Image: Moose River: Performance-based contract enables project financing and drives superior shareholder value

Minerals & Metals3 min read

Moose River: Performance-based contract enables project financing and drives superior shareholder value

Nova Scotia, Canada
Atlantic Gold Corporation (now St Barbara)
May 2016 – October 2017

With a deep understanding of the project from earlier feasibility study work and a strong client relationship, Ausenco undertook the Moose River Consolidated Gold project as a fixed-price lump sum turnkey EPC contract in order to maximise shareholder value and manage risk for Atlantic Gold. Focused on fit-for-purpose design and a highly efficient execution approach and team, we delivered the 2 Mt/y gold processing plant within 16 months of mobilization.

The Challenge

The Moose River Gold Mine is located 110km northeast of Halifax, Nova Scotia in a region known for its Maritime Temperate climate. With this location experiencing significant freeze/thaw cycles and high winds in winter, Atlantic Gold needed an experienced partner with proven cold-weather construction capability to design and build a gold processing plant that would optimize capital, enable a value maximising financing plan, and execute on an aggressive timeline.

The Better Way

With extensive experience delivering cost-effective plants under lump sum EPC contracts, our team focused on finding a better way to create value for the Moose River project.

By optimizing the site, plant layout, and footprint we were able to significantly reduce earthworks, overall footprint, and bulk quantities (concrete, steel, piping, cabling) – not only saving capital and operating costs but reducing the project’s impact on the surrounding environment. Our flowsheet optimization saw the removal of pre-leach thickener, and design of a fit-for-purpose semi-mobile 3-stage crushing plant. Innovation was critical to our success.

To address demanding project timelines and minimize engineering costs, we made extensive use of modular and off-site prefabricated packages for the crushing plant, elution circuit, effluent treatment plant and CIL tanks. Overall site hours were reduced, and hazardous risk activities were often completely eliminated.

An experienced team focused on the client’s objectives allowed for quick and efficient decision-making, and firm cost structures. Procurement decisions were driven largely by timing, with the choice of suppliers influenced significantly by schedule. Delivery of major components was mapped out early, to avoid the challenges of winter weather. The majority of subcontractors engaged on the project were locally based with experience in maritime conditions, and the Ausenco team lived in the local community, becoming fully intrenched and invested in the legacy of the project long after leaving the site.

The Outcome

The Moose River project demonstrates Ausenco’s ability to create value through value optimization strategies and innovative design. Our ability to offer price, schedule and performance certainty through a fixed-price, lump sum turnkey contract helped manage execution risk for our client and allowed the development of a financing plan to maximise shareholder value.

Working closely with local contractors experienced in maritime conditions, the Moose River Project was completed in just 16 months with less than 300,000 person-hours. Mining of the open pit commenced in 2017, with commercial production beginning in 2018, exceeding nameplate capacity and production guidance in its first year. In 2020, Moose River produced ~107,000 oz at an industry leading all-in sustaining cost of US$715/oz gold.

By uniting everyone behind our goal of Zero Harm, we also achieved a total reportable incident frequency rate 1/25th of Nova Scotia’s industry average.