Drilling contractor Swick plans to establish a deep exploration division within the company that will make use of powerful new deep hole drilling kits.
Swick managing director Kent Swick commented on the news in the company’s September quarter report released today, stating the new rigs will be the most powerful in the Australian market.
“We expect our specialist team with its purpose-built equipment to deliver great outcomes for our clients who in general are requesting more deep exploration holes to be drilled from underground,” he said.
The company reported quarterly revenues of $36.7 million for its drilling business, up 1 per cent year on year (YoY).
However, earnings before interest, tax, depreciation and amortisation (EBITDA) improved to $6.8 million, a YoY increase of 93 per cent.
The company expects to build on these increases in its next quarter due to a recent three-month extension to two underground gold drilling contracts, one at Newmont Mining’s Tanami gold mine in the Northern Territory and the other at KCGM’s Mt Charlotte mine in Western Australia.
Swick will also enter into surface reverse circulation (RC) drilling contracts with Kin Mining and Cobalt Blue Holdings in its second quarter of 2019.
The improvement is also reflective of changes in the company’s business strategy, according to Kent Swick.
“Over the past six months we have seen evidence of the turnaround in the financial performance of our drilling business,” he said.
“This has been a result of our strategy of improving rates for our drill rigs by renegotiating contracts or moving rigs to better performing sites, driving cost efficiencies across the business, and increasing utilisation.”