Brierty surges on big Rio job
UPDATE 2.20pm: Shares in Brierty surged higher today after the company more than doubled its order book by snaring a $300 million Rio Tinto contract.
Brierty shares closed up 4.5 cents, or 12.68 per cent, at 40 cents after touching an earlier high of 44 cents.
The 4½ years of mining and civil work at Rio's Western Turner Syncline iron ore mine expansion in the Pilbara is Brierty's biggest job to date.
The small-cap contractor is believed to have outbid bigger rival NRW Holdings for the Rio job at a time when new mining contracts are rare.
NRW had built and operated the WTS mine since 2010 in a joint venture with traditional landholder group Eastern Guruma.
Brierty has struck a deal to work on the project with Eastern Guruma and two other indigenous partners. Rio in February committed itself to a 7 million tonne-a-year expansion of WTS, near Tom Price.
"All the mining companies at the moment will probably award for the cheapest price as long as that person can demonstrate and deliver on the things that are important," Brierty managing director Peter McBain said.
"What was important to Rio, we felt, was having the capacity to increase production."
Brierty's contract provides greater certainty of medium-term revenue for the small-cap contractor as it finishes up at the Karara iron ore project.
The contract announcement was made after the market closed yesterday.
"One of the things that's probably held the share price back is perhaps the lack of visibility in the order book," Mr McBain said.
"We've never had a better order book than this now."
