Rio awards Primero $20m in extra work

Engineering company Primero Group has secured further work with Rio Tinto under $20 million in contract variations, while at the same time maintaining its full-year earnings guidance.

The contract extensions are variations to work already undertaken by Primero Group at Rio’s Koodaideri and Mesa K iron ore projects in the Pilbara.

Osborne Park-based Primero says it is currently progressing both projects.

The variations awarded under the Mesa K contract comprise further civil work at the Mesa J PP2 wet processing facility, currently being developed as part of Rio Tinto’s Robe Valley Sustaining projects.

The Mesa J works are expected to complete this year.

Primero says variations to the Koodaideri comprise ‘options selections’, which have now been confirmed and included for implementation.

The additional works will be completed in line with the original contracted time frame of mid-2021.

Primero said while it had implemented a range of health and safety measures to limit the spread of COVID-19 and meet government requirements, the company continues to operate within its contracted order book guidance of $195 million.

It noted its recently signed contracts with Rio and Fortescue Metals Group, announced earlier this year, were predominantly focused on off-site design engineering and procurement work.

Fortescue had contracted Primero to build a wet iron ore beneficiation plant at the Christmas Creek iron ore mine in the Pilbara.

Primero says planned site activities for these contracts are scheduled to ramp-up during the second half of calendar 2020.

The company will continue to review its FY20 order book guidance, along with $170 million in contracted orders guidance previously provided for FY21.

At the same time, Primero announced the resignation of non-executive director Luke Graham, who has served on the board since Primero’s ASX-listing in 2018.

Mr Graham’s resignation represents growing commitments in his role as managing director of mineral sands developer Strandline Resources, Primero says.

The company plans to add further non-executive directors to the board.

Its shares closed up 3.5 per cent to trade at 14 cents per share.