Crinum and Cook to bolster Mastermyne's outlook

THE outlook for Mastermyne looks “exceptionally strong” with the recent execution of the Crinum mine operations contract and the announcement of the Cook Colliery mine operations contract in Queensland, the company said.
Crinum and Cook to bolster Mastermyne's outlook Crinum and Cook to bolster Mastermyne's outlook Crinum and Cook to bolster Mastermyne's outlook Crinum and Cook to bolster Mastermyne's outlook Crinum and Cook to bolster Mastermyne's outlook

Mastermyne's labour and equipment resourcing strategies are well developed.

Mastermyne was awarded a seven-year mining services contract to operate Sojitz Blue's Gregory Crinum Underground mine for a value of up to $660 million.

It has also been selected by QCoal subsidiary Constellation Mining to operate its Cook colliery.

The Cook project will be restarted over two distinct phases with the first phase beginning immediately.

During the Stage 1 works Mastermyne will restart the underground operations including bringing the operation out of care-and-maintenance and transitioning back into production.

"In the coming year both the Crinum and Cook projects will be in the ramp up phase delivering revenue of about 50% of the expected long-term annual average," Mastermyne said in its annual report.

"FY2022 will see the company deliver substantial packages of work to restart the Crinum and Cook mines and the operational focus will be on executing these works on time and on budget." 

"Crinum works are progressing well against schedule and budget and these same project disciplines will be applied to the Cook Colliery restart.

"Labour and equipment resourcing strategies are well developed and to date the company is not experiencing any delays or concerns."

Mastermyne said it had well developed strategies for large scale recruiting and on boarding and was confident it could mitigate any execution risk in the mine operations projects.

"With a strong balance sheet supported by the current undrawn funding facilities, the company is adequately funded to manage the capital requirements in bringing both the Crinum and Cook projects on-line," it said.

"These projects are underpinned by the very stable contracting order book and growth pipeline in the coal and hard rock sectors.

"As a result, the company is well positioned to deliver strong earnings growth in FY2022 which will most likely be surpassed in FY2023."

The company said metallurgical coal prices had recovered substantially from US$100 per tonne in December 2020 to about $220/t.

"Australia remains one of the lowest cost coal producers in the world, providing high quality metallurgical coal into Asian steel production markets," Mastermyne said.

"The demand for Australian seaborne metallurgical coal is expected to remain robust in the medium to long term.

"Already the company is seeing scope increases on its existing projects along with an increase in tendering activity which is expected to remain supported through the cycle."

Mastermyne said stronger pricing was also evident in key metals with copper, nickel and zinc being particularly robust.

"Exposure to these and other metals will drive growth and provide stability in cashflows in future periods," it said.