GR Engineering Services Limited (ASX:GNG) (GR Engineering or Company) is pleased to announce that it has entered into an engineering, procurement and construction (EPC) contract (Contract) with GNT Resources Pty Ltd, a wholly owned subsidiary of Gascoyne Resources Limited (ASX:GCY) (Gascoyne) in relation to the design and construction of the Dalgaranga Gold Project (Project) mineral processing facilities.
Under the Contract, GR Engineering will progress the design and construction of a new 2.5Mtpa mineral processing plant and associated infrastructure for the Project, located in the Murchison gold mining region of Western Australia. The Contract follows the entry into a letter of intent by the parties which was announced on 20 March 2017 pursuant to which GR Engineering has progressed front end engineering design (FEED) and early initiation activities.
The Contract has been entered into on a guaranteed maximum price (GMP) basis, with a contract sum of approximately $66.5 million. GR Engineering will initially continue engineering design and procurement activities until such time as site access is granted by Gascoyne.
Work under the Contract will commence immediately, with the Project expected to commence ore commissioning in the second quarter of calendar year 2018.
Commenting on the entry into the Contract, GR Engineering's Managing Director, Geoff Jones, said:
"We are glad to have progressed the March 2017 letter of intent by entering into the Contract and commencing the full scope of work to bring the Dalgaranga Gold Project into production. GR Engineering looks forward to delivering safe and successful project outcomes for Gascoyne."