Forge Group soars on Roy Hill contract

Construction and engineering firm's stock surges nearly 50% after go-ahead for more work at Gina Rinehart's iron ore site.

AAP, with a staff reporter

Shares in engineering and construction company Forge Group Ltd have soared after it got the go-ahead for more work at Gina Rinehart's Roy Hill iron ore mine in Western Australia.

At 1300 AEDT Forge shares were up 47.5 cents, or 46.3 per cent, to $1.50.

The company said it had received formal notification to proceed with phase three of construction of the $1.47 billion processing facility at Roy Hill.

The contract is worth $830 million to Forge, which is carrying out the work in a joint venture with Spanish construction contractor Duro Felguera.

The contract is Forge's largest ever and, said chief executive David Simpson, underpins the company's order book for the remainder of the 2013-14 financial year and into 2015.

"It is also encouraging to note that the Roy Hill project is progressing to schedule and that we have now commenced mobilisation to site," Mr Simpson said.

Before Monday's announcement, Forge shares were already on the rise, gaining 65 per cent in value last week.

Forge deflects ASX share price queries

Forge has responded to its second inquiry from the Australian Securities Exchange in a week, saying it knew of no information influencing fluctuations in its share price and in the volume of shares traded.

In a statement to the ASX, the group said it was not aware of any information not already released to the market that could explain recent trading in its securities, and pointed to its announcement this morning regarding confirmation of the phase three works at Roy Hill.

On December 27 Forge responded to a similar inquiry and referred again to a previous announcement, in that case the $40 million of new Asset Management works in North America it had disclosed on December 17.

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