Drilling services provider Mitchell Services has secured a contract to start work at Evolution Mining‘s Pajingo and Cracow mines in Queensland, Australia.

Under the $27m two-year contract, Mitchell will provide underground and surface drilling services at the mine sites.

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The Pajingo field was discovered by Battle Mountain Gold Company in 1983 and first gold was produced from open-pit mines in 1986.

"It is pleasing to note that we achieved sales values of between 20% and 30% in excess of the reserve prices set and that the ex-Nitro Drilling assets were sold for values greater than their allocated cost prices from the recent acquisition."

Gold mineralisation at Cracow mine is hosted in steeply dipping low sulphidation epithermal veins that are found as discrete lodes, composed of varying percentages of quartz, carbonate and adularia.

Mitchell plans to use drill rigs that were recently purchased from Nitro Drilling for the surface work, while the underground work would be carried out using drill rigs that have been newly sourced.

Mitchell Services executive chairman Nathan Mitchell said: "The award of this work is encouraging as it further strengthens an ever increasing Tier 1 client base whilst providing diversification in revenue streams through the significant underground drilling programme."

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Recently, Mitchell completed sales of surplus assets that have yielded around $4.2m in net proceeds to date, as part of its previously announced strategy.

The company plans to use a part of the proceeds to reduce existing debt and the remaining to assist in funding the underground drill rigs required.

Mitchell Services CEO Andrew Elf said: "It is pleasing to note that we achieved sales values of between 20% and 30% in excess of the reserve prices set and that the ex-Nitro Drilling assets were sold for values greater than their allocated cost prices from the recent acquisition."