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Perenti drops two Burkina Faso contracts after ambush
  • Perenti Global has dropped two contracts in Burkina Faso, following an ambush of a convoy with workers at the Boungou gold mine
  • Due to the heightened security risk in the region following the attack, AMS has issued a notice of "force majeure" in relation to the Boungou project
  • Perenti has had discussions with security consultants and government agencies and has chosen to exit the AMS Bissa contract in northern Burkina Faso
  • In lighter news, the company has also secured $165 million in new and extended contracts
  • On market close, Perenti is up slightly and is selling shares for $1.96

Perenti Global has dropped two contracts in Burkina Faso, following an ambush of a convoy with workers at the Boungou gold mine.

Last month a deadly ambush killed at least 37 people and wounded 60 others in Bukina Faso, West Africa.

A convoy of five buses were being escorted by military police roughly 40 kilometres from the Boungou gold mine when it came under attack.

The incident involved Perenti employees from its mining workforce, African Mining Services (AMS).

Boungou is owned by a Canadian company, SEMAFO.

Perenti says it continues to do everything possible to ensure that all injured employees, work colleagues and impacted families are receiving the best possible care and support.

However, due to the heightened security risk in the region following the attack, AMS has issued a notice of "force majeure" in relation to the Boungou project.

"AMS is in discussions with SEMAFO regarding the force majeure event and will work with SEMAFO to ensure an orderly termination of the contract should the force majeure circumstances continue," the company said.

Perenti has had discussions with security consultants and government agencies and has chosen to exit the AMS Bissa contract in northern Burkina Faso. The Bissa contract was due for renewal on December 31, 2019.

The company has three further Burkina Faso contracts, Sanbrado, Siou and Yaramoko, all located in central Burkina Faso, which is considered to be a lower risk region than where Boungou and Bissa are located.

"Perenti will continue to operate these sites while closely monitoring the ongoing security situation and has precautionary controls in place commensurate with the stated threat assessment," the company added.

Managing Director Mark Norwell said the attack near Boungou was unprecedented and has prompted the company to re-assess where and how it is prepared to operate.

"We have decided to take steps to move towards ceasing operations in Burkina Faso’s higher risk locations given the current security situation. We believe it is necessary to act swiftly and decisively in the wake of the attack earlier this month,” he said.

In lighter news, the company has also secured $165 million in new and extended contracts.

Mark said the additional work demonstrated Perenti’s success in converting pipeline opportunities and extending existing relationships with customers.

"This work is across a range of commodities and geographies for both new and existing clients, reflecting our diverse capabilities and our focus on delivering value and certainty to our customers," Mark said.

"It adds to the positive progress being achieved under the leadership of recently appointed Surface CEO Scott Winter, including improvements to our African surface mining business, AMS," he added.

Perenti's surface mining business in Australia, Ausdrill, has secured $79 million in contracts across three projects.

Two of the contracts are in Queensland which includes a three-year contract for drill and blast operations at the Middlemount Mine and a four-year contract for exploration drilling for a major coal operator in the Bowen Basin.

The third contract is located in the Pilbara, Western Australia for drill and blast operations at the Eliwana Project. This contract is for six months.

AMS also continues to target a strong pipeline of surface mining across Africa. Recent developments includes a $235 million contract with West African Resources.

"We have secured this work by strengthening our relationship with customers and demonstrating our leading expertise in surface mining services built over many
decades in Australia and Africa," CEO Scott Winter said.

"We look forward to delivering on this work in addition to our existing suite of projects," he added.

On market close, Perenti is up slightly and is selling shares for $1.96.


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