Sunkar Resources continues to climb

Sunkar Resources rose again after announcing its subsidiary, Temir Service, had signed an earth moving contract for a new railway line in Western Kazakhstan.

Sunkar Resources rose again after announcing its subsidiary, Temir Service, had signed an earth moving contract for a new railway line in Western Kazakhstan.

The contract is worth KZT1.2bn - around $8.1m - and the company expects to receive a prepayment of 30% of the total contract value before the end of this year.

The work is scheduled to be completed during the second quarter of 2013 and the company expects the revenue to make a significant contribution to the working capital of the company.

It also hopeful the deal will mean it can retain core qualified personnel for next year's mining season.

"As further work is anticipated on the construction of this new railway line, we hope to increase the volume of work and extend the term of this earth moving contract and we will update the market as to any developments in this respect at the appropriate time," said Chief Executive Officer Serikjan Utegen.

In September's interim report Sunkar said it was pursuing an earth moving contract for its idle equipment to generate additional cashflow from its existing asset base.

The firm said work on the railway project was a natural fit due to the flat and shallow geological structure of the company's phosphate deposits.

Temir used earth moving equipment and mining techniques similar to those used in laying foundation for major railroads and major highways in flat terrain, it said.

Sunkar's shares were up 6.5% by 1200 on Wednesday, and have risen 39% over the last week.

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