The Perenti Global Ltd (ASX: PRN) share price is on the rise in morning trade. This comes after the company announced it has received a lucrative opportunity to expand its North American presence.
At the time of writing, the mining services company's shares are fetching $1.13, up 4.15%.
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Continued North America expansion
Perenti shares are in the green today after investors digest the company's latest positive announcement.
In today's release, Perenti advised its subsidiary, Barminco, has received a letter of intent from Newcrest Mining Ltd (ASX: NCM) for works at the Red Chris Project.
Located around 80 kilometres south of Dease Lake in northwest British Columbia, Canada, the Red Chris Project is a copper-gold mine. In 2019, Newcrest acquired a 70% interest in the Red Chris Project, in a joint venture with Imperial Metals.
Under the proposed agreement, Barminco will conduct a number of services for the development of an underground exploration decline. These include mobilisation and site establishment activities and development to build a 3.5-kilometre decline.
Essentially, a decline is an underground system of ramps and horizontal crosscuts that connects access points targeting specific mineralised areas. However, Newcrest will also use the decline to support access to extend the operation of the open pit.
It is expected that both parties will come together in the coming weeks to formally sign off on the first stage of works. Commencement of ground activities is scheduled for mid-2021.
The Perenti share price is responding positively after the company advised it anticipates the project will generate revenue of $38 million over the 16-month period.
Management commentary
Perenti managing director and CEO Mark Norwell touched on the exciting development, saying:
Geographic expansion has been a key focus of our 2025 strategy and this early-stage work at Red Chris builds on our regional growth capabilities after commencing in North America just over a year ago.
The underground exploration decline works are a significant opportunity and puts the Company in a strong position to access the much wider scope of works associated with the potential block cave development that Newcrest aims to progress towards in the coming years.
This project fits with our strategy as we continue to pursue high quality growth opportunities within attractive mining jurisdictions, partnering with top-tier producers holding multi-mine portfolios and long-life, expandable assets.
Perenti share price summary
The Perenti share price has gained around 41% over the past year but is down 20% year to date. The company's shares have been on a steep decline since mid-February following the release of its half-year results.
Perenti has a market capitalisation of roughly $758 million, with more than 704 million shares outstanding.
