Perenti Limited Announces New Spartan Resources Contract and Extensions Worth A$160 Million
PRN (PRN) Share Update July 2024 Sunday 21st
Perenti Limited Secures New Contract and Extensions Worth A$160 Million
Perenti Limited (ASX: PRN) has announced a new development contract with Spartan Resources Ltd (ASX: SPR) and extensions to four existing projects, totaling A$160 million in revenue for FY25.
Instant Summary:
- New development contract with Spartan Resources Ltd.
- Extensions to four existing projects.
- Total revenue expected: A$160 million.
- No new growth capital required for extensions.
- Construction of the Dalgaranga project to start this quarter.
New Contract Award
Perenti Limited, a diversified mining services group, has announced a significant new development contract with Spartan Resources Ltd. The contract involves constructing an underground exploration drill drive at the Dalgaranga Gold Project in Western Australia. The drill drive will run parallel and adjacent to the mineralized gold zones of Never Never, Pepper, Four Pillars, and West Winds, supporting future production plans.
Construction is set to begin in the current quarter and is expected to take 10 months to complete. The project will use a combination of existing capital equipment and an additional A$5 million of new growth capital.
Contract Extensions
In addition to the new contract, Perenti has secured extensions to four existing projects. These include:
- Siou and Wona underground at the Mana gold mine for Endeavour Mining plc in Burkina Faso.
- An existing copper and gold underground mining project in Canada.
- Spotted Quoll nickel mine for IGO Ltd in Australia.
- Mt Colin copper mine for Aeris Resources Ltd in Australia.
These extensions are expected to contribute approximately A$160 million in revenue for FY25. Notably, the project extensions do not require new growth capital.
Management Comments
Mark Norwell, Managing Director & CEO of Perenti, expressed excitement about the new Dalgaranga project, stating, 'The greenfield underground at Dalgaranga project is an exciting opportunity. The resource has the potential to grow into a high-grade gold mine, and we look forward to supporting Spartan Resources to achieve their targets during the months ahead.'
Gabrielle Iwanow, President of Contract Mining at Perenti, added, 'We are pleased to be working with Spartan Resources on the new underground Dalgaranga Gold Project in Western Australia. Barminco has a long history of working with Western Australian gold producers, and we look forward to building an excellent relationship with their team as they advance towards production.'
The announcement of new and extended contracts worth A$160 million is likely to have a positive impact on Perenti's stock. The new contract with Spartan Resources and the extensions of existing projects demonstrate the company's strong client relationships and ability to secure ongoing work. This should bolster investor confidence and potentially lead to an increase in the stock price.
Investor Reaction:
Investors and analysts have reacted positively to the news. The ability to secure new contracts and extend existing ones without additional growth capital is seen as a strong indicator of Perenti's operational efficiency and market position.
Conclusion:
Perenti Limited's announcement of new and extended contracts totaling A$160 million is a significant development for the company. Investors should keep an eye on the progress of the Dalgaranga project and the impact of these contracts on Perenti's financial performance in FY25. The company's strong client relationships and ability to secure ongoing work are promising signs for future growth.