The company has signed a three-year deal with a copper miner. Here are the details.
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The Damstra Holdings Ltd (ASX: DTC) share price is edging higher today after the company announced a deal worth $900,000 with a Canadian-listed copper miner.
The workplace management solutions company said its subsidiary, Damstra Technology, had secured a three-year contract with Pinot Valley Mining Corp. Pinot Valley, which is in Arizona, is owned by Capstone Copper Corp (TSE: CS).
The Damstra share price is currently up 1.25% 8.1 cents.
For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.3% at the time of writing.
Strategic value helps Damstra share price
The contract with Capstone — which has its headquarters in Canada — is estimated to be worth at least circa US$615,000 ($892,000).
Capstone will implement Damstraâs Enterprise Protection Platform (EPP) through five modules — workforce and contractor management, security, health and safety, training, and compliance and incident management.
While the total value of the contract is not considered to be material, management pointed out the strategic importance of the win.
Worth more than the monetary value
In the first instance, the ASX tech minnow is pleased that it is replacing an international competitor. Management noted the deal âhelps validate the competitiveness of Damstraâs EPP on an international scaleâ.
Secondly, there could be an opportunity for Damstra to roll out its solution across more mine sites operated by Capstone.
Damstraâs chief executive Christian Damstra said:
What is exciting about Capstone is that it helps validate our EPP product positioning and strategy where we can offer to clients one module or, as in the case of Capstone, five modules, under the EPP where all the modules work in an integrated fashion.
How is the Damstra share price performing?
The contract win comes as the Damstra share price has shed 90% of its value over the past year. The brutal sell-off in ASX tech shares has hit smaller-cap companies harder.
Rising interest rates have forced investors to dump growth shares, and small-cap ASX tech shares are a near-perfect descriptor of this category. This explains why three-quarters of ASX tech shares have fallen by 20% or more in the past year.
Only two others have performed worse than the Damstra share price in the last 12 months — the colorTV Ltd (ASX: CTV) share price and the 3D Metalforge Ltd (ASX: 3MF) share price. Both have shed around 92% of their value.
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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Damstra Holdings Ltd. The Motley Fool Australia has recommended Damstra Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.