Mining services company Macmahon has executed a binding agreement to buy mining contractor GBF Holdings for A$48-million, consistent with a growth plan of scaling up its underground division.

The acquisition, which was confirmed to the market earlier in June, includes all GBF subsidiaries and is subject to certain conditions precedent before settlement.

Macmahon CEO Michael Finnegan said in a statement on Tuesday that there were potential synergies to be realised through the combination of the two businesses, but stressed that growth was the key driver of the transaction.

“GBF’s brand and key personnel will be retained, with its capabilities and strong client relationships being fully integrated into Macmahon’s underground business, to maximise our ability to win new work,” he said.

GBF’s founders, Michael Foulds and Ross Graham, would continue in the business.

Meanwhile, ASX-listed Orminex said that its existing strategic alliance with GBF would continue under the company’s new ownership.

GBF oversees all operational management of the company’s projects under the mineral ventures model, which provides capital and mining service solutions to suitable near-term production gold projects.

Commenting on the agreement, Orminex executive chairperson Daryl Henthorn said that Orminex now had the potential to seek to leverage Macmahon’s extensive surface mining capabilities to open up a pipeline of new projects that Orminex could evaluate and pursue under its mineral ventures model.

Orminex currently has a 51% joint venture interest in the producing Comet Vale gold project and 100% ownership of the high-grade Penny’s Find gold mine near Kalgoorlie. The company also owns 100% of the Golden Lode project located 130 km from Coolgardie and 100% of the Happy Jack project located 30 km south of Menzies. 

Orminex also announced that Foulds would join the Orminex board as a non-executive director once the sale of GBF to Macmahon was completed. Graham would be appointed as an alternate director to Foulds.