Author: prnadmin

Strong half year result positions Perenti on target for FY25 guidance

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Perenti has delivered interim financial results in-line with our internal expectations, positioning the Company to meet full year guidance in FY25. The strength of existing work in hand was demonstrated by revenue for the first half exceeding the prior half and establishing a new record.

As guided to the market after the full year results in August 2024, the first half result for FY25 was expected to deliver a lower percentage of operating cash flow and lower EBIT(A) than the second half. This skew was further exacerbated by the late receipt of $42.4 million of debtors subsequently paid in early January 2025.

The Board and Management remain confident in the strong free cash flow of the underlying business and improving outlook across all divisions. This enabled the declaration of a 3.0c per share interim dividend, compared to 2.0c per share paid at the end of the previous corresponding period.

Mark Norwell, Managing Director & CEO of Perenti, said: “At Perenti we continue to demonstrate the strength and resilience of our business model to generate consistent cash-backed returns through fluctuations in commodity and market cycles.

“This resilience comes from establishing a global and diversified portfolio of mining services and our scale, particularly in underground mining and drilling. The strong free cash flow generated by Contract Mining and Drilling Services has allowed the reduction of gross debt during the period, ongoing share buybacks and the declaration of an increased interim dividend.

“The Drilling Services division, formed in FY24 from the combination of Ausdrill and the four DDH1 businesses, is now showing clear cost synergies, in addition to the cash tax synergies. The increased scale of the division is evident when in December 2024, Perenti Drilling Services was reported to be the second-largest global drilling group when measured by total metres drilled3. The division is operating well and is positioned to capitalise on increasing exploration activity expected in the coming months.

“Another example of the advantages of the portfolio approach was seen in Contract Mining, which once again delivered strong performance despite financial underperformance from the Zone 5 underground project in Botswana and the closure of three underground Australian nickel operations during the last 12 months. This reiterates the benefits of both our scale and the commodity agnostic nature of our underground operations. We are not dependant on any single project and the scale of our operations allows reallocation of people and equipment between projects, retaining key employees and reducing capital expenditure requirements.

Consistent results: Perenti subsidiary Barminco operates in Nevada, USA

“Our performance is due to our people, and I am immensely proud of our dedicated teams worldwide who consistently deliver exceptional services to our clients. We prioritise and value the safe and sustainable delivery of our services because we want our people to return safely at the end of every shift. On behalf of the Board and Group Executive, I sincerely thank them for their ongoing contributions.

“Perenti will continue to focus on delivery of value and certainty for all stakeholders. To clearly demonstrate this commitment, we reaffirm our guidance for FY25. We expect to deliver revenue of between $3.4 billion and $3.6 billion; EBIT(A) of $325 million to $345 million; leverage of between 0.6x to 0.7x; net capital expenditure of ~$330 million; and free cash flow greater than $150 million.”

To read our full 1H25 results visit Investor Centre.

Barminco wins first underground mining contract in USA for Nevada Gold Mines  

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We are pleased to announce that our underground mining business, Barminco, has signed a contract to undertake underground development and ground support for Barrick-operated Nevada Gold Mines (‘NGM’) at the Goldrush Project in Nevada, USA.  

Nevada is the leading U.S. state in gold production and NGM is a joint venture between Barrick Gold Corporation (61.5%) and Newmont Corporation (38.5%) who combined their significant assets across Nevada in 2019. In total, the NGM JV represents the largest gold-producing complex in the world and contains 10 underground mines and 12 surface mines.  

The Goldrush Project is a new underground development and is targeting production of approximately 400koz by 2028 with a 24-year life of mine.  

The contract details include: 

  • Contract value: Circa AUD $120 million 
  • Contract term: 36 months with commencement date from February 2025. 
  • Services: Underground development and ground support services. 
  • Capital requirement: Idle fleet to be utilised and no new growth capital required for initial scope. 

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said “Securing the Goldrush underground project is an excellent achievement by our Barminco North America team. The Nevada Gold Mines JV is a leading gold mining complex, operating in areas with mining history since the mid-1800s. Fellow Perenti business, Swick has operated in the USA since 2009 and shared valuable experience with Barminco, demonstrating the combined strength of our group. Consequently, we are very pleased to be awarded this project and continue our strategic expansion into the North American market.” 

