'Big win' for Primero

NRW Holdings subsidiary Primero Group has been awarded the A$973 million engineering, procurement and construction contract for Northern Star Resources' $1.5 billion KCGM expansion.



Northern Star made a final investment decision on the project last month which will see processing capacity at the iconic Kalgoorlie asset rise from 13 million tonnes per annum to 27Mtpa and production rise from 489,000 ounces of gold per annum in FY22 to 900,000ozpa by FY29.

Primero will be responsible for the design, procurement, construction and commissioning of the plant facilities.

Primero participated in a competitive early contractor involvement (ECI) process from January 2022, and has worked with the Northern Star project team to develop a technically superior design that will bring operating benefits to the Fimiston plant.

Following the ECI program, Primero was engaged to undertake further value engineering and scope development.

Primero managing director Michael Gollschewski said the execution of the KCGM contract was the culmination of an 18-month journey.

"The work conducted to date to develop the capital cost, design, execution strategy and schedule for the project, has been one of the most comprehensive and rigorous ECI programs we have participated in," he said.

"The effort of the combined teams to define this key project has provided a solid foundation for a safe, efficient, and successful delivery."

The contract is scheduled for completion by the September quarter of 2026.

Argonaut analyst Ian Christie described the contract as a "huge win" for Primero.

"EPC contracting comes with risk, so the project will need to be well managed," he said.

"Primero points to the work conducted to date being amongst the most comprehensive and rigorous it has participated in.

"Risk mitigation is also evident in the collaborative ITC contract structure, which provides a degree of gain share/pain share not evident in typical lump sum work."

NRW MD Jules Pemberton said the contract reinforced Primero's reputation as a leading provider of world-class engineering and construction services.

"This project showcases Primero's full range of in-house capability," he said.

"I look forward to developing a long-term relationship with one of the industry's leading gold producers."

Despite the contract award, NRW shares fell 0.6% to $251.5, valuing the company at $1.1 billion.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.


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