Perenti delivers solid FY2021 Results: proactively managing headwinds and positioning for growth

Perenti has delivered an FY21 result consistent with its revised expectations, achieving solid operational performance and growth from its Underground Mining business and an improved second half performance from its Surface Mining business.

This solid result was delivered in a year where the Company’s financial performance was impacted by headwinds including the ongoing impacts of the COVID-19 pandemic on our international operations, tighter Australian labour market and a strengthening Australian dollar.

Perenti continues to invest in our people, systems and mining equipment to build strong foundations and support the ramp-up of the Company’s key growth projects in FY22 to deliver business growth in FY23 and beyond.

Mark Norwell, Managing Director and CEO of Perenti, said: “Firstly, I want to recognise our people, who provided high quality mining services to our clients with a focus on continuity of operations to deliver enduring value and certainty.

“Our Underground business continued to be a standout performer, delivering a third consecutive year of earnings growth with a strong FY21 contribution. Impressively, this growth has been delivered in a year where we saw the slower than anticipated ramp up at several recently secured international projects due to the prolonged, and ever-changing, nature of the COVID-19 pandemic.

“As expected, due to the planned contraction of our Surface Mining business following our strategic transition out of Yanfolila and Boungou, FY21 revenue, EBIT(A) and margins were softer than FY20. Pleasingly during the second half of FY21, earnings and margins generated by the Surface business more than doubled compared to the first half.

This tangible and sustainable improvement in performance is attributable to the implementation of the findings of the AMS Strategic Review and continued solid performance from our Australian business. We are in a good position to move our AMS business forward and are encouraged by securing the Motheo and Iduapriem contracts, both of which are examples of the quality of contracts that AMS will pursue.”

“The Investments business navigated difficult conditions during FY21 with softer east coast equipment rental market conditions impacting revenue and earnings. In response, we revitalised the leadership team and have increased our market activities including the implementation of a more targeted sales strategy, which has increased asset utilisation rates by 5 per cent since December 2020.

“We continue to look to the future. Throughout FY21 we made prudent investments in our people and systems, while managing our balance sheet to ensure we are well positioned to fund our 2025 strategic growth aspirations. An integral part of this strategic growth is our technology driven service offering, idoba, launched in July. Through idoba we plan to improve our competitive advantage by developing a unique capability in emerging digital mining, technology and innovation.”

You can read the full ASX Release here.

Perenti’s expansion in North America continues with Letter of Intent for works at the Red Chris Project

Perenti is pleased to announce its subsidiary, leading hard-rock underground miner Barminco, has received a Letter of Intent from Newcrest Mining Limited for the development of an underground exploration decline at the Red Chris Project in British Columbia, Canada.

The Red Chris Project is a 70:30 joint venture partnership between Newcrest and Imperial Metals Corporation (TSX:III) and is located approximately 1,700kms north of Vancouver.

The Red Chris Project lies within Tahltan Territory, home to some of Canada’s richest mineral resources in an area known as the Golden Triangle. Barminco has developed a strong relationship with the Tahltan Nation Development Corporation and intends to establish the foundations for an ongoing partnership to create social and economic value for the members of the Tahltan Nation and the region.

Perenti Managing Director and Chief Executive Officer Mark Norwell said the opportunity at Red Chris is a very encouraging step on the road to expanding the Company’s North American presence.

“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” Mr Norwell said.

“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.”

Mining Chief Executive Officer Paul Muller said: “We acknowledge and respect the Tahltan as the First Nations people of the area and we look forward to working together at the Red Chris Project. In partnership with the Tahltan Nation Development Corporation, Barminco will also look to work with local Tahltan-operated businesses and provide local employment, education, training and development initiatives to support the social and economic development of the Tahltan people.”

“Our focus at Red Chris will be on delivering safe, reliable and efficient development services and we look forward to building a long and productive relationship with Newcrest, the members of the Tahltan Nation and all of our stakeholders in British Columbia.”

For more information click here.

Disciplined strategy execution and strong Underground performance underpin Perenti’s 1H21 financial results

Perenti has delivered robust operating and financial results for the first half of financial year 2021 (FY21) and continues to deliver value and certainty for our clients through disciplined strategy execution, despite the challenging global environment.

