSE WHISPERER: Resource sector services company Sedgman (ASX: SDM) has scored a contract to Engineer, Procure and Construct (EPC) a new processing plant for Montreal-based La Mancha Resources’ Mungari gold project near Kalgoorlie in Western Australia.

The value of the EPC work to be completed by Sedgman is approximately $90 million from the total La Mancha project value of $110 million.

Sedgman said the award of the La Mancha contract had validated the company’s strategic diversification into the metals sector.

“We recognised some time ago the need to diversify across commodities and regions,” Sedgman managing director and CEO Nick Jukes said in the compnay’s announcement to the Australian Securities Exchange.

“Sedgman have worked closely with La Mancha to successfully deliver early phase solutions for the La Mancha project.

“The award of the EPC contract is a significant project and demonstrates our commitment to building a stronger service offering targeting metals.”

Sedgman was awarded the contract having completing a Definitive Feasibility Study (DFS) and the Front End Engineering Design (FEED) phases for the project last year.

The Mungari plant has been designed to process 1.5 million tonnes per annum blend of ore from the Frog’s Leg and White Foil mines to produce a gold doré product.

Sedgman asserted its plant design will provide the project a cost effective processing solution at the same time as maintaining high levels of reliability, operability and maintainability.

The company’s scope of work for La Mancha at Mungari will include detailed design, procurement and construction of the plant and associated infrastructure.

Construction is expected to commence in April 2013 and is scheduled for completion in early 2014.