It is not that long ago that the by lindahy


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									GRD MINPROC

What a difference
a boom makes
The mining boom has allayed any fears GRD Minproc’s
management might have had about keeping busy.
By Tim Treadgold
                                                                                                      GRD Minproc chief executive Brettney Fogarty:“We
                                                                                                    have continued to invest in our people, thus creating a
                                                                                                    resilient company and a strong foundation for growth”.

     t is not that long ago that the                   GRD Minproc’s chief executive Brettney       • Securing preferred contractor status for
     management team at GRD Minproc                    Fogarty.                                        the sulphide expansion project of
     was wondering, like everyone else in                GRD Minproc is now engaged on some            Bogoso Gold Mines in Ghana; and
the resources industry, whether there                  of the biggest resource projects in the      • Additional contracts at the recently
would ever be a recovery, and whether                  world, including:                               completed Telfer goldmine in WA for
anyone would ever develop a new mine.                  • BHP Billiton’s world-class Ravensthorpe       Newcrest Mining.
Oh what a difference a boom makes.                       laterite nickel mine in Western               “Our high quality client base, as much
Today, the “pipeline” of projects under                  Australia;                                 as the workbook of projects, underlines the
study at Australia’s leading mineral                   • Completion of a detailed feasibility       strength of our business,” Fogarty said.
processing     and      waste-to-resources               study into the Niquel do Vermelho             “Our view is we are only three years
engineering firm, has stretched out to $6                project in Brazil for Companhia Vale do    into a 15-year uptrend, which will result in
billion — and it’s still growing.                        Rio Doce (CVRD);                           increased demand for our technical skills.”
    Suddenly, as if a light bulb had been              • Final delivery of the UR-3R waste-to-         Those engineering, design and
flicked on in a dark room, everyone                      resources      project     for    Global   management skills are spread across the
wants a new mine, a feasibility analysis,                Renewables at Eastern Creek near           three divisions that make up the greater
or a technical study. High commodity                     Sydney;                                    GRD group. The best known of those to
prices, driven largely be China’s                      • Final delivery of First Quantum            the mining world is GRD Minproc, a
seemingly insatiable appetite for raw                    Mineral’s Kansanshi copper project in      business with roots that trace back to the
materials, has triggered enormous                        Zambia;                                    1980s when Minproc Engineers won
demand for technical skills.                           • Being      awarded      the    front-end   worldwide recognition for its leading role
    “We have continued to invest in our                  engineering development contract for       in the revival of gold mining, especially in
people, thus creating a resilient company                the Lumwana copper project of              the field of low-cost processing.
and a strong foundation for growth,” said                Equinox Minerals in Zambia;                   Since those early days, the Minproc
                                                                                                    business has become part of GRD and
                                                                                                    dramatically expanded its capabilities in
                                                                                                    mineral process design and construction. It
                                                                                                    is, for example, widely recognised as the
                                                                                                    leader in laterite nickel processing, as well
                                                                                                    as retaining its reputation as a specialist in
                                                                                                    the treatment of gold and copper ores.
                                                                                                       Alongside GRD Minproc in the GRD
                                                                                                    group are two other key divisions — the
                                                                                                    57%-owned Oceana Gold, which is best-
                                                                                                    known as the operator of the Macraes and
                                                                                                    Reefton gold mines in New Zealand; and
                                                                                                    Global Renewables, a business owned
                                                                                                    jointly with Hastings Funds Management, a
                                                                                                    division of Westpac Banking Corporation.
                                                                                                       “Essentially, we have two core
                                                                                                    operations within GRD,” Fogarty said.
                                                                                                       “There is the development arm, which
                                                                                                    includes OceanaGold and Global
                                                                                                    Renewables, and there is the engineering
                                                                                                    contracting business of GRD Minproc.
                                                                                                       “GRD is a resource contracting and
                                                                                                    development company with a skill set
                                                                                                    that adds value to what we do and which
                                                                                                    is available to our resources clients
            Turning rubbish to resources, GRD’s Eastern Creek facility for Global Renewables.       through GRD Minproc.”
80                                                                                                                                         RS july 2005
                        GRD Minproc sticking close to its mining roots with its Kansanshi Copper Project works for First Quantum Minerals.

