It's been a disappointing day so far for the Maca Ltd (ASX: MLD) share price. This comes after the company provided investors with an update into the current contract at the Karara Magnetite project.
During mid-morning trade, the mining and civil construction company's shares are down 5.92% to 79.5 cents.
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What happened to Maca?
Shareholders are heading for the hills, selling Maca after following the latest unfortunate news from the company.
In a statement to the ASX, Maca advised it has not been selected as the preferred candidate for the mining services contract at Karara.
This brings the end to Maca's current contract with Karara which is till March 2022. NRW Holdings Limited (ASX: NWH) announced earlier this morning, it has been awarded with a Letter of Intent (LOI) for the Karara Iron Ore mine.
Maca stated that its $175 million acquisition of the Downer EDI Limited (ASX: DOW) Mining West business led to it previously novating the Karara contract. Pleasingly, the current performance on the contract has been in line with Maca's projections and is expected to continue.
The company noted that revenue and earnings remain broadly in line with market estimates for FY 2022. In addition, Maca will seek other revenue generating opportunities to fill the gap in FY 2023 and beyond.
Maca CEO and managing director, Mike Sutton commented:
Maca maintains a positive relationship with Karara Mining, and will continue to focus on delivering a quality service until the expiry of the current contract. Maca is pleased to have been involved in the Karara Magnetite project through the Mining West business, and thanks our client Karara Mining and our dedicated workforce, who will all be offered positions on other Maca sites at the expiry of the contract. Maca remains well positioned to replace the contract with one of the many material opportunities in the sector.
Maca share price snapshot
Since the start of 2021, Maca shares have continued their downward trend, falling 35% in value. The company's share price is sitting at the lower end of its 52-week range of 76 cents to $1.515.
On valuation grounds, Maca commands a market capitalisation of roughly $269 million, with approximately 341 million shares outstanding.
