Primero bolstered by contract win at South Flank

Contract engineering company Primero has secured a contract at BHP’s South Flank iron ore project in the Pilbara, Western Australia.

The contract is for engineering, procurement and construction (EPC) works on South Flank’s fuel facilities.

It is a sub-contract to an existing South Flank brownfields expansion contract that was awarded to Clough in May 2018.

The South Flank award joins a number of contract wins for Primero (formed in 2011 and publicly listed earlier this year) that have helped the company deliver a $130 million revenue forecast for the 2019 financial year, a 52 per cent year-on-year (YoY) jump on 2018.

Primero’s contract wins in the precious metals sectors with companies such as AngloGold Ashanti, Resolute Mining and Independence Group have also driven the company’s performance as it enters its first full financial year as a publicly listed entity.

In the gold sector, Primero is working with Resolute at the Syama project in Mali, West Africa and with AngloGold and Independence Group at their Tropicana joint venture in Western Australia.

The company has also cited its experience in the battery metals sector as a particular source of growth, having secured contracts with lithium producers such as Tawana Resources, Galaxy Resources and Pilbara Minerals, as well as rare earths company Northern Minerals.

“Standout annual revenue growth of more than 500 per cent for our minerals division is directly linked to Primero’s expertise in the battery minerals sector and the increased investment in projects in this commodity group,” Primero managing director Cameron Henry said in August.

Tawana Minerals recently contracted Primero for front end engineering design (FEED) works for stage two of the Bald Hill lithium-tantalum mine in the Eastern Goldfields, Western Australia. The contract is a follow-up to stage one early works carried out by Primero and is worth $35 million.

The $130 million 2019 forecast is a significant rise on the company’s 2018 annual revenue of $85.2 million reported in its 2018 financial results at the end of August, a figure already ahead of previous forecasts laid out in a $25 million initial public offering (IPO) prospectus in June.

Primero’s minerals division was responsible for the majority of the $85.2 million figure, making up 84 per cent of 2018 revenue. Non-process infrastructure and energy made up the remaining 10 per cent and 6 per cent respectively.

The company’s current contracted revenue for the 2019 financial year is $95 million, with a total order book of $120 million overall across minerals, energy and non-process infrastructure.