   Since it was established, GRD Minproc             construction of projects such as First                          Fogarty said rapid growth across all
has been involved in more than 300                   Quantum’s Kansanshi copper project in                        divisions at GRD over the past year had
feasibility studies and 200 major design             Zambia and last year we expanded the                         set a pattern that was likely to be
and construction projects in 33 countries.           office for GRD Minproc in South Africa.                      repeated into the foreseeable future.
The client list includes world leaders                  “Today, we have a fully operational                          “We have taken the first steps in
such as BHP Billiton, De Beers                       engineering and project management                           creating a truly global business at GRD,
Consolidated Mines, Anglo American,                  office in South Africa employing more                        which is being led by GRD Minproc,”
CVRD and Gold Fields.                                than 120 staff. We can see similar                           he said.
   Last year, as the first flush of boom-            opportunities for growth in South America                       “We have a substantial pipeline of
linked resource projects started to flow,            where we are working with a number of                        mineral and waste-to-resources work, and
GRD Minproc generated a pre-tax profit of            world-class clients, including Brazil’s                      can see tremendous opportunities that
$9.6 million, a 185% increase on its 2003            biggest resource company, CVRD.”                             will provide us with the potential to take
result. Continued improvement in                        The structure of GRD means it is                          a quantum step forward.”               RS

performance is confidently expected as               becoming much more than a resources
resources companies convert studies into             company, partly because the engineering
firm construction contracts.                         and other technical skills developed with                                                 grd minproc
   “One measure of how we perform as a               GRD Minproc are easily transferable to                                                  ... at a glance
business is our project conversion rate,”            other areas.

                                                                                                                                                              Source: Patersons Securities Limited
said Fogarty.                                           Global Renewables is an example of
   “GRD Minproc has a history of                     this skills transfer, with GRD Minproc
converting around 70% of our studies to              handling the design and construction of
projects within two to three years.                  the UR-3R waste-to-resources project at
   “To paint a picture of how we’ve grown            Eastern Creek in Sydney. The plant is a
as our client base has expanded, consider            world-first that has attracted international
these numbers. At the end of 2003 the                attention and led to invitations to
GRD Minproc project pipeline stood at                undertake a similar project in Melbourne.
$500 million. By the end of 2004 it was              It also put Global Renewables on the final
$1.3 billion. In addition, the capital value         tender list for the Lancashire County                                                    HEAD OFFICE
of mineral and waste-to-resource projects            Council in Britain. On top of that, the                                           Level 35, Exchange Plaza
under study        today is $6 billion. A            business is exploring waste-to-resources                                                   2 The Esplanade
remarkable growth rate, and a measure of             opportunities around Australia, as well as                                                 Perth,WA 6000
how GRD itself is making a transition from           in Asia and Europe.                                                                  Ph: +61 8 9278 1888
a resources company to one which might                  OceanaGold is another example of                                                 Fax: +61 8 9278 1880
be more easily considered an industrial.”            applying GRD Minproc’s engineering skills                                          Email:
   A breakdown of the work being                     to the requirements of a resources                                                  Web:
undertaken by GRD Minproc at the end of              business. OceanaGold, which previously
2004 gave an indication of the rapid                 traded under the name of Macraes                                                        DIRECTORS
build-up of work. Within the business, the           Mining, is the biggest gold miner in New                              Brettney Fogarty, Richard Court,
Technical & Development Solutions team               Zealand with a resource base totalling 6.1                     Steven Dean, Bruce Thomas, John White
had 40 active studies underway, including            million ounces.
                                                                                                                            MARKET CAPITALISATION
13 definitive feasibility studies, with 65%             Last year OceanaGold exceeded
                                                                                                                               $390 million (at press time)
of the work involving studies in countries           forecasts made in its prospectus when it
other than Australia.                                produced 184,541 oz of gold and delivered                              MAJOR SHAREHOLDERS
   “It’s figures like those that emphasise           a profit of $19.6 million. The main                                         Quininup Holdings 28.5%
the way in which GRD is becoming a truly             development projects at Oceana are the                                        Zero Nominees 9.79%
global business,” Fogarty said.                      Frasers underground mine within the                               Westpac Custodian Nominees 9.28%
   “As an example, in recent years, we’ve            Macraes goldfield, and the Globe Progress                                  Citicorp Nominees 5.17%
taken a big step into Africa through the             opencut mine within the Reefton goldfield.
82                                                                                                                                                   RS july 2005

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