CIMIC Group’s Thiess Secured A$1.7 Billion contract in Botswana

CIM

Contract miner, CIMIC Group Limited (ASX: CIM) has made an announcement on 18 March 2019 stating that its global mining services provider, Thiess, has secured a A$1.7 Bn contract at Debswana Diamond Company’s Jwaneng Mine Cut 9 project in Botswana.

Thiess has secured this contract through Majwe Mining Joint Venture, a joint venture in between Thiess (70 percent) and long-term local partner Bothakga Burrow Botswana (30 percent). As per the contract, Majwe will provide full scope mining services to Jwaneng Mine Cut 9 project for nine years. The joint venture will be responsible for providing drilling and on-bench services, mine planning, equipment maintenance, load and haul, and mining operations.

It is expected that this new contract will improve Thiess’ presence in Botswana. As per CIMIC Group Chief Executive Officer (CEO), Michael Wright, this new contract will strengthen Thiess’ presence in Botswana, and it builds on the company’s operational and technical teams’ solid performance at Jwaneng since 2011.

He further told that this relationship developed between Majwe joint venture and client Debswana Diamond Company, owned by the Botswana Government and De Beers, is a testament to all involved with the project.

As per CIMIC Group Mining and Minerals Executive and Thiess Managing Director, Douglas Thompson, this contract extends the company’s compliance with Botswana’s Citizen Economic Empowerment Policy and to delivering sustainable mining.

Recently, Theiss also secured a A$172 Mn contract extension from Bayan Resources which will help it to extend its operations at Melak where its team has delivered exceptional technical solutions for almost 10 years.

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Recently on 5 February 2019, the company released its full-year results for FY 2018. The year 2018 was a successful year for CIMIC Group, with strong growth in its profit, revenue and dividends. For FY 2018, the company reported a Net profit after tax of $781 Mn which was 11% higher than the previous corresponding period (pcp). Further, the company reported revenue of $14.7 billion which was 9% higher than pcp. For FY 2018, the company reported strong cash flows from operating activities of $1.9 billion which was 22% higher than pcp. During the year, the company’s free operating cash flow increased by 18% to $1.2 billion as compared to pcp.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $50.310, up by 1.616% during the day’s trade with a market capitalization of ~$16.05 billion as on 18 March 2019 (AEST 1:32 PM). The counter opened the day at $50.050 and reached the day’s high of $50.355 and touched a day’s low of $49.870 with a daily volume of ~ 59,273. The stock has provided a year till date return of 15.76% & also posted returns of -2.13%, 14.45% & -0.60% over the past six months, three & one-months period respectively. It had a 52-week high price of $51.670 and touched 52 weeks low of $39.575, with an average volume of ~287,221.


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