The NRW Holdings Limited (ASX: NWH) share price is edging higher after announcing its subsidiary has been awarded a letter of intent (LOI). At the time of writing, the diversified service provider's shares are fetching $2.10, up 2.4%.
What did NRW announce?
Investors appear pleased with the company's latest update, sending the NRW share price higher in mid-morning trade.
According to its release, NRW advised that its wholly-owned subsidiary, Primero Group, has executed a letter of intent (LOI) with Panoramic Resources Limited. The agreement will see Primero conduct a number of works. These will fall under an operations and maintenance contract at the Savannah Nickel project. This will also include servicing and ensuring the smooth running of the mine's processing and surface infrastructure facilities.
The contract will be valid for an initial period of 3 years, with a possible 2-year renewal option. Additionally, it is expected that the new deal will generate $35 million in revenue for Primero.
NRW highlighted that Primero has been successfully expanding its business in the base and battery metals sectors. It anticipates that new pipeline opportunities in the operations and maintenance space could see it grow further.
NRW CEO, Jules Pemberton, commented:
This agreement further strengthens the annuity revenue stream that our Minerals, Energy and Technology division has been building through its various businesses.
RCR and its product support and maintenance business, DIAB through its shutdown and maintenance activities and now this significant award to Primero for a three year plus two-year option delivering operations and maintenance services to the Savannah Nickel Project.
Share price review
Over the past 12 months, the NRW share price has risen over 30%, but fallen around the same value year-to-date. The company's shares started the year strongly, before fading away when reporting season came in February.
At the current share price, NRW commands a market capitalisation of about $958 million, with 456.3 million shares on issue.
