Here’s why the SRG Global (ASX:SRG) share price is climbing today

The SRG Global Ltd (ASX: SRG) share price is up 2% after the company announced two contract wins. Here’s what you need to know.

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The SRG Global Ltd (ASX: SRG) share price is lifting higher today. This comes after the company advised the ASX market that it has received two contract awards.

In mid-morning trade, the SRG Global share price is up 2% to 50 cents.

SRG Global is an Australia-based international construction, maintenance and mining services company. The group helps build skyscrapers, bridges, dams, transport infrastructures, mining, and oil and gas projects for customers worldwide. In addition, the company offers drilling solutions, civil engineering, and industrial maintenance services.

Contract awards for SRG Global

In this morning’s release, SRG Global advised it has secured two new contracts, worth $45 million in total.

The first deal, awarded by GFG Liberty OneSteel, will see SRG Global deliver engineered access solutions at the Liberty Steelworks site in Whyalla, South Australia. The agreement will run for an initial 3-year period, with an extended 2-year option.

The second deal, entered with Pit N Portal Mining Services, is for drilling support at RED 5 Limited’s Great Western gold mine in Western Australia. Under the agreement, SRG Global will provide production drill and blast services as well as the supply for explosives to uncover mineral deposits. The contract is set for an initial 12-month term.

SRG Global will start both projects immediately.

What did the managing director say?

SRG Global managing director David Macgeorge, welcomed the progress, saying:

We are very pleased to have secured these two term contracts, adding to our recurring annuity earnings.

Importantly, the GFG Liberty OneSteel contract is with a repeat customer, providing new services in addition to our existing refractory services term contract.

The Pit N Portal contract was specifically targeted as it builds upon our mining services portfolio of high-quality growth commodities whilst diversifying SRG Global’s customer base.

About the SRG Global share price

The SRG Global share price fell more than 50% in March due to COVID-19 impacts. Since then, its shares have gained more than 175%.

Based on the current share price, SRG Global has a market capitalisation of $220 million.

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Motley Fool contributor Aaron Teboneras 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.

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