Beadell Resources and MACA have agreed to a mutual termination of their contract for the open pit Tucano gold mine in Brazil.
Following the termination, MACA will stop providing mining services to Beadell at the Tucano mine.
According to Beadell, mining will now be undertaken by a combination of owner mining and the existing Brazilian mining contractor on site.
The company expects to shortly execute a new life of mine contract with the Brazilian contractor, thereby transitioning the mine to a single contractor, leading to operational efficiencies and reduced mining costs.
The termination of the contract will see Beadell returning a total loan amount of A$61m.
Under the agreement, Beadell will consolidate all outstanding payments to MACA, including unpaid invoices, unbilled accruals, loans, termination costs, demobilisation and fleet purchase costs into one loan.
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The company will make an initial payment of A$3m, followed by an additional A$3m in March next year, and monthly payments of A$1.5m thereafter.
Beadell Resources CEO and managing director Simon Jackson said: “It is a significant step forward for Tucano as we continue on our cost reduction and operational efficiency turnaround plan.
“A large single Brazilian based mining contractor is the most sensible and practical way forward for the mine.”
The mining services contract with MACA was originally valid until November this year.
Despite the contract termination, MACA will continue to own the majority of the plant and equipment currently used at Tucano.