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Macmahon Awarded Rail Contract

Gindalbie Metals Limited (GBG – “Gindalbie”) is pleased to announce the award of another key construction contract for the Karara Iron Ore Project in Western Australia. Karara Mining Limited, the Joint Venture company, has awarded the contract for rail earthworks and track laying for the 85km spur line servicing the project to Macmahon a leading ASX-listed contracting group (MAH). The contract, with an approximate value of $86 million, is for construction of the spur line connecting Karara to Tilley Siding, near Morawa, where it connects with the existing railway line running from Morawa to Geraldton. The track itself will be supplied by Gindalbie’s Karara Project partner Ansteel, which is the biggest producer of rail in China and a world-leader in the efficient production of high-quality rail products. Established in 1963 and listed on the ASX since 1983, Macmahon is one of Australia’s leading contracting companies, with extensive experience in surface and underground mining operations and civil infrastructure construction, with projects in Australia and overseas. Macmahon, whose head office is in Perth, has a strong portfolio of blue-chip customers. Gindalbie’s Managing Director Mr Garret Dixon said Macmahon had been selected because of its strong project knowledge and extensive experience in constructing remote location iron ore railways, having undertaken work on both Rio Tinto’s and BHP Billiton’s rail lines in the Pilbara region. “Macmahon has played a leading role in the redevelopment and construction of some of the busiest rail networks throughout urban and rural Australia and was a logical choice for us,” Mr Dixon said. “We are also pleased to be working with another West Australian-based company to deliver an additional major contract at Karara.” Macmahon Managing Director and Chief Executive Officer Mr Nick Bowen said the award reinforced Macmahon’s depth of experience in rail construction and its strong presence in Western Australia’s resources market. “This is an excellent win for our Construction Business. We have delivered numerous infrastructure contracts in Western Australia’s resources sector over many years and are very pleased with the opportunity to establish a new relationship with Gindalbie and Ansteel on the world-class Karara Project,” he said. Macmahon will utilise the services of its subsidiary, MVM Rail, to carry out components of the contract. “MVM Rail will undertake tracklaying work, drawing on its specialised capabilities and expertise to deliver this contract,” Mr Bowen said. An initial stockpile of rail sleepers for the spur line has already been delivered and the rail has been procured in preparation of this contract. The rail construction contract is one of several major new construction, equipment and services contracts totalling $300 million in value to be awarded in the coming months which will see the total value of contracts awarded by the Project reach $1 billion (see ASX Announcement – 8 June 2010). Located 500km north-east of Perth and 225km east of Geraldton, Karara is a major new integrated iron ore project being developed under a 50/50 joint venture between Gindalbie and leading Chinese steel and iron ore company, Ansteel. Karara is the Mid West region’s largest resources project.