Gabrielle Iwanow, President of Contract Mining at Perenti said “The North American market is the largest hard rock, underground mining market in the world and this is Barminco’s first project in the USA. This win represents a milestone achievement for Barminco and our Contract Mining team as we execute our growth strategy. With an expanded operational footprint in North America, Barminco looks forward to continuing safe and productive operations for our clients in both the USA and Canada.” 

View the official ASX announcement and more in our Investor Centre

Barminco secures $157m underground contract extension with IGO at Nova

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Perenti has announced that our underground mining business, Barminco, has signed a contract extension with IGO Ltd to continue mining at the Nova underground nickel mine in the Fraser Range, Western Australia.

Barminco’s involvement at the Nova mine commenced in early 2015 when it was a greenfield site. This contract extension is worth $157 million and runs for 29 months.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said “We are immensely proud that Barminco has been present since the beginning of the Nova operation. This contract extension is a testament to the strength of our relationship with IGO and underscores our commitment to collaborating with our clients to generate value together.”

Gabrielle Iwanow, President of Contract Mining at Perenti said “Barminco is excited to continue the delivery of the world-class critical minerals operation at Nova. The ongoing safe and reliable mine production showcases how a collaborative approach and willingness to explore innovative solutions can deliver positive outcomes, even amidst significant market challenges.”

View ASX announcement

Perenti and Sandvik to collaborate in developing diesel-electric equipment

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Global mining services provider Perenti and Sandvik have signed a memorandum of understanding at MINExpo INTERNATIONAL® 2024 centered on developing cutting-edge diesel-electric equipment for underground mines. This collaboration aims to enhance sustainability, efficiency, and productivity in underground mining operations.

Under the agreement, the companies will work together to optimize underground diesel-electric loaders and trucks. Through Perenti’s leading underground mining business, Barminco, the collaboration will focus on improving Barminco’s operations and generating valuable insights and data to further refine Sandvik’s diesel-electric technology.

The initial phase of the collaboration involves establishing a shared vision for optimizing Sandvik’s diesel-electric machines to meet Perenti’s requirements. Perenti will contribute to the machine design and provide feedback at various testing stages, including pre-factory testing, operational testing and trial testing.

Mark Norwell, Perenti Managing Director & CEO, welcomed the agreement, saying Perenti was excited to explore the full potential of diesel-electric solutions as part of its journey to decarbonisation.

“We are constantly looking for ways to improve the working environment and boost underground safety, efficiency and sustainability,” he said. “Diesel-electric equipment has the potential to do this.

Collaborating with our partners is a critical step in the process, and we believe that working with Sandvik enables us to benefit from cutting-edge technology and also play a role in shaping the equipment that the wider industry will be using tomorrow. That’s good for us and it’s good for our customers.”

Mats Eriksson, President of Sandvik Mining and Rock Solutions, emphasized that the mutual benefits of collaboration often do lead to better products – and safer, more efficient operations.

“Perenti, through its businesses including Barminco, is one of the world’s leading mining services providers, and can provide us with design suggestions and fantastic insights into real-world mining conditions,’ he said. “Together, we can create equipment optimized for Perenti’s working conditions while also developing the most advanced diesel-electric machines available anywhere in the world.”

Diesel-electric mining equipment is seen by many within the industry as a way of achieving cleaner, more sustainable and more reliable mining, without the structural changes required for a fully electric operation.

Diesel-electric machines typically have a diesel engine that drives a generator which, in turn, provides electricity to motors responsible for movement and operating equipment. Unlike conventional diesel, diesel-electric machines generally have no torque converter and fewer rotating components, allowing for a more flexible design, requiring less maintenance and enabling lower operating costs while maintaining high availability.

Sandvik first announced last year that it was moving ahead with developing a diesel-electric range of underground loaders and trucks to complement its leading battery-electric offering. The decision followed the showcasing of Sandvik’s Toro™ diesel-electric truck demonstrator to customers at a technology workshop in Turku, Finland in 2022.

Las Vegas, Nevada, USA, September 25, 2024

Perenti delivers another record year of earnings and free cash flow in FY24

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Perenti has delivered another year of strong financial results, headlined by record revenue and underlying earnings and free cash flow of $184 million. The consistent strong cash flow and the fundamental strength of the business has enabled the declaration of a 4 cents per share final dividend. This lifts the total dividend for FY24 to 6 cents per share, implying a 5.9% yield based on the 19 August 2024 closing share price.

