05:34 PM EDT, 08/28/2024 (MT Newswires) -- North American Construction Group Ltd. ( NOA ) after trade Wednesday announced that the MacKellar Group has been awarded a five-year contract by an existing client, a metallurgical coal producer in the state of Queensland, Australia.

According to a statement, the contract leverages an existing agreement to transition hired fleet currently under contract as dry rental to a fully maintained fleet.

Wednesday's statement noted the five-year contract has an expiry date of September 30, 2029 and qualifies as contractual backlog given minimum hour commitments in the agreement. It said scopes awarded for fully maintained equipment and related services are estimated to result in a total value of approximately $375 million. It also said contract scopes are expected to be fully ramped up by mid-2025. To achieve the increased scope, the statement added, the agreement requires an on-site maintenance facility and 20 additional units, for total growth capital of between $50 and $55 million, which will be purchased and constructed by MacKellar primarily in the fourth quarter of 2024.

Joe Lambert, President and CEO of NACG, said: "This long-term agreement brings our total contractual backlog well above $3.0 billion and provides the consistency needed by operations personnel to function efficiently."

NOA closed Wednesday down $0.07 at $25.58 on the TSX.