AML3D Ltd (ASX: AL3) shares are having a strong session on Thursday.
In morning trade, the ASX defence stock is up 20% to 20.5 cents.
Why is this ASX defence stock jumping?
Investors have been buying the additive manufacturing company's shares following the release of an announcement before the market open.
According to the release, the ASX defence stock has received an order for high demand, non-safety critical replacement components used in US Navy submarines.
The release notes that AML3D plans to leverage its proprietary ARCEMY technology to 3D metal print five of the high demand components, which are no longer available from the original manufacturer.
The order has been signed with BlueForge Alliance, which is a US nonprofit, neutral integrator, supporting the strengthening and sustainment of the US Navy's Submarine Industrial Base.
What is it worth?
The ASX defence stock advised that this US Navy submarine components contract is valued at ~A$2.61 million (US$1.84 million). This is payable up front and upon meeting contract milestones.
Management notes that the contract follows successful hydrostatic testing by the US Navy of ARCEMY 3D metal printed components.
Uniquely positioned
The company believes this deal highlights that it is uniquely positioned to address supply chain constraints across the US Navy's Maritime Industrial Base.
It highlights that its WAM technology produces high quality, complex components that match and exceed those supplied by traditional manufacturers with a significant reduction in lead times.
Commenting on the contract, the ASX defence stock's CEO, Sean Ebert said:
Signing this order is a significant milestone for AML3D. It shows our advanced manufacturing technology is key to solving a wide range of critical supply chain challenges for the US Navy's submarine program. This latest contract pertains to complex components that are no longer supported by the original manufacturer and could not be sourced in a time and cost-effective manner from the Navy's traditional supplier base.
AML3D's advanced industrial 3D metal printing technology is increasingly being embedded in the US Navy's Maritime Industrial Base. This contract allows us to continue to build and deepen our longterm, strategic partnership with the US Navy and supports our investment to double capacity at our US Technology Center in Ohio. Our US Scale-up strategy continues to deliver significant growth and value to AML3D and its shareholders. While the latter strategy is being successfully delivered, we at the same time continue to progress our plans to enter into the UK market and other globally significant markets across Europe.
The post Guess which ASX defence stock is jumping 20% on US Navy contract appeared first on The Motley Fool Australia.
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