Mark Norwell, Managing Director & CEO of Perenti said, “The Perenti team has successfully delivered another year of impressive results. The strong free cash flow has allowed us to further reduce leverage, recommence dividends and continue our buyback, all whilst maintaining investment in earnings growth during FY24.

“During recent years, our business has built significant scale and diversity across our divisions. Our scale and diversity allows for fluctuations related to operations or capital requirements to be smoothed out as projects move through the different stages of development, operational ramp up and mine closure. This ultimately allows for greater consistency in earnings and reliable free cash flow generation. The recommencement of dividends is a tangible demonstration of our optimism that we will continue to deliver free cash flow in the future. To offer our shareholders additional certainty, we are pleased to announce that the Board has agreed to a dividend policy targeting a payout of 30-40% of underlying NPAT(A) during the years ahead.

“Perenti is focused on delivering value and certainty for all its stakeholders. I am incredibly proud of our dedicated team who have delivered this record result. On behalf of the Board and Group Executive I sincerely thank all our staff, and I look forward to working with them to deliver again in FY25.”

For more information on Perenti’s FY24 Results visit our Investor Centre

Barminco secures underground contract extension with Barrick at Hemlo, Canada

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Perenti is pleased to announce that its underground mining business, Barminco, has signed a three-year contract with Barrick Gold Corporation to continue contract mining at the Hemlo gold mine in Canada.

Hemlo is located 350 kilometres east of Thunder Bay in Ontario, Canada and has been in production since 1989. In 2019, Barrick transitioned the operation to a contract mining model from owner operator, and Barminco has been the main underground contractor since. The contract is initially for 36 months, but also includes two 12-month options to extend. If these options are exercised, Barminco will be operating at Hemlo until 2029.

Under the terms of the existing contract, Barrick owns the current fleet of underground equipment and will procure any additional fleet required for the mine. This significantly reduces the capital intensity of the project for Barminco. The total contract value is worth more than AUD$200 million and involves underground mine development, production and mining support services.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said “The continuation of our relationship with Barrick at the Hemlo gold mine for at least the next three years is another great example of how our Contract Mining team extends contracts over the life of a mine operation. The long-term nature of these relationships is built on a foundation of creating enduring value and certainty for our clients. This aligns our operational success with the goals of our clients and creates a collaborative working environment.

“The low capital intensity of this project is one of several capital light contracts we operate across the organisation, with our first capital light contract secured in 2018.”

Gabrielle Iwanow, President of Contract Mining at Perenti said “We are pleased to continue working with Barrick and demonstrating our leading underground capability in the North American market. Barrick is an important client for Barminco and we look forward to continuing to partner with them to deliver safe production at Hemlo.”

View full ASX announcement

Award of Spartan Resources contract and contract extensions totalling A$160M

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Perenti is pleased to announce that Barminco has been awarded a new development contract with Spartan Resources and extensions to four existing projects. The scope of the Spartan Resources contract includes the construction of an underground exploration drill drive at the Dalgaranga Gold Project in the Murchison region of Western Australia. The drive has been designed to run in parallel and adjacent to the mineralised gold zones of Never Never, Pepper, Four Pillars and West Winds, to facilitate underground exploration and subsequently support future production plans.

Construction of the drive is due to start in the current quarter and is expected to take 10 months to complete. It will utilise a combination of existing capital equipment and an additional A$5m of new growth capital.

In addition to the Dalgaranga Project, extensions to contracts have also been signed for the following projects:

• Siou and Wona underground at the Mana gold mine for Endeavour Mining in Burkina Faso.

• An existing copper and gold underground mining project in Canada.

• Spotted Quoll nickel mine for IGO in Australia.

• Mt Colin copper mine for Aeris Resources in Australia.

In combination, these projects are expected to contribute approximately A$160 million of revenue to FY25. The project extensions do not require new growth capital.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said, “The greenfield underground at Dalgaranga project is an exciting opportunity. The resource has the potential to grow into a high-grade gold mine and we look forward to supporting Spartan Resources to achieve their targets during the months ahead.

“In addition, the four contract extensions are another example of the 90%+ success rate the Contract Mining division has in extending and renewing contracts. Maintaining client relationships is critical to our long-term success, so we always strive to find ways to deliver value to our clients when possible.”

