Good morning folks,
Quiet morning on the junior resource front as this bear market grinds on. One bright spot was Major Drilling Group International's latest financials.
The New Brunswick-based company - a bit of a mining bellwether as one of the world's largest drilling companies - upped revenue to $83.9 million (from $67.6M a year ago) for the quarter ended July 31. They also increased gross margin, but booked an $11.2-million net loss primarily due to restructuring costs and writedowns.
The company, which operates globally, is in cost-cutting mode and shuttered operations in South Africa and Namibia.
“Although demand for drilling services continues to be weak and pricing very competitive, we were able to increase our revenue and margins over the last three months,” said Francis McGuire, President and CEO of Major Drilling. “We continue to grow our services around existing mines, including underground core and percussive drilling, which should help to provide greater revenue stability, provided senior and intermediate miners continue with their production plans. Our efforts to reduce costs have had a positive impact on margins and have allowed us to grow our EBITDA to $11.4 million, more than double our EBITDA in the first quarter of last year.”
Net cash increased $3.3 million to $32.9 million and a semi-annual dividend of 2 cents a share was declared, payable Nov. 2.
It'll be the last financials for longtime CEO McGuire, as CFO Denis Larocque is taking the helm. Major Drilling's board of directors is a bit of a who's who of the Canadian mining world, including David Fennell (Hope Bay Gold/Miramar) and Catherine McLeod-Seltzer (Arequipa Resources, Peru Copper, Bear Creek Mining).
The stock is down about 40% over the past year, but got a bit of an early lift on the results, rising 2.9% to $4.55 on low volume.
News release: Major Drilling reports first-quarter results and declares dividend