Macmahon (ASX:MAH) has agreed to sell a substantial portion of its remaining mobile equipment fleet at the Dawson South project, which is expected to generate $44 million of net cash inflows for the mining services firm.
The Dawson South project is located in Queensland and forms part of the Dawson Mine, being an open cut steelmaking coal mine.
The mobile equipment was sold at market rates, which were at or above book value, for cash, and is expected to result in net cash inflows to be collected during FY24 and FY25.
Macmahon is currently the mining contractor at the Dawson South project with the existing contract due to end on 30 June 2024.
The parties are in negotiations on the terms of the new contract, which is expected to begin on or before 1 July 2024. Macmahon expects to retain its incumbent workforce of approximately 210 employees.
No new capital expenditure is expected over the new term due to the divestment of a large portion of the Dawson South equipment fleet, which will be utilised on the project.
Macmahon reaffirms that it expects to deliver FY24 revenue of between $1.8 billion to $1.9 billion and underlying EBIT(A) of $130 million to $140 million.
The mining services firm operates throughout Australia and Southeast Asia and has experience in both surface and underground mining.
Write to Adam Orlando at Mining.com.au
Images: Macmahon
