Ausdrill wins Perseus extension

UPDATE 2.45pm: Shares in Ausdrill rose after the mining services company announced some rare good news - a contract extension in Africa worth $US223 million over five years.

The company's African subsidiary, African Mining Services (AMS), will provide open-pit mining services at Perseus Mining's Edikan gold operation in Ghana.

AMS has been providing mining services to Perseus at the mine since 2011.

The contract, scheduled to start this quarter is for three years with a two-year extension option.

Ausdrill's managing director Ron Sayers said the company was delighted to extend the relationship it had developed with Perseus in Africa.

"The award of this contract clearly demonstrates the capability of AMS to deliver quality service on schedule," he said.

Ausdrill shares were up two cents, or 7.27 per cent, to 29.5 cents at the close.

Meanwhile Perseus also announced it would go ahead with the development of its Sissingue gold mine in Cote d'Ivoire based on the findings of a revised feasibility study, which showed the project was technically feasible and economically robust.

The study found the project would cost $US106 million to develop, which could be funded from existing cash and a modest amount of third party debt.

The mine would produce 75,000 ounces a year for an initial 5.25-year minelife at average all-in sustaining costs of $US632 an ounce.

Construction is expected to begin in September with the first gold pour forecast within 14 months.

It will be Perseus' second operating mine after Edikan.

Perseus shares closed down 1.5 cents, or 5.09 per cent, to 28 cents at the close.