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Forge up again on Roy Hill contract
The West Australian

UPDATE 1.20pm: Shares in Forge Group have soared higher again after the contractor confirmed a $1.47 billion job for Samsung C&T at the Roy Hill iron ore project in the Pilbara.

This morning, Forge shares nearly doubled to an intraday high of $1.96 before settling back to close up 56 cents, or 54.63 per cent, at $1.585. More than 41 million shares worth $60 million changed hands for the day.

Forge responded to an ASX share price query, its second in as many trading days, by referring to its announcement earlier today that Samsung had given the go ahead for phase three engineering, procurement and construction works for Roy Hill's processing facility.

Forge will work on the job in a joint venture with Spanish contractor Duro Felguera.

The value of the contract to Forge will be about $830 million.

Forge first flagged the contract on September 2.

Forge's managing director and chief executive David Simpson said the contract would underpin the company's order book for the remainder of 2014 and into 2015.

"It is also encouraging to note that the Roy Hill project is progressing to schedule and that we have now commenced mobilisation to site," he said.

Forge shares were pummelled last month after the company flagged big losses and writedowns on two power station contracts, posing an acute cashflow crisis.

ANZ Bank stepped in with a deal to rescue the engineering company from possible insolvency.

Shares in Forge sunk to a low of 28.5 cents on the news but made a strong recovery last week to breach $1 on Friday.

Forge responded to an ASX share price query on Friday, saying it was not withholding any information from the market that might explain the sudden upswing in its share price.

WestBusiness reported on Saturday the strong rally may have been prompted by takeover speculation.