Gabrielle Iwanow, President of Contract Mining at Perenti said, “We are pleased to be working with Spartan Resources on the new underground Dalgaranga Gold Project in Western Australia. Barminco has a long history of working with Western Australian gold producers and we look forward to building an excellent relationship with their team as they advance towards production.”

Barminco and MMG agree continuation of mining contract at Khoemacau Copper Mine

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We are pleased to announce that our underground mining business, Barminco, has finalised discussions regarding the existing 5-year mining services contract for the Khoemacau Copper Mine in Botswana with Khoemacau Copper Mining Proprietary Limited, a subsidiary of MMG Limited.

Khoemacau is one of the highest quality copper mines globally, with a strong case for expansion to meet growing global copper demand. Barminco has been operating at Khoemacau since the mine commenced in 2019.

Barminco is working to deliver on the current mine plan whilst MMG explores potential expansion opportunities at Khoemacau. Botswana is considered one of the most attractive mining jurisdictions in Africa and is rated investment grade by both Moody’s and S&P Global.

The contract details include:

  • Contract value:                    The remaining contract value is circa AUD$240 million.
  • Contract term:                     Continuation of existing contract, on revised terms, until 30 June 2025.
  • Services:                               Underground development, production, and mining support services.
  • Capital requirement:          Capital expenditure within existing Budget.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said “We are pleased to continue working at Khoemacau. The expansion under consideration has the potential to supply increasing global demand for copper and we are proud to be working with MMG as they assess various future opportunities.”

Gabrielle Iwanow, President of Contract Mining at Perenti said “The continuation of this contract enables the Barminco team to continue working at Khoemacau under revised terms. The region surrounding the operations includes multiple resources beyond the current scope. Cumulatively, these resources have potential to support much higher production and maintain many years of mine life. We look forward to working with MMG to continue high quality operations at Khoemacau.”

View ASX Announcement

Record first half results supported by value accretive DDH1 acquisition.

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Perenti has delivered a record operational and financial performance for 1H24 building on its record FY23 financial results and continuing the positive momentum generated in the business over the past two years. The results reflect the continued disciplined implementation of our 2025 Strategy and the efforts of our 11,000 people.

Mark Norwell, Managing Director & CEO of Perenti, said: “With the completion of the transformative acquisition of DDH1, Perenti is pleased to have welcomed the committed and highly capable DDH1 employees into the wider Group. Since 6 October 2023, integration activities are progressing extremely well, with strong cultural alignment, which has already established a sense of camaraderie within the newly created Drilling Services Division.

“We are pleased with the consolidated operational and financial performance that was delivered during 1H24. One of the many benefits of our globally diversified business is that the overall performance of the Group is not leveraged to any one project, commodity, jurisdiction or business. We have nearly four decades of experience across a range of our service offerings and are confident that the fundamentals of our business are robust, with the acquisition of DDH1 complete and with cash generation an ongoing strategic priority.

“The ongoing performance of our business is a credit to our 11,000 people across the organisation. The safety and wellbeing of our people remains our number one focus of our sustainability priorities as announced in 2023.”

You can read more about our half year results for financial year 2024 on our Investor Centre

Perenti secures A$420 million of contract extensions

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Perenti has announced its underground mining businesses have been awarded contract extensions valued at ~A$420 million. The contract extensions include:

  • A 12-month ~$125 million contract extension to continue underground development and production works at the Gold Fields Agnew underground gold mine.
  • A 12-month ~A$180 million contract extension at the AngloGold Ashanti plc’s Obuasi underground gold mine in Ghana.
  • A 2-year ~A$115 million, contract extension of existing underground development and production works at the Roxgold Inc. Yaramoko underground gold mine in Burkina Faso. Importantly, under the terms of the contract, no new growth capital is required for the execution of this contract extension.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said, “We pride ourselves on our enduring relationships, so we are especially pleased to be continuing our relationship with these long-term clients. Our Contract Mining division is now led by Gabrielle Iwanow and will continue to focus on safely delivering for our clients and on our strategic objectives. I look forward to providing an update on the business, including the excellent progress we have made on the integration of DDH1, as part of our 1H23 results which will be released to the market in February.”

Gabrielle Iwanow, President Contract Mining said, “In my first few weeks at Perenti, I have been very impressed with the team’s technical capability and the operational performance that they deliver to our clients. I believe that it is these factors that underpin the strength and depth of our relationships.

