PERTH (miningweekly.com) – Contractor Sedgman’s additional costs of A$49.9-million related to the Woodlawn base metals project, in New South Wales, have been largely rejected by the contract superintendent.
Sedgman presented project owner Heron Resources with a A$49.9-million progress claim for the Woodlawn project, which was over and above the agreed upon A$109-million guaranteed maximum price engineering, procurement and construction (EPC) contract sum that formed the basis for the construction of the Woodlawn project.
Heron said on Monday that with the exception of some minor agreed contract works totalling A$223 057, the contract superintendent has rejected the progress claim, determining that the majority of the 22 variations claimed by Sedgman either had no merit, or were time barred under the EPC contract, and in some cases referred to events that predated the parties entering into the EPC contract.
Heron told shareholders that the company would now claim liquidated damages from Sedgman as a result of the later-than-planned completion of the Woodlawn processing facility.
In the meantime, the company will continue to focus on progressing the development and commissioning of the project as it works towards a production start in the first quarter of 2019.
At steady state, Woodlawn is expected to produce 70 000 t/y of zinc concentrates, 30 000 t/y of copper concentrates and 25 000 t/y of lead concentrates.