The Perenti (ASX:PRN) share price is falling on Monday

This ASX mining share is going downhill.

| More on:
Looking down on two African workers shaking hands over an agreement in an open pit mine.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Perenti Global Ltd (ASX: PRN) share price is in the red today despite the release of a positive update.

At the time of writing, the diversified mining company's shares are travelling 1.5% lower to 85.2 cents.

New major contract award

Perenti shares briefly hit a two-month high during morning trade as investors weighed in on the company's latest announcement.

In a statement to the ASX, Perenti advised that its joint venture business, AMAX, has been awarded a significant contract.

AMAX is a joint venture between Perenti's surface mining business in Africa, African Mining Services (AMS), and Ghanaian mining services company, MAXMASS. The companies hold a 60% and 40% interest respectively.

The deal, worth around $470 million, will see AMAX conduct works over a five-year period at the Iduapriem gold mine. Situated in the western region of Ghana, AngloGold Ashanti CDI (ASX: AGG) owns the open-pit gold mine. 

Expected to commence immediately, Perenti's work in hand will increase by roughly $280 million over the contract term.

This builds on AMS' mining activity at the site for open-pit mining services, equipment supplies and maintenance.

Perenti managing director and CEO Mark Norwell commented:

We're delighted to be extending our relationship with our long-standing client, AngloGold Ashanti. AMS has a reputation for delivering excellence while generating enduring value and certainty for stakeholders and the award of this new contract at a site where AMS has previously operated for AngloGold Ashanti provides further support for that reputation.

Perenti mining CEO Paul Muller went on to add:

We have provided surface mining services at the Iduapriem gold mine since 2012, establishing a successful partnership with AngloGold Ashanti.

… Under this contract, and through the AMAX joint venture, we expect to continue to support the many local businesses that have become important suppliers and contractors to our operations under previous contracts.

The joint venture also expects to employ more than 475 Ghanaians with approximately 40% of the workforce employed from the surrounding local communities and the remaining 60% from other regions within Ghana.

About the Perenti share price

Established in 1987, Perenti is one of the world's largest companies that provides surface and underground mining and support services. The group is headquartered in Australia, and has operations and offices across 11 countries.

Over the past 12 months, the Perenti share price has dropped over 20%, with year-to-date performance also down around 35%. The company's shares reached a 52-week high of $1.55 in February before the release of its half-year results. Since then, Perenti shares plummeted following a poor H1 FY21 scorecard and disappointing trading update in May.

On valuation grounds, Perenti commands a market capitalisation of roughly $602 million, with about 704 million shares on issue.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A man clenches his fists in excitement as gold coins fall from the sky.
Broker Notes

These ASX 200 shares can rise 20% to 50%

Let's see which shares are being tipped to rocket from current levels.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors panicked when the latest inflation figures came out today.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Broker Notes

Why Guzman Y Gomez shares are a sell

Goldman Sachs has given its verdict on the burrito seller.

Read more »

A man pulls a shocked expression with mouth wide open as he holds up his laptop.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Mac Copper, Pro Medicus, Web Travel, and Yancoal shares are pushing higher today

These shares are having a good time on hump day. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Fisher & Paykel Healthcare, IPD, and Predictive Discovery shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

Man looking at his grocery receipt, symbolising inflation.
Share Market News

How are ASX 200 investors responding to the latest Aussie inflation numbers?

The ASX 200 was up 0.2% today before the ABS reported the latest inflation figures.

Read more »

A couple makes silly chip moustache faces and take a selfie on their phone.
Broker Notes

Macquarie sees more upside in Telstra shares – What are they worth?

Telstra shares are up 34% over the past year, and Macquarie thinks there's more to come.

Read more »