“With these contract awards combined with those previously announced, namely ~A$360 million related to the Sandfire Resources A4 project in Botswana and a further A$111 million related to three Australian surface and underground contract awards, the team has secured nearly A$900 million of revenue for the business.

“I am very proud to be leading and supporting the Contract Mining team as we collectively work towards delivering our 2025 strategic objectives.”

Changes to the Perenti Group Executive Committee

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Perenti is pleased to announce the following changes to our Group Executive Committee.  

Gabrielle Iwanow has been appointed President of Perenti’s Contract Mining Division. Gabrielle is one of Australia’s leading mining executives with extensive experience working at senior operational and executive levels within the resources sector.

Gabrielle was also named as one of the Top-100 Global Inspirational Women in Mining in 2020. Her career includes significant time in senior management positions at ASX 100 listed mining companies OZ Minerals and Rio Tinto, and most recently she was the Managing Director & Chief Executive Officer of Mincor Resources.

Paul Muller, currently President Contract Mining, will be taking up a new role within the Perenti Group Executive Committee, following a short period of study leave between January and May 2024.

Mark Norwell, Perenti Managing Director & Chief Executive Officer, said, “A key strategic focus for the Group is managing and developing our senior talent across the organisation, ensuring we have robust succession plans in place and continue building capability and capacity within our senior leader cohort, including within the Group Executive Committee.

“Gabrielle’s addition to our Group Executive Committee provides the business with additional depth in talent as we continue to build on our record FY23 financial results, transformative acquisition of DDH1, ongoing execution of our 2025 strategy and development of our 2030 strategy.

“I would like to welcome Gabrielle to Perenti and thank Paul for his ongoing contribution to Perenti. This is an exciting time for the business as we continue to deliver on our purpose of creating enduring value and certainty for our clients, investors, our people and the communities in which we operate.”

Perenti and DDH1 – Implementation of Scheme of Arrangement

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Perenti is pleased to announce that the DDH1 Limited scheme of arrangement has been implemented today and Perenti has now acquired 100% of the issued share capital of DDH1.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti, said Perenti is pleased to welcome the DDH1 team members who are joining the Perenti Group today and looks forward to working together to continue to deliver value and certainty for all our stakeholders.

“The acquisition of DDH1 is a very important milestone in the continued growth and evolution of Perenti, and we are very pleased to welcome the circa 2,000 DDH1 employees, their four highly respected brands of DDH1 Drilling, Strike Drilling, Ranger Drilling and Swick Mining Services along with their expansive client base into the wider Perenti Group. DDH1 leverages and builds on nearly 40 years of drilling expertise that our Ausdrill brand holds, enabling Perenti to establish a stand-alone Drilling Services Division of significant scale and global relevance. Perenti is now one of the largest drilling services contractors globally offering a complete range of underground and surface drilling services, including specialisation in deep directional drilling.

“With the completion of the acquisition, we look forward to demonstrating the significant value proposition that the combination of Perenti and DDH1 can offer to all our stakeholders.

For more information about the completion of the transaction visit our Investor Centre.

Perenti increases work in hand

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Perenti has secured the following new work and contract extensions:

• $70 million, six-month contract for the continuation of underground development and production works at the Regis Resources Garden Well and Rosemont underground gold mines. Barminco and Regis continue to progress collaboratively towards further and material contract extensions at these two mines.

• $27 million, 24-month contract for exploration surface drilling services at the BHP Mitsubishi Alliance in Queensland.

• $14 million, 24-month contract award for underground diamond drilling works at Catalyst Metal’s Plutonic underground gold mine in Western Australia, subject to finalisation of contract terms.

Furthermore, AUMS (through UMA, a joint venture with Rocksure International) received a Limited Notice to Proceed related to the initial underground development works at the Newmont Akyem underground gold mine located in Ghana. The finalisation of contractual negotiations continues, however, once finalised it is forecast that the contract could represent ~A$32 million (US$21 million) of revenue over an initial term of 11 months, with a capital structure that is likely to be similar to that adopted for Newmont’s Subika project.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti, said “The award of these contracts and the Limited Notice to Proceed across both our underground and surface mining businesses demonstrates the diversity of our service offering and the strength of the relationships we share with our clients. Collectively these three contracts and the Limited Notice to Proceed represent nearly A$150 million of revenue across FY2024 and into FY2025 and come after the recent announcement in which Perenti secured ~A$360 million of revenue at the Sandfire Resources A4 project in Botswana.”

