In an update on Monday morning the contractor said it had received a letter of intent from Glencore’s Cobar Management laying out details of the new work.

The two-year contract is scheduled to start in July and includes an additional one year option.

Downer CEO Grant Fenn said the award was an endorsement of the company’s underground mining expertise.

“Downer has a highly skilled and experienced hard rock underground mining team and we continue to build this part of the mining business,” he said.

“We look forward to working with Cobar Management on this important project.”

The new contract includes mechanised decline and lateral development mining and haulage along with ground support services including shotcrete and cable bolting.

It represents the latest update from the CSA Mine, with Cobar Management last week agreeing to pay Macmahon Holdings $A19 million.

The payment came after a settlement over the termination of Macmahon’s shaft sinking contract in 2013.

Moving forward, Downer said the LOI was still subject to a binding agreement.