Did Perenti Global Limited continue to demonstrate their leading expertise?

Team Veye | 21 Feb 2020 ASX - PRN
Did Perenti Global Limited continue to demonstrate their leading expertise?

Perenti Global Limited (ASX: PRN)

Perenti surface business secures more than $150 million in work

Perenti Global Limited (ASX: PRN) on 20 February 2020 announced that its Surface Mining Industry Sector Group (ISG) had been awarded $155.5 million in new and extended contracts.

“These latest awards add to $165 million in surface work we announced in December 2019 and the $200 million contract we recently announced for our Underground ISG.

(Chart source: TradingView)

The new work, extensions, and expansion of scope are across ten projects, with highlights including:

  • A 3-year contract (with options to extend) for production drilling services with Boggabri Coal Operations (a part of Idemitsu Australia Resources Group) at its Boggabri Mine in New South Wales. 
  • A 3-year contract extension with a major iron ore producer for reverse circulation (RC) and grade control (GC) drilling at its Western Australian operations. 
  • A 12-month contract extension with Consolidated Minerals to support current mining operations and regional expansion projects. 
  • Expansion of services for a major mining contractor in Queensland which will double the contract value across the current three-year contract duration. 
  • A 12-month extension to existing works at Gold Fields’ St Ives and Granny Smith projects, which involves land and lake rigs for air core, RC and diamond drilling.
  • An equipment hire agreement with E&P at Gold Fields’ Damang Mine in Ghana. (Data Source – Company Reports)

 

Veye’s Take

The contracts reflect Perenti’s ability to deliver value for its clients by performing quality work across the Group’s diverse Surface portfolio. Through their surface business, it continues to demonstrate their leading expertise and reputation in the sector. This has resulted in a number of contract extensions and expansions for their quality client base. The stock had started falling sharply following a security incident in early November. Now it appears to have formed a double bottom near its support area. It may start recovering now. The lost momentum may, however, come only above $1.58. The stock price of the company has grown more than 25% till now since Veye’s “Buy” recommendation at $1.165 in Dec’18. We give a “Hold” recommendation on “Perenti Global Limited” at the current price of $1.465

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