Perenti awarded US$235 million contract expansion at Motheo

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Perenti is pleased to announce our surface mining business in Africa, African Mining Services (AMS), has been awarded the contract for open pit mining services at the Sandfire Resources A4 open pit within the larger Motheo Copper Mine in Ghanzi, Botswana. The contract is valued at US$235 million (~A$360 million) over a term of 73 months.

Under the terms of the contract, AMS will deliver all surface mining services associated with development and production activities at the A4 open pit. The A4 open pit is located approximately 8km to the west of the Sandfire’s existing T3 Open Pit, where AMS has successfully progressed from development into production works. Perenti anticipates A4 pre-production and development work to commence in September 2023, with pre-strip mining to start in October 2023.

The T3 and A4 open pits are expected to be operated as a larger, integrated mining operation and therefore will leverage the resulting benefits of scale and the operational synergies to optimise the return on capital aligned with our financial targets. The primary synergies include the optimisation of existing infrastructure, mining equipment, maintenance facilities and both technical and operational management. Perenti’s current FY24 guidance (as released to the ASX on 22 August 2023) already takes these operational synergies and capital efficiencies into account and includes the respective A4 revenue and earnings, although as with every opportunity we will be looking to generate further value for our client and shareholders.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti said: “We are excited about the opportunity to expand our partnership with Sandfire Resources. Motheo is a long-life asset in the Kalahari Copper belt, and the expansion of our role here is in keeping with our strategy of disciplined growth within top-tier mining jurisdictions with high quality partners. Sandfire is now one of our largest clients and over the term of the combined contracts, the T3 and A4 open pits are expected to generate total revenue of over A$1.1 billion, delivering strong returns for Perenti and its shareholders.”

Paul Muller, President of Contract Mining said: “Since Barminco commenced operations in 2019 and AMS later in 2021, Perenti has established itself as the leading international mining contractor in the Kalahari Copper belt. With the award of our third mine in the region, we look forward to playing our part in Sandfire’s expansion of their world class Motheo Copper Mine. Beyond this, I am proud of the contribution Barminco, AMS and Perenti continue to make to the development of Botswana’s mining industry and the community more broadly.”

Perenti delivers record financial performance in FY23

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Perenti has delivered record FY23 financial results, headlined by record revenue and record underlying earnings. The sustained improvement in financial and operational performance has placed Perenti in a strong financial position, which enabled the announcement in June 2023 of the value accretive acquisition of Australian-based drilling business DDH1, with final completion expected in October 2023.

Mark Norwell, Managing Director & CEO of Perenti, said: “Perenti continues to go from strength to strength, as the foundations we have laid with our 2025 Strategy allow us to deliver excellent operational performance, strong client relationships and disciplined commercial and capital management.

“Year-on-year we delivered significant revenue and earnings improvement as our growth projects continued to progress through their respective ramp-up phases, as our strategy enabled each of our businesses to capitalise on and take full advantage of the improvement to macro-economic conditions, including the ‘end of COVID’ and as we saw continued strength in markets for the metals and minerals we mine on behalf of our clients. Although I would note that various macro-economic challenges still exist, however we are cautiously optimistic.

“Our ~9,000 people have again demonstrated their commitment to continually doing better, every day, for our clients. On behalf of the Board and Group Executive I sincerely thank them for their contribution to the business.

“Perenti is focused on supporting sustainable mining, with our investment in developing mines for the future, and our focus on reducing our own emissions.

“Perenti has a strong track record of delivering value and certainty for all of its stakeholders. As we look to the future, our proposed acquisition of DDH1 will complement and enhance the Perenti business and further cement our diversified global value proposition.”

You can read more about Perenti’s FY23 Annual Results on our Investor Centre.

Perenti and DDH1 – Continued creation of enduring value 

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Perenti has announced that it has entered into an agreement under which it will acquire 100% of the issued share capital of DDH1 Limited subject to satisfaction of conditions.  

DDH1 brings significant capability across a range of specialised surface and underground drilling services that complement Perenti’s existing service offering.

Perenti will benefit from increased scale, and the ability to leverage the operational and financial strengths of both companies. This will enable improved margins and increased free cash flow, which will accelerate the delivery of our FY25 financial targets.

Following the completion of the transaction, which is subject to DDH1 shareholder approval and other conditions, Perenti will become one of the largest drilling services companies globally, increasing growth opportunities for the business and our people.  

