NWH Current Projects

I just took a look at the GCY Operational updated Ann, it seems NWH will be expected to do quite a bit more work at Gilbeys going forward to meet production requirements. The question is whether these changes (variations to contract I assume?) will be recoverable, given GCY is only going to start paying NWH in Jan 2020. I suppose on the flip side the value of the contract could be larger?

Thoughts?

https://hotcopper.com.au/threads/ann-operational-and-corporate-update.4688135/

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Mining production rates since the December 2018 quarter and January 2019 operational update (ASX announcementdated 31 January 2019) have been constrained by both drill and blast capacity and ore mining capacity. 2.9M bankcubic metres (BCMs) were mined in January and February (1.5M BCMs and 1.4M BCMs respectively) compared to thelife of mine plan (LOMP) targeted monthly production rates of ~1.8M BCMs per month. The December 2018 LOMPbudgeted ~1.8 MBCM per month from January to May 2019 reducing to ~1.5M BCM per month for the remainder ofCY2019.

To address the factors giving rise to the below plan mining productivity two additional blast hole rigs with personnelto operate at least eight drill rig shifts per day, a second explosives loading unit and associated personnel to load upto 30 tonnes of explosives per day are now on site and operational. This provides additional blasting capacity toaccelerate the availability and build-up of broken ore stocks. This step change in drill and blast capacity has beenrequired due to the rapid reduction in the proportion of free-dig material.

The Company continues to work closely with mining contractor NRW through the mine planning process to ensurethat resourcing requirements are communicated well in advance to allow for deployment of the required resourcesto enable scheduled movements to be met.

Poor blasting outcomes from near surface hardcap material in the Gilbeys northern cutback has also impactedproductivity, however improvements to blasting practices have more recently seen this issue largely resolved.

As previously foreshadowed, an additional 100 tonne excavator was mobilised to site in late February to provideadditional ore mining capacity and to assist with reducing dilution on narrow ore lodes presenting in the Gilbeyseastern cutback and northern end of the pit over the remainder of the calendar year. Three additional Cat 777s aredue on site early in the next quarter.

An increase of approximately 20% in mining material movements to those achieved in the quarter to date are requiredto meet the life of mine (LOM) scheduled movements over the next two quarters. The site management team andNRW are focused on rapidly improving material movements through a range of measures already underway. Theseinclude implementation of Deswik, a more sophisticated mine planning system, employment of additional planningand drill and blast engineers, a significant lift in reporting by and collaboration with mining contractor NRW, and asdescribed, additional equipment and manpower.

An increase of approximately 20% in mining material movements to those achieved in the quarter to date are required to meet the life of mine (LOM) scheduled movements over the next two quarters. The site management team and NRW are focused on rapidly improving material movements through a range of measures already underway. These include implementation of Deswik, a more sophisticated mine planning system, employment of additional planning and drill and blast engineers, a significant lift in reporting by and collaboration with mining contractor NRW, and as described, additional equipment and manpower.

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