13 June 2008
The Manager
Company Announcements Office
ASX Limited
Level 4
20
Bridge Street
Sydney
NSW 2000
JOINT ASX / MEDIA
RELEASE
AUSDRILL
WINS IMPORTANT NEW CONTRACTS
POTENTIAL TRANSACTION INVOLVING
DIAMOND COMMUNICATIONS
Diversified mining and services
company Ausdrill Limited (ASX code: ASL) announced today it has been
awarded a number of valuable and important new contracts, particularly
bolstering its successful African operations.
African Mining Services
Through its wholly-owned subsidiary
African Mining Services (AMS), Ausdrill has received a letter of intent from
Yatela SA, a joint venture between AngloGold Ashanti,
IAMGOLD and the Malian Government, to award a negotiated mining contract for
the Yatela Project in Mali, West
Africa
The initial contract, which is
expected to start July 1 this year, will generate approximately US$40 million
in revenue over two and a half years.
Under a separate agreement, AMS
will purchase the previous contractor?s equipment and spares for approximately
US$19 million. AMS will also take over most of the previous contractors?
staff. AngloGold Ashanti,
one of the largest mining companies in Africa,
operates the mine.
Ausdrill Ltd Managing Director,
Mr Ron Sayers, said that the contract was particularly significant, as it was
the first contract that AMS has won in the very mature gold mining province
of Mali.
?It is also the first contract
that AMS has won with AngloGold Ashanti
since Ausdrill acquired the remaining 50% of AMS from the Administrator of
Henry Walker Eltin?, Mr Sayers said.
?We are delighted to have won the
opportunity to form a relationship with AngloGold Ashanti
in Africa. The contract signifies the
terrific opportunities for Ausdrill and its subsidiaries in Africa?.
Ausdrill has
also received a letter of intent through its 50% owned African Underground
Mining Services (AUMS), a joint venture between AMS and Barminco
Ltd, to award an initial 13-month US$11 million contract to advance the Strauss
decline approximately 2 kilometres at Central African Gold Plc?s Bibiani Mine
in Ghana. Negotiations have commenced to extend the length of this
contract.
This is the second contract awarded
to AUMS in the past six months. The initial contract was for three-years,
will generate US$62 million in revenue and was for the development of the
Akwaaba underground project at Chirano for Redback Mining where AMS has a
five-year contract for the mining of open pits. The company is also
currently tendering on an underground production contract at Akwaaba which will
commence in early 2009.
Ausdrill Mining Services
Also today, Ausdrill?s
wholly-owned subsidiary Ausdrill Mining Services Australia (AMSA), received a
letter of intent from the Fortescue Metals Group to hire ten 100-tonne
Caterpillar dump trucks for a minimum period of six months. This is a
significant milestone for AMSA as it is the first major contract it has been
awarded since acquiring its Australian contract mining fleet late last
year.. The contract complements Ausdrill?s three year drill and blast
contract with Fortescue Metals Group.
Diamond Communications
Mr Sayers also confirmed that in
addition to the letters of intent for new contracts, Ausdrill has entered into
discussions and negotiations for the possible sale of Diamond
Communications. This division of Ausdrill?s business specialises in the
telecommunications cabling field and the installation of underground power cables.
?We are in discussions with a
significant participant in that industry and if current negotiations are
successful, the sale is expected to be earnings accretive for the year ended 30
June 2009.?
?These are all extremely positive
and exciting developments for the company and demonstrate that Ausdrill
continues to be a leader in its key markets of Australia
and Africa.?
Potential Impact on Macmahon?s
Unsolicited Takeover Offer
Each of the
transactions referred to above flows from discussions and negotiations entered
into prior to the announcement of Macmahon?s unsolicited takeover offer for
Ausdrill.
Nevertheless,
each transaction has the capacity to amount to a breach of condition 5.1(e) of
Macmahon?s offer.
The Ausdrill Board is clearly of
the view that:
(a)
there are clear commercial imperatives for Ausdrill in entering into the
contracts;
(b)
the A$10 million limit imposed by Macmahon in its bid conditions is
unrealistically low given the scale of Ausdrill?s operations;
(c)
the contracts are entered into in the ordinary course of business and are not
commercially critical to Macmahon?s offer; and
(d)
in any event Macmahon?s offer is inadequate and the Board has unanimously
recommended that shareholders reject the offer
Contact:
Caroline de Mori
Purple Communications
Mobile
0418 919 064
About Ausdrill
Ausdrill
is a diversified mining and services company providing leading edge services in
mining, drill & blast, exploration, procurement & logistics,
manufacturing, telecommunications and automotive industries with operations in
Australia, the United Kingdom and Africa.
Ausdrill
has established a blue chip client list over many years, with which the company
has long term relationships.
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Issued by
Purple Communications
Level 3, 28
Kings Park Road, WEST PERTH
WA 6005
Ph: 08 9485 1254 Fax: 08 6263
0455
purple@purplecom.com.au