Mark Norwell, Managing Director & CEO of Perenti said: “This is a compelling transaction that represents an exciting next step in delivering on Perenti’s purpose, to create enduring value and certainty, by building a portfolio of complementary high quality businesses.  

“Perenti has a long history in drilling from its Ausdrill heritage and Barminco Diamond Drilling business and understands the attractiveness of the market.  

“The long term outlook for a sustained production cycle needs increased drilling spend to ensure mining reserves are not diminished, and drilling is becoming more complex, resulting in larger programs and demand for specialist services.  

“DDH1 is a highly respected tier 1 global operator, with significant capabilities across a complete range of specialised surface and underground drilling services, that are complementary to our existing clients and service offering.  

“We have a clearly articulated framework against which we assess all investment opportunities, with this transaction addressing our key assessment criteria in relation to strategic attractiveness, fit within Perenti and value creation potential.” 

Following the Transaction, the DDH1 business will form part of a newly created Drilling Services Division, which will also comprise Perenti’s existing Ausdrill business. Sy Van Dyk (current Managing Director & CEO of DDH1), will be appointed as President of the newly created division. Each of the four existing DDH1 brands, DDH1 Drilling, Ranger Drilling, Strike Drilling and Swick Mining Services, will be maintained and led by their existing leadership teams, with a focus on providing a consistent offering and customer continuity. 

Rob Cole, Chair of Perenti said “We look forward to welcoming the DDH1 team to Perenti and working together to deliver on the significant value upside that will be delivered from this Transaction. Sy and the DDH1 management team are highly experienced executives leading a globally respected operator, which will continue as part of our newly established Drilling Services Division. We also look forward to working with our new colleagues Diane and Andrea who bring significant skills and experience to the Perenti Board, with Mark Hine announcing his intention to retire from the Perenti Board. On behalf of the Perenti Board, I would like to thank Mark for his enormous contribution to Perenti over the years, spanning major strategic shifts in the business from the combination of Ausdrill and Barminco, up until the Transaction being announced today.” 

For more information visit our Investor Centre. 

IGO awards Cosmos electrification study to Perenti and ABB collaboration

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Perenti and ABB, in collaboration, have been awarded an inaugural contract by IGO Ltd to undertake a study for the full underground electrification of IGO’s Cosmos Nickel Project.

The electrification study is a significant step in IGO’s commitment to continuously improving its sustainability performance by trialling new technologies and decarbonising its operations, helping to create a green energy future.  

Perenti-website-IGOs-Cosmos-Project-bird-eye-view
Bird-eye view of IGO’s Cosmos Nickel Project in Western Australia

In November 2022, Perenti signed a Memorandum of Understanding (MoU) with global technology company ABB to collaborate to develop a service offering that combines Perenti’s mining expertise and technical capability with ABB’s electrical and technological expertise. 

The study will see experts from Perenti and ABB work side by side with IGO to provide a pathway for the optimum design of mine electrification at Cosmos. All aspects of electrification will be considered in the study.  

“Valuing the environment and enabling the energy transition is one of Perenti’s three key sustainability imperatives and this study demonstrates the capabilities of our electrification collaboration with ABB,” said Raj Ratneser, Executive Sponsor of Decarbonisation at Perenti. “Decarbonisation and electrification are critical to the future of mining, and we are privileged to be working with our client IGO on this pioneering study.” For more information visit our Investor Centre.

Perenti Strategy Briefing and Business Update June 2023

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Perenti has provided an update on progress against our 2025 Strategy including a positive business update, the release of sustainability imperatives and priorities, an update to our 2025 targets and an updated Capital Management Policy.

Positive Business Outlook

As announced 21 February 2023, Perenti expected FY23 revenue of $2.8 billion to $2.9 billion, EBIT(A) of between $250 million and $265 million, leverage to be ~1.0x and capital expenditure is expected to be at $330 million. Perenti now expects FY23 revenue of $2.9 billion, EBIT(A) of between $260 million and $265 million, leverage of ~1.0x and capital expenditure of ~$290 million.

FY24 guidance will be delivered with the release of our FY23 financial and operational results in August 2023, however qualitative FY24 targets include:

• FY24 revenue will be in-line with FY23;

• FY24 EBIT(A) growth on FY23 EBIT(A);

• FY24 capital expenditure slightly higher than FY23;

• FY24 free cash flows will be stronger than FY23;

• FY24 leverage will be <1.0

Furthermore, Perenti has updated its FY25 revenue target from $2.5 billion up to $3.0 billion. All other FY25 targets remain unchanged.

