The WestStar Industrial Ltd (ASX: WSI) share price is one of the best performers on the ASX today. This comes after the industrial services company announced its subsidiary has won a major construction contract.
At the time of writing, WestStar shares are up 20% to 3.6 cents. It's worth noting today's gain signifies a 52-week high for the company's share price, reaching as high as 4.1 cents during intraday trade.
Details of the contract
Investors are driving up WestStar shares following the positive news from the company.
In its statement, WestStar advised its engineering contractor business SIMPEC has been awarded a construction contract for the Iron Bridge Magnetite Project.
Located 145 kilometres south of Port Hedland, Western Australia, the project is a joint venture between Fortescue Metals Group Ltd (ASX: FMG) subsidiary FMG Magnetite Pty Ltd and Formosa Steel IB Pty Ltd.
Under the deal, SIMPEC will supply vertical construction services, hiring more than 500 workers to build a wet processing plant.
The project will consist of module, tank and major mechanical installations, large bore piping and electrical and instrumentation works.
Once completed, the wet processing plant will become a significant part of the new magnetite mine. The facility is expected to produce 22 wet million tonnes per annum of high grade, magnetite concentrate product.
It's estimated the contract will generate $145 million in revenue for SIMPEC. With works commencing immediately, it is anticipated that the wet processing plant will be delivered by the middle of 2022.
SIMPEC managing director Mark Dimasi said:
This is an important milestone achievement for SIMPEC in the delivery of our Company's mission to deliver major projects in the industry. The award of the Wet Plant Project represents our largest contract win to date with a first-tier client.
To achieve this in just over 4 years of being part of the Group is a remarkable achievement. It's proof that our people and culture are building a reputable Company that clients trust.
We look forward to further developing our relationship with the Iron Bridge Joint Venture and thank them for the opportunity to deliver such a high-profile project.
About the WestStar share price
The WestStar share price has gone from strength to strength over the past year, rising more than 150%. The company's shares have outperformed the broader All Ordinaries Index (ASX: XAO) on year-to-date metrics, up almost 60% versus 11% for the index.
WestStar presides a market capitalisation of roughly $34.1 million and has over 975 million shares on its registry.
