Mining services company Perenti has been awarded a A$630m ($418.2m) contract by gold mining company Newmont at the Subika underground gold mine in Ghana.

The contract has been secured through UMA, a 70-30 joint venture (JV) between Perenti’s subsidiary African Underground Mining Services and Ghanaian civil and mining contractor Rocksure International.

Under the terms of the contract, the JV will manage all underground development and production activities, diamond drilling and associated support services at the Subika underground mine.

The contract, which is awarded for a period of 60 months, is effective from 1 January 2023.

Perenti managing director and CEO Mark Norwell said: “With this new contract, Perenti not only expands its tenure in Ghana but furthers its relationship with Newmont, the world’s leading gold company with a world-class portfolio of assets in favourable mining jurisdictions.

“We are very pleased that we will continue to deliver value and certainly to Newmont and our other stakeholders in Ghana and beyond.”

Through the new contract, Newmont will acquire the current fleet of underground equipment associated with the gold project and will oversee the acquisition of the additional fleet needed for the project.

Perenti anticipates completing the sale of these assets before the end of FY23.

According to the company, the capital strategy will reduce the capital intensity of the gold project along with delivering strong returns.

Located about 310km to the northwest of Accra, the Subika underground gold mine commenced commercial production in November 2018.

The Subika underground operation is part of the larger Ahafo complex and is expected to add nearly 150,000-200,000 ounces to the operation annually through its 10-plus-year life.

In December last year,  Perenti secured a contract extension worth around $185m from Australian gold mining company Resolute Mining for surface mining activities at its Mako gold mine in Senegal.