The Perenti Global Ltd (ASX: PRN) share price is moving this afternoon after 2 key updates from the Aussie mining group.
Why is the Perenti share price climbing higher?
Perenti, formerly Ausdrill Ltd, today provided an update on its African Mining Services (AMS) business after last month’s incident at the Boungou Mine Site in Burkina Faso.
On 6 November, the Perenti share price tumbled after members of its AMS workforce were killed by militants near the Boungou Mine. The mine is 1 of 2 SEMAFO mines and has been in commercial production since September 2018.
AMS has now finished demobilising its workforce from the Boungou mine via helicopter. The company has since issued a notice of “force majeure” in relation to the project.
AMS is now in discussions with Canadian group SEMAFO to ensure an orderly contract termination should these circumstances continue.
Perenti has assessed the security landscape in Burkina Faso and is exiting the AMS Bissa contract in the country’s north.
The contract was up for renewal at the end of the year but AMS will exit by 14 December 2019. The contribution to Perenti’s FY20 underlying net profit guidance will be immaterial.
The Perenti share price is up 0.51% higher at $1.96 per share following the update.
What else did Perenti provide an update on?
The Perenti share price is pushing higher after its Surface Mining Industry Sector Group was awarded $165 million of work.
The new and existing contracts involve both its Ausdrill arm in Australia and the AMS contracts in Africa.
Ausdrill has secured $79 million in contracts across 3 projects in Queensland and Western Australia, while AMS continues to target a strong pipeline of surface mining projects across Africa.
The Perenti share price climbed as high as $1.98 per share today before falling on the early afternoon update.
The group’s shares are currently trading at $1.96 per share, at a price-to-earnings multiple of 6.6x.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.