Ausenco beat out existing consultants to win a fixed-price EPC contract to deliver a gold processing facility and other site infrastructure at the Magino mine site in Ontario. Teams from across our organization worked together to improve flowsheet design, lower CAPEX costs, and streamline the operation ahead of final financing and the start of construction.
The Challenge
The Magino gold mine is a past-producing underground mine located near the town of Dubreuilville, Ontario, about 200 km north of Sault Sainte Marie. After a prefeasibility study in 2014, a full feasibility study was completed by another vendor in 2017, demonstrating the 22 km2 property to be a valuable open-pit opportunity. To aid in their transformation into a lower-cost intermediate producer with long mine life, Argonaut Gold approached Ausenco to provide a fixed-price Engineering, Procurement and Construction (EPC) contract to deliver a 10,000 t/d gold processing facility, and other significant infrastructure on site.
The Better Way
Our depth of experience on similar projects, as well as across the region, was fundamental in our securing this assignment – delivering the schedule and cost certainty Argonaut needed with an EPC contract. Our teams from Perth, Vancouver, Burlington, Toronto and Halifax were able to coordinate their expertise seamlessly to improve the efficiency of the flowsheet, and provide our client with capital cost reductions that would help them secure the financing needed to move the project forward.
On the surface, our better way was simply the tried and true methodologies that have built our reputation – lean, fit-for-purpose design, reductions in bulk materials like concrete, piping and structural steel, and prefabrication where possible to save time and complexity at this high-snowfall, cold climate site.
However, a number of key optimizations unique to the Magino project were critical to our design. For example, while the previous vendor had proposed a USD $196 million circuit employing a single-stage crusher and SAG mill, we were able to deliver a circuit with two-stage crushing plus a SAG and ball mill for the same CAPEX costs. We were able to reduce process risk and improve leaching kinetics through the introduction of oxygen and pre-leach thickener. Careful design allowed us to reduce building sizes, even in a harsh climate that requires much of the operation to be indoors.
The Outcome
Through capital-efficient design and procurement processes, we were able to achieve significant capital cost reductions for the client. Our Supply Chain and Construction teams engaged with our key partners to provide project delivery certainty, while our HSE teams delivered stringent safety plans in accordance with Covid-19 protocols.
At the height of a global pandemic, our teams delivered a contract that reduces project risk and improves bankability through the price, schedule and performance certainty associated with a Lump Sum Turnkey Price. This model will be highly attractive to other mid-tier and emerging producers, who need to secure financing and provide their shareholders with certainty of delivery.
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