The Perenti Global Ltd (ASX: PRN) share price climbed today on news the company has secured a major underground mining contract extension.
From a negative start in early trading, the Perenti share price shot up to an intraday high of $1.35 after the company announced the deal this afternoon. However, at the closing bell, its shares had slightly dipped to $1.34, up 3%.
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What did Perenti announce?
The engineering company advised that its subsidiary, hard-rock underground miner Barminco, has been awarded a contract extension worth more than $200 million.
The agreement will see Barminco continue operations at Gold Field's Agnew Gold mine in Leinster, Western Australia. The company has performed underground mining operations at the site for more than 10 years.
Under the terms, and in light of increased development and production at Agnew, Barminco will provide full underground mining services. These include mine development, production, diamond drilling, vertical development, design planning and scheduling, and equipment supply and maintenance.
The contract is valued at more than $200 million depending on works completed.
Management commentary
Perenti managing director and CEO Mark Norwell hailed the extended partnership agreement, saying:
Part of our 2025 group strategy is to organically grow this part of our business. The recent achievements of Barminco in this regard are a result of the strong relationships we share with our clients and the value we create for them through our world class underground mining capabilities.
Perenti Mining CEO Paul Muller added:
We have been providing safe and efficient underground mining services at Agnew for more than 10 years and we are very pleased to be supporting Gold Fields with their increased development and production requirements. This extension will take our current term out to December 2023.
How has the Perenti share price performed?
The Perenti share price is down almost 7% over the past 12 months. The company's shares took a dive in the COVID-led market freefall in March last year, falling to a 52-week low of 45 cents. From there, its shares reached a 52-week high of $1.60 in June.
Perenti commands a market capitalisation of $943 million at today's share price.
