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Perenti (ASX:PRN) has confirmed its exposure to copper, at least in Botswana, isn’t proving quite the windfall it had perhaps originally expected.
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“Financial performance at Khoemacau has not met our internal performance hurdles, and we must maintain our commercial discipline to enable consistent returns,” company chief Mark Norwell wrote today.
In other words: :et’s ditch this before our shareholders really try to revolt.
Worth noting is Perenti is not necessarily a mine owner outright but instead a drilling services company – or at least, that’s what’s currently making it the most money.
(According to its HY25 report, Perenti Drilling Services [PDS] was the second-largest global drilling group globally if looking at total metres drilled, according to stats pulled together by Coring Magazine.)
But the company also works in contract mining, and that’s how it was interlinked with the Botswana-based Khoemacau underground copper mine.
In its half yearly, the company made one vague comment around Khoemacau, with Norwell stating the project’s “financial underperformance from Zone Five underground… in Botswana.” Compounding that issue was the closure of three Australian nickel mines in the year leading up to that release.
There was no real indication at the time that the company was so severe on Khoemacau, it was looking at exiting the project altogether, but on Tuesday, that’s what Perenti wrote – that this decision was foreshadowed in its latest half-yearly report.
That remains a matter for investor interpretation. (That said, revenue guidance for FY25 still remains at $4.3B; earnings before tax of $325M.)
But one could consider the company, as of Tuesday, still describes it as “one of the highest quality copper mines globally” on its website.
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At any rate. Through subsid Barminco, Perenti will now pawn off all equipment to existing project partner MMG, which last year put down US$700M to double copper output at Khoemacau.
PRN last traded at $1.33/sh.
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