Thiess awarded $100 million coal mining contract at Southland Colliery

• Development and production of longwall panels SL2 and SL3 on a guaranteed maximum cost basis, using an agreed schedule of rates per metre development advance and per tonne of run-of-mine production.
• Production of approximately three million tonnes coal over the 24 months commencing April 2001. Total outlays are forecast at $A150 million including remediation, infrastructure, development and production.
• Operating cash flows are forecast to more than support all outlays and Thiess’ contract payments have been moulded to suit the project.

Director of Gympie Gold Limited and Chief Executive Officer of Southland Coal, Mr John Leach, said: “We were pleased by the keen competition among several leading contracting companies expressing interest in becoming contract operator of Southland.  After reviewing all tenders, the commitments made by Thiess and the prospect of our long term relationship are clearly in the best interests of all stakeholders.  Thiess is committed to immediately remediating damage previously caused and to develop the Southland Colliery into a +2 million tonne per annum operation within three years”.

The agreement with Thiess also signals the parties’ intention to enter into an additional eight year operating agreement based on alliance contracting principles including a regime that ensures ongoing competitive costs.  It is intended that these arrangements will be finalised within the next two months and that joint focus will then turn to evaluating scenarios for expansion.

Mr David Saxelby, Executive general manager of Thiess' NSW/VIC operations said that Thiess' strength of experience in the coal sector will add value to the competitiveness of the Southland Colliery.

"Our business is built on long-term alliances, aimed at ensuring the best outcomes are achieved for all project stakeholders.  This agreement is a good example of this approach," said Mr Saxelby.

Gympie Gold Managing Director and Southland Coal Chairman, Mr Harry Adams, said:  “We look forward to a long term alliance with Thiess in our coal business.  While not underestimating the work ahead, we believe Southland is now on the right track with a committed operator, lower costs of production and higher coal prices.  Southland is a great coal deposit and can now achieve its full potential to supply Greta Seam coking coal for the next 30 years or more”.

With the support of all stakeholders Southland is expected to be back in production within weeks.  Thiess has this morning moved onto the site.

For Further Information Contact
Gympie Gold Limited
Mr Harry Adams, Managing Director
Telephone:  (02) 9251 2777 or 0412 369 710