North American Construction Group Ltd.’s (NOA Quick QuoteNOA - Free Report) Australian operations subsidiary, MacKellar Group, has been selected by a major copper producer in the Australian state of New South Wales for a new contract.

Operational at a long-life copper mine, MacKellar’s early works and development contract involves a variety of production-related activities related to mining. The contract will mainly focus on the establishment of site infrastructure in a new mining area, initial overburden removal and the closure of a previously used reclamation facility. Moreover, the majority of the heavy and light equipment fleet required for the various work scopes will be procured from Canada.

The work related to the project is expected to be initiated in the first quarter of 2025 and close by the second quarter of 2026. North American Construction believes that this new customer in Australia will support it in moving forward with its strategic objective of customer, commodity and geographic diversification.

Joint Ventures & Acquisitions – NOA’s Growth Drivers

North American Construction focuses on corporate strategies, which ensure profitable growth and diversification. The primary strategies include indulging in joint ventures (JVs), especially First Nation alliances and accretive acquisitions. The company is committed to the early involvement as well as the collaborative participation of First Nations communities, thus sparking successful partnerships, which help to deliver high-value construction and mining services.

Regarding acquisitions, in October 2023, the company acquired MacKellar Group for a total expected consideration of $395 million. NOA’s third-quarter 2024 EBITDA was up 75% year over year driven by this acquisition.

Considering the JVs, North American Construction benefits immensely from its two largest alliances, Nuna Logistics and Mikisew Group of Companies. In November 2018, the company acquired a 49% ownership interest in Nuna Logistics, which offered it access to broader equipment fleet, experienced field personnel and expanded services such as growing its external maintenance offering. Also, during the same time, it formed a partnership with the Mikisew Group of Companies to deliver construction and mining services to oilsands customers.

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Shares of this heavy equipment and mining contractor have gained 5.8% in the past month against the Zacks Building Products - Heavy Construction industry’s 3.9% decline. It is expected to continue benefiting from the growing demand for equipment and services in Australia.

NOA’s Zacks Rank & Key Picks

North American Construction currently carries a Zacks Rank #3 (Hold).

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