GR Engineering (ASX:GNG) has secured an engineering, procurement and construction (EPC) contract with Vault Minerals’ (ASX:VAU) subsidiary Greenstone Resources for the King of the Hills Operation in Western Australia.
The contract, which is valued at $155 million, involves the stage two upgrade of the King of the Hills (KOTH) Operation and will fit in with the stage one upgrade which is currently underway.
GR Engineering, which has a market capitalization of $468.6 million, says the project scope comprises the design, procurement, construction, installation and commissioning of the upgrade to the KOTH processing plant. The company intends to begin work immediately.
The stage two upgrade will increase the annual throughput of the wet processing plant to 7.5 million tonnes per year.
Managing Director Tony Patrizi says the company sees this award as an endorsement of GR Engineering’s performance in delivering work that has been completed to date.
“We look forward to continuing to work with the Vault team on the successful and safe delivery of this project,” Patrizi says.
Vault Minerals’ Leonora Operations comprises the KOTH open pit and underground mines, as well as the Darlot satellite underground mine and the KOTH processing facility.
Construction of the KOTH open pit and process plant began in October 2020, with the first gold poured in June 2022.
In FY24, the Leonora operations delivered 212,000 ounces in gold sales at an all-in sustaining cost of $2,043 per ounce.
Purchases of gold are high due to some countries wanting to move reserves away from US dollar-based assets such as US equities and bonds. Economic and geopolitical uncertainty typically lift gold reserves.
Uncertainty relating to global trade actions and foreign policy, combined with ongoing conflict and the imposition of sanctions against Russia, have bolstered the demand for gold to be held in reserves. Investment demand (gold-backed exchange traded funds (ETFs) or bar/coin holdings) grew year-on-year to 2024 by 25% after low investment activity in gold in 2023.
Investment demand is poised to remain strong over the outlook period, forecast at around current levels. In 2024, ETFs saw consistent outflows as profits were taken. It is expected that H1 2025 will see continued outflows, but positive inflows will resume after 2026. Current investment is being driven by holding gold as a ‘safe haven’ or defensive asset against uncertainty. As US policy changes are implemented, gold demand by investors should start to ease, according to the Department of Industry, Science and Resources.
GR Engineering is a consulting and contracting company that specialises in providing engineering design and construction services to the mining and mineral processing industries.
Write to Aaliyah Rogan at Mining.com.au
Images: Vault Minerals
