The Perenti Global Ltd (ASX: PRN) share price is in the red today despite the release of a positive update.
At the time of writing, the diversified mining company's shares are travelling 1.5% lower to 85.2 cents.
New major contract award
Perenti shares briefly hit a two-month high during morning trade as investors weighed in on the company's latest announcement.
In a statement to the ASX, Perenti advised that its joint venture business, AMAX, has been awarded a significant contract.
AMAX is a joint venture between Perenti's surface mining business in Africa, African Mining Services (AMS), and Ghanaian mining services company, MAXMASS. The companies hold a 60% and 40% interest respectively.
The deal, worth around $470 million, will see AMAX conduct works over a five-year period at the Iduapriem gold mine. Situated in the western region of Ghana, AngloGold Ashanti CDI (ASX: AGG) owns the open-pit gold mine.
Expected to commence immediately, Perenti's work in hand will increase by roughly $280 million over the contract term.
This builds on AMS' mining activity at the site for open-pit mining services, equipment supplies and maintenance.
Perenti managing director and CEO Mark Norwell commented:
We're delighted to be extending our relationship with our long-standing client, AngloGold Ashanti. AMS has a reputation for delivering excellence while generating enduring value and certainty for stakeholders and the award of this new contract at a site where AMS has previously operated for AngloGold Ashanti provides further support for that reputation.
Perenti mining CEO Paul Muller went on to add:
We have provided surface mining services at the Iduapriem gold mine since 2012, establishing a successful partnership with AngloGold Ashanti.
… Under this contract, and through the AMAX joint venture, we expect to continue to support the many local businesses that have become important suppliers and contractors to our operations under previous contracts.
The joint venture also expects to employ more than 475 Ghanaians with approximately 40% of the workforce employed from the surrounding local communities and the remaining 60% from other regions within Ghana.
About the Perenti share price
Established in 1987, Perenti is one of the world's largest companies that provides surface and underground mining and support services. The group is headquartered in Australia, and has operations and offices across 11 countries.
Over the past 12 months, the Perenti share price has dropped over 20%, with year-to-date performance also down around 35%. The company's shares reached a 52-week high of $1.55 in February before the release of its half-year results. Since then, Perenti shares plummeted following a poor H1 FY21 scorecard and disappointing trading update in May.
On valuation grounds, Perenti commands a market capitalisation of roughly $602 million, with about 704 million shares on issue.
