ASX-listed gold developer West African Resources has appointed Ausdrill’s wholly owned subsidiary African Mining Services (AMS) as the preferred tenderer for the openpit mining contract for the Sanbrado gold project in Burkina Faso.

The contract amount will be $170-million over five years.

West African and Ausdrill will enter into an option for a deferred payment arrangement for up to $10-million at a commercial interest rate.

Mobilisation activities are expected to begin in November, ahead of the start of openpit mining in January 2020.

The scope of work includes site preparation, drill and blast, load and haul and maintenance works.

Construction of Sanbrado is progressing on time and on budget, with first gold expected by mid-2020.

“The openpit mining contract is the final major operational contract for our high-grade Sanbrado gold project and the appointment of AMS as preferred tenderer follows the completion of a competitive tender and due diligence process examining safety, experience and operational capabilities,” West African MD Richard Hyde said in a statement issued on Tuesday.

“We are very pleased to appoint AMS as the preferred tenderer for the openpit mining contract as they have a strong track record in the region with over nine years of operating experience in Burkina Faso and 30 years’ experience in West Africa,” he added.

“A key focus for the new Ausdrill group has been to enhance our surface operations in Africa and target substantial growth opportunities across a range of commodities in select African countries,” noted Ausdrill Group MD Mark Norwell.

“Being selected as preferred contractor at the Sanbrado gold project is a significant achievement and represents the excellent progress we are making in building on the suite of quality projects on which AMS operates in the region,” he added.

West African and AMS are in the process of finalising the contract terms to enable formal execution, with works expected to begin in early calendar year 2020.