Sustainability and Capital Management

Sustainability is fundamentally linked to everything that we do, and we recognise that in order to deliver on our safety and sustainability objectives and support further growth initiatives beyond our current service offerings, that an appropriate allocation of capital, above and beyond stay in business capital is required.

This capital commitment is aligned with our Purpose and is focused on ensuring Perenti is a sustainable business and supports industry and societal initiatives focused on sustainability.

The updated Capital Management Policy now formally allocates between 10% and 20% of free cash (free cash flows after sustaining capital, interest and taxes but before growth capital) generated by the business towards future focused strategic investments including to support progress on the delivery against our sustainability imperatives and new value creation initiatives.

Perenti anticipates that these opportunities will primarily see investment in:

• Technology and engineering solutions to more effectively mitigate and manage risks inherent in underground mining;

• Development of new services to support decarbonisation; and

• idoba product development.

Mark Norwell, Chief Executive Officer & Managing Director of Perenti said, “This time last year, we updated our 2025 Strategy and since then, our global workforce comprising 9,000 highly talented, motivated, resilient and determined people have continued to execute on our strategic objectives and in many cases have outperformed expectations. With the end of FY23 only weeks away, we expect the positive momentum built up in FY23 to continue and are targeting for FY24 will be a third consecutive year of earnings growth, margin expansion and a strengthening balance sheet.

“In addition, an important component of our 2025 Strategy update last year was the introduction of our focus to embedding sustainability in everything we do. Today, we are taking this commitment a step further by outlining our sustainability imperatives and priorities. We view these as strategic enablers and a key differentiator for our business that will guide the work we do, underpin the future value that we expect to generate and shape the company we become.”

Perenti secures a new five year contract with Newmont at the Subika underground mine

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Perenti is pleased to announce that through its UMA joint venture, its subsidiary African Underground Mining Services (AUMS) has been awarded a new, 60-month contract at the Newmont Subika underground gold mine in Ghana. The contract is effective from 1 January 2023.

UMA is a joint venture between Perenti’s subsidiary, AUMS and Rocksure International, a local Ghanaian civil and mining contractor. Under the terms of the contract, through the UMA joint venture, Perenti will undertake all underground development and production activities, diamond drilling and associated support services at the Subika Underground Mine, located approximately 310 kms to the northwest of Accra, Ghana.

AUMS commenced development and production activities at the Subika underground mine in mid-2017 and the new contract will reduce the capital intensity of the project for Perenti while still delivering strong returns.

Mark Norwell, Managing Director and CEO of Perenti said, “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. We are very pleased that we will continue to deliver value and certainty to Newmont and our other stakeholders in Ghana and beyond.”

Paul Muller, President Contract Mining of Perenti said, “Ausdrill commenced operations in Ghana in 1991 and with this 60-month contract, Perenti through its subsidiaries, will have accumulated nearly 40 years of in-country expertise with a strong track record of prioritising local procurement, training and employment opportunities across a wide range of local and regional Ghanaian stakeholders.”

You can view the full ASX release here:

Perenti secures contract extension at Red Chris in Canada

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Perenti subsidiary Barminco has been awarded a 12-month contract extension at Newcrest Mining’s Red Chris mine in British Columbia, Canada.

Since June 2021, Barminco has continued to progress the development of an underground exploration decline, an essential first stage of works that will provide a platform for future underground exploration activities, and which may also be used to support access to potential block cave workings. This contract extension enables Barminco to continue underground development works and is expected to deliver approximately A$90 million of revenue over the 12-month contract term. 

Mark Norwell, Managing Director & CEO of Perenti said, “Our strategy in North America is to partner with tier-one operators and long-life assets, where we can add value over the long term. We continue to diligently progress our North American growth strategy and have key executive management personnel based in the region to ensure we develop the right relationships and become engrained within the sector while remaining disciplined in the execution of our strategy.”

Paul Muller, President of Contract Mining said, “Since mid-2021 our team in North America has worked closely with the Red Chris JV as it transforms the mine into a long life, tier-one underground operation. We have developed very strong relationships with the local communities including a partnership with the Tahltan Nation Development Corporation and are very pleased to be on site at Red Chris for at least the next 12 months.”