News: Forge Group's Roy Hill contract to get roll, page-44

re: News: Forge Group's Roy Hill contract to ... Forge Group shares surge again on Roy Hill go-ahead

DateDecember 30, 2013 - 11:57AM 7 reading now

Forge Group shares have risen for the fifth day in a row after the company revealed it has been given the go-ahead to complete a contract at the Roy Hill mine that is critical to its future earnings.

The embattled resources engineering contractor on Monday released an announcement to the ASX confirming its client Samsung C&T has provided formal notification to proceed with phase three works for the procurement and construction of an processing facility at the Roy Hill iron ore mining project, near Newman Western Australian.

At 11.31 am the stock was trading 65 per cent higher at $1.695, but by 11.42am had come back to be 33 per cent higher at $1.36.

On Friday, in a response to a price query from the ASX, the company said it knew of no reason why its shares had jumped 25.4 per cent during Tuesday’s session – aside from its December 17 announcement in relation to the awarding of $40 million worth of contracts in North America.

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Forge Group lost more than 80 per cent of its market value in a spectacular one day price crash in November after it emerged from a three-week trading halt to reveal $127 million worth of write-downs on two power plant projects.

Samsung awarded the $1.47 billion contract for the Roy Hill processing plant and associated infrastructure to a joint venture between Forge Group and Spanish firm Duro Felguera on September 2.

The $1.47 billion contract is worth approximately $830 million to Forge Group. Construction is due to be completed in September 2015.

At the time the contract was awarded Argonaut Securities analyst Ian Christie noted the $830 million contract bought the company’s total order book to $2.1 billion.

Forge Group managing director David Simpson described getting the go ahead for phase three of the contract as “a pleasing development for Forge Group” that “underpins” its order book for the remainder of financial year 2014 and in to 2015


Read more: http://www.smh.com.au/business/mining-and-resources/forge-group-shares-surge-again-on-roy-hill-goahead-20131230-302ek.html#ixzz2ouqgB0mA