Mark Norwell, Managing Director and CEO of Perenti, said: “The financial and operational performance of the Group in the first half of FY21 was very encouraging as we continue to take steps to deliver on our 2025 Group Strategy while navigating the challenging and ever-evolving COVID-19 pandemic, which continues to impact our international operations.

“Our COVID-19 taskforce has done a fantastic job putting the steps in place to protect our people and our business from the most severe impacts of the pandemic, allowing us to deliver continuity of service for our clients. While this is a great achievement, we must also recognise that our financial results have been impacted, not only by COVID-19, but by the strengthening of the Australian dollar against the United States dollar and a softer than expected Australian east coast equipment rental market.

“Our Underground business delivered record earnings of $110.0 million, representing 90% of our Group EBIT(A) at an average margin of 15.1%. In addition, since 1 July 2020 the Group secured $970.0 million of new underground work and contract extensions, predominantly in Western Australia, demonstrating the strength of Perenti and our ability to generate value for our clients through the delivery of high-quality mining solutions.

“The Surface business remained profitable, generating $4.0 million EBIT(A), supported by our Australian operations and the Sanbrado Project in Burkina Faso. During the half we completed our strategic review of African Mining Services (AMS) and implemented a number of the report findings, including progressing negotiations of an early exit from the loss-making Yanfolila contract and the conclusion of the sale of Boungou assets. Upon completion, these two actions are expected to generate between $80 to $90 million of cash, of which $14 million has been received, to redeploy across the business where we are targeting to generate returns of +20%.

“Another outcome of the strategic review is the consolidation of our Surface and Underground businesses into a single Mining business, under the leadership of Paul Muller as our Mining CEO. Paul has been the CEO of Barminco for 3.5 years and is highly experienced in both surface and underground mining and is an excellent leader with an enviable track record of delivering positive outcomes and I look forward to his continued success.

“Looking ahead, the resources sector continues to go from strength to strength. Exploration expenditure is forecast to increase during 2021 and the value of committed mining projects, in Australia alone, is the highest in a decade with many more feasibility stage projects in the pipeline. Perenti has a strong balance sheet, a highly experienced team with a track record of delivering excellence across our businesses. The significant investments we have made in our people, our business structure and our systems will ensure we continue to be well positioned to capitalise on the expected resources sector growth as we deliver against our 2025 strategy.”

For more information and to view the full Results package click here.

Perenti secures A$200 million Agnew underground mining contract extension

Perenti is pleased to announce its subsidiary, leading hard-rock underground miner Barminco, has been awarded a contract extension at Gold Fields’ Agnew Gold Mine in Leinster, Western Australia. The extension is valued at over A$200 million and is for full underground mining services, driven by an increase in development and production physicals at the mine. Barminco has been successfully operating at Agnew since 2010.

Perenti Managing Director and Chief Executive Officer Mark Norwell said: “We are delighted to be extending our relationship with our long-standing client, Gold Fields.

“Part of our 2025 group strategy is to organically grow this part of our business. The recent achievements of Barminco in this regard are a result of the strong relationships we share with our clients and the value we create for them through our world class underground mining capabilities.”

Perenti Mining Chief Executive Officer Paul Muller said: “We have been providing safe and efficient underground mining services at Agnew for more than 10 years and we are very pleased to be supporting Gold Fields with their increased development and production requirements.  This extension will take our current term out to December 2023.”

Perenti secures A$200 million Agnew underground mining contract extension • 200825 Barminco screen
Gold Fields’ Agnew Gold Mine located close to Leinster in Western Australia.

Perenti secures A$307 million in new work and contract extensions

Perenti is pleased to announce the award of more than A$307 million in new work and contract extensions at Australian mining projects through leading hard rock underground mining business, Barminco and Australia’s premier drilling services provider, Ausdrill.

The new work and contract extensions are across four underground and two surface mining projects in New South Wales and Western Australia, with long-term clients Gold Fields, Western Areas, Consolidated Minerals and Evolution Mining.

Perenti Managing Director and CEO Mark Norwell said the contracts reflected Perenti’s ability to deliver value and certainty for its clients by providing them with quality mining solutions across the Group’s diverse portfolio.

Perenti Mining Chief Executive Officer, Paul Muller, said the new and extended contracts were also a result of the enduring relationships Barminco and Ausdrill have shared with their clients.

Read more here.