“Specifically underground, the methodology is evolving in the region; an increasing demand for innovation and mechanization is changing the way mines have historically operated. We want to bring that expertise and experience into this market through Dumas.”

Steve Dixon

CEO, STRACON

April 16, 2019

Could you summarize the main developments of STRACON from last year, including the acquisition of Dumas in Canada?

The main development was the transaction completed in April 2018, whereby we disengaged from the Graña y Montero group to take STRACON forward. Then, the acquisition of Dumas is part of the strategy of diversification into the underground sector. We acquired a 60% stake from Pala Investments, while Daniel Dumas retains his 40% interest. We completed that transaction at the end of October last year. Since then, Dumas has secured new contracts including one with Hudbay Minerals at Lalor, and we are actively looking at several opportunities both in Canada and Latin America, including Mexico where they already operate with Fresnillo and Torex.

How does Dumas complement STRACON’s offering in mining?

Dumas is focused on the whole underground operation: they undertake shafts as well as lateral development and production mining. Meanwhile, STRACON is focused on surface work, construction activities and the operation of surface mines, so the two companies complement each other well. Specifically underground, the methodology is evolving in the region; an increasing demand for innovation and mechanization is changing the way mines have historically operated. We want to bring that expertise and experience into this market through Dumas.

What is the impact of the Dumas acquisition in terms of the overall size of STRACON?

Dumas will represent about 25% of the total combined business and 20% in terms of people. Dumas has around 1,000 employees and is currently operating in Canada and Mexico. It has previously operated in Central America, Peru and also Argentina. They currently have 12 projects: 10 in Canada and two in Mexico. The acquisition was completed with the objective of growing the underground business in Latin America and North America, as well as to provide STRACON with a platform from which to offer its surface mining and construction services in North America.

What are STRACON’s current projects in Peru?

We are currently working with Las Bambas, Hudbay and Tahoe Resources. We recently completed a project at La Zanja and we are also working at Quellaveco, in a joint venture with GyM, doing the earthworks for the plant site. We are also tendering work at several projects and continue to assist clients and their engineering companies with studies and development opportunities. Internationally, we continue to have a strong presence in the Cobre Panama project. This year will continue to be a strong year for STRACON in Panama as we complete the construction phase of the project, through commissioning. We are also active in Guyana, working for Guyana Goldfields, where we are undertaking open pit mining operations at the Aurora mine.

What is the split between contract mining activities and general construction work for STRACON?

Currently, about 75% of STRACON’s footprint lies in construction, and this year we are going to have a 50-50 split between Peru and the international market. In the North American market, the services are more centered around development activities, including shafts and other ancillary projects.

How can contractors help the industry incorporate new technology?

Contractors have a broad range of experience gained through exposure to different technologies and different ways of operating through their relationships with a range of clients, suppliers and presence across several projects. One example of this is Dumas operating in Goldcorp’s Borden mine, which has battery-powered equipment. This is the sort of experience a contractor can bring to the table.

What are going to be the highlights for STRACON in 2019?

It is an exciting time as the industry has picked up, and we have received very positive comments on the Dumas acquisition in both North and South America, in terms of expanding our underground capability in the region. We are excited to be in Guyana, and there are several potential projects that we are concentrating on in Argentina and in Chile. Overall, it is going to be a year of consolidation for STRACON.

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