ASX-listed diversified mining services company Perenti has reported that its wholly-owned African Mining Services (AMS) surface mining business has issued a notice of “force majeure” in relation to the Boungou project.

This follows the tragic security incident that occurred close to Canadian-based miner SEMAFO’s Boungou mine site in Burkina Faso on 6 November 2019; and SEMAFO’s suspension of operations at the mine.

Perenti advises that AMS has finished demobilising its workforce from the Boungou mine via helicopter. “Perenti continues to do everything possible to ensure that all injured employees, work colleagues and impacted families are receiving the best possible care and support,” the company said in a statement.

Given the heightened security risk in the region following the recent attack on the Boungou convoy, AMS has issued a notice of “force majeure” in relation to the Boungou project; and is in discussions with SEMAFO regarding the force majeure event. AMS will work with SEMAFO to ensure an orderly termination of the contract should the force majeure circumstances continue.

Further, Perenti  states that it has, after consultation with, and after consideration of advice received from external security consultants and government agencies, assessed the security landscape of Burkina Faso more broadly and taken the decision to exit the AMS Bissa contract in northern Burkina Faso.

The Bissa contract was due for renewal at 31 December 2019, however, AMS has, in accordance with its rights under the contract, notified its client, Nordgold, that it will exit by 14 December 2019. AMS is currently working through a plan to exit and assist Nordgold with the transition.

Perenti notes that the combined NPAT contribution from Bissa and Boungou continued operations is not material to the company’s FY20 underlying NPAT guidance. The company has three additional contracts in Burkina Faso – Sanbrado, Siou and Yaramoko – all located in central Burkina Faso, which is considered to be a lower risk region compared with Boungou and Bissa operations.

Perenti states that it will continue to operate these sites while closely monitoring the ongoing security situation and has precautionary controls in place commensurate with the stated threat assessment.

“AMS will work with Nordgold (and with SEMAFO in the event the Boungou contract is terminated) to give them the opportunity to buy or hire property, plant and equipment (PPE), including inventory deployed at these projects. The total written down value of PPE across the two sites is circa $85 million.

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