RCR Tomlinson jumps on contracts

The mining services company rebounded after announcing $125 million worth of contracts with major resources companies.

RCR Tomlinson jumped after announcing $125 million worth of new contracts with major mining firms Newcrest (NCM), Glencore and Rio Tinto (RIO).

The mining services company's share price leapt 1.7% into the black to $3.59 – reversing its earlier 1.1% fall – compared to a 0.5% drop from the All Ordinaries at 1350 AEDT.

The Glencore contract, to expand an underground mine in Queensland, was worth $70 million, and is expected to be finished by the second quarter of 2014.

RCR Resources was also successful in extending its specialised underground mine work at Newcrest Mining's Cadia Valley operations in New South Wales, while its mining and equipment business was awarded a contract from Rio Tinto to build an iron ore input crushing and conveying plant in Western Australia, which is expected to be completed in March 2015.

While the $125 million only adds a small portion to the $1.6 billion in revenue the mining services company is expected to make this financial year, it's a big confidence booster and helps justify the stellar 50% surge in the Uncapped 100 company's share price over the past six months.

But RCR isn't the only mining contractor to have posted strong gains. WDS (WDS) and NRW Holdings (NWH) have surged 46% and 24%, respectively, since Eureka Report flagged bargain opportunities in the sector back in August (see A mining services revival?).

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