Beadell Resources appoints new contractor at Tucano gold mine, reshuffles board

Beadell Resources ASX BDR managing director CEO chairman Tucano contractor
Beadell Resources has secured a new contract for its Tucano gold mine in Brazil, which is expected to save the company US$100 million over the life-of-mine.

As part of its strategy to pursue a primary Canadian listing, Beadell Resources (ASX: BDR) has implemented several changes resulting in a forecast US$100 million saving in life-of-mine costs at its Tucano operation in Brazil and a new managing director.

Beadell secured a life-of-mine contract with U&M Mineracao e Construcao, which Beadell claims will reduce costs at Tucano by US$100 million.

The savings were achieved by paying U&M on a volume basis contact, which will enable better cost predictability and a more simplified contract compared to the previous contractor.

“We are pleased to have reach an agreement with U&M that we believe will materially improve the financial performance of the Tucano gold mine,” Beadell’s newly appointed managing director and chief executive officer Dr Nicole Adshead-Bell said.

“U&M’s Brazilian open pit mining expertise, combined with its sizeable fleet, means that U&M is uniquely positioned to help us move Tucano towards generating free cash flow and resolving the key issue of material movement in live with our life-of-mine plan.”

Dr Adshead-Bell added the company would now focus on exploration including in-mine and near-mine discoveries where a resource is yet to be calculated.

“I am excited by the resource expansion potential of our geologically impressive, large and wholly-owned land position and look forward to being able to upgrade growth initiatives to a core corporation goal,” she said.

Boardroom shuffle

Dr Adshead-Bell has been a non-executive director on Beadell’s board since September 2016. She has more than 20 years’ experience in minerals and capital markets and has replaced outgoing chief executive officer and managing director Simon Jackson.

Additionally, chief operating officer Peter Holmes has also stepped down from the board, and has not been replaced, while Luis Diaz has taken on the country manager role with the company.

Beadell’s strategy is to become a North American gold producer and current US-based director Brant Hinze has agreed to become the company’s chairman.

Mr Hinze replaces Craig Readhead who will remain with the board as a non-executive director.

“I welcome Nicole stepping up into the role of chief executive officer and managing director of Beadell and I am fully committed to supporting the company as we execute on the operational turnaround of Tucano,” Mr Hinze said.

Tucano gold mine

Beadell has been implementing a cost reduction strategy at Tucano, which has “underperformed” due to several reasons including the inability to mine waste and ore tonnes at the forecast rate.

Tucano lies within Beadell’s 2,500 square kilometre tenement package in Brazil’s Amapa State.

According to Beadell, the tenements are “highly prospective” and “under explored”.

Tucana has open pit reserves of 18.5 million tonnes grading 1.77 grams per tonne gold for 1.1 million ounces.

The mine is expected to produce up to 170,000oz per annum.

Investors reacted positively to today’s news, with Beadell’s share price soaring almost 8% to reach A$0.055 by mid-afternoon trade.

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