GR Engineering Services Ltd (GNG:ASX) has been appointed preferred tenderer by Capricorn Metals Limited (CMM:ASX) in relation to its Karlawinda Gold Project.
Karlawinda is near Newman in Western Australia.
The scope of works includes the design and construction of a 3-million tonnes per annum carbon-in-leach mineral processing plant and associated infrastructure.
Large contract relative to annual revenues
GR Engineering generated annual revenues of $238 million in fiscal 2017.
The value of this contract is $93.1 million, indicating it is a material development for the group.
Capricorn is targeting commencement of site-based activities in the September quarter of 2018, indicating that revenues should be realised in fiscal 2019
GR Engineering managing director Geoff Jones said: “Our clients are increasingly seeking certainty and a track record of performance.
“GR Engineering has been able to demonstrate this to Capricorn, including by reference to its recent successful project outcomes in the turnkey design and construction of mineral processing plants in the Western Australian gold sector.”
Continuation of contract awards
In mid-2017, GR Engineering was successful in winning a number of sizeable contracts with high profile players in the mining industry.
These included AngloGold Ashanti (ASX:AGG), Dacian Gold Ltd (ASX:DCN) and Western Areas Ltd (ASX:WSA).
The value of these contracts alone exceeded $200 million.
The company has been trading in the vicinity of $1.40, a substantial discount to the 12-month consensus price target of $1.83.