Pic: Comeback Images/iStock via Getty Images
Ground Breakers: Perenti comeback continues, Ramelius goes unconditional at Breaker
Mining
share
- Perenti posts near 10% gain after $630 million Newmont contract win
- Gold miner Ramelius declares Breaker takeover offer unconditional
- Materials nears breakeven as energy runs
It’s not often you get a 10% move at the large end of the mining market, but we have that this morning in the shape of rehabbed mining services player Perenti Global (ASX:PRN).
A rebrand of the legendary Aussie drilling contractor Ausdrill after its merger with underground mining specialist Barminco a few years ago, the years following the long-courted marriage were less than easy.
But after a honeymoon to rival a stay at the White Lotus, PRN is back in form, up more than 80% year to date to $1.27 (still only around half of 2018 levels) and a market cap of more than $850m.
After outperforming in the first half with a 75% lift to a $61m profit and 67% rise in EBIT to $134m, PRN in February issued an increase in earnings guidance to $250-$265 million.
Its latest victory is a new five year contract award at the Subika underground mine at Newmont’s Ahafo complex.
One of Africa’s biggest gold mines, the deal will see PRN operate the $630m contract over 60 months backdated to January 1 this year.
Newmont will also purchase capital equipment as part of the deal, reducing the capital intensity on delivering the project to PRN’s African Underground Mining Services, which will run the JV in a 70-30 split with Ghanaian contractor Rocksure International.
Located 310km north west of Accra, the UMA JV will deliver underground development, production, diamond drilling and support services at the Subika mine, where AUMS first began work in mid-2017.
The new deal will take Perenti’s engagement in Ghana to almost four decades, having moved into the country as Ausdrill in 1991.
“With this new contract, Perenti not only expands its tenure in Ghana but furthers its relationship with Newmont, the world’s leading gold company with a world-class portfolio of assets in favourable mining jurisdictions,” PRN MD Mark Norwell said.
“We are very pleased that we will continue to deliver value and certainly to Newmont and our other stakeholders in Ghana and beyond.”
PRN shares were up 9.7% this morning.
Perenti Global (ASX:PRN) share price today:
Ramelius unconditional in Breaker lovefest
Ramelius Resources (ASX:RMS) is on the cusp of gaining majority control of ASX-listed gold explorer Breaker Resources (ASX:BRB), declaring its offer to acquire the WA junior unconditional.
Ramelius now holds around 49.93% of Breaker stock, making it virtually certain the mid-tier gold producer will cross the 50% threshold it had set to make the deal unconditional.
Backed by Breaker’s board, the deal will see Breaker investors get 1 RMS share for every 2.82 BRB shares they hold. Originally a 41% premium at 40c per share, the deal has grown in immediate value in the weeks since thanks to a resurgent gold price.
That has provided steam for existing gold miners to bridge a value gap to the majors. RMS shares are up 38.51% year to date and more than 10% over the past month.
The Edna May and Mount Magnet gold miner produced 54,244oz at all in sustaining costs of $1873/oz in the March quarter, but expects to ramp up to 67,500-77,500oz at $1700-1800/oz this quarter as high grade ore from the Penny gold mine finds its way to the Mt Magnet mill in increasing quantities.
Breaker’s Lake Roe gold project will more than double RMS’ resource base at a new gold hub east of Kalgoorlie, building on the acquisition of the 1.1Moz Rebecca gold project from Apollo Consolidated in 2021.
Gold is not far off record highs, with global economic wobbles this year reviving safe haven demand and sending prices to US$1990/oz, or $3008/oz on an Australian dollar basis.
The materials sector was virtually unchanged in a strong day for the local market, though high performing energy stocks including coal miner Whitehaven (ASX:WHC) pushed that sector up 1.46%.
Commodity prices were largely unchanged on Friday, with still high wage growth in the US raising the prospect of further rate rises and China’s PMIs for April coming in weaker than expected after a strong March.
Ramelius Resources (ASX:RMS) and Breaker Resources (ASX:BRB) share prices today:
