Major posts record quarter
Stellar results from North American operations allowed
Revenue in the first quarter reached $92.6 million — the highest ever for Major, up 11.8% from the previous record of $82.8 million posted in the fourth quarter of fiscal 2005, and nearly 40% better than the $66.2 million recorded during the same quarter last year.
Revenue from North American operations leapt more than 60% over the previous quarter, owing mostly to cash flow from a U.S.-based driller acquired in March.
In fact, cash flow from operations in the quarter increased six-fold to $11.1 million compared with $1.7 million recorded in the prior year quarter. Canadian drilling operations contributed the balance of the revenue growth in the region.
Major also reduced its debt by $8 million, or 14%, during the quarter.
“The outlook for Major continues to be very positive. In the near term, our second quarter is normally our second-strongest quarter in the fiscal year from a seasonal perspective, with the summer drilling season in the north hitting full stride and the hint of spring, and improved weather conditions in the Andes,” says Francis McGuire, president and CEO of Major Drilling.
Revenue for South and Central America were $20.3 million for the quarter, up roughly 29% from the $15.9 million posted for the same period last year. Growth was driven by operations in Mexico with sales jumping 60.6% over the prior year quarter; Chile showed similar growth with sales up 38.4%, and the addition of operations in Suriname. Meanwhile, Venezuelan revenues were down 23.8% from the prior year quarter due to a strike at one client’s mine site and a contract delay at another.
Australasian/African drilling operations, which takes into account Australia, Indonesia, Tanzania, Mongolia, and China, posted overall revenue growth of 22.8%, with revenues of $30.2 million compared with $24.6 million in the same quarter last year.
Major used some of its cash to pay down the debt that it racked up acquiring drilling companies during the downturn in mining in the late 1990s through 2002.
Based in Moncton, N.B., Major Drilling Group International is one of the world’s largest metals and minerals contract drillers.
ALS Chemex offers more in Mexico
ALS Chemex, the minerals division of the ALS Laboratory Group North America, has expanded its existing operation in Chihuahua, Mexico, to include sample preparation.
The new service is one of many changes by ALS Chemex in Mexico, including a move to a 10,000-sq.-ft. office in Chihuahua outfitted with new scanning, crushing and pulverizing equipment.
The moves are designed to service the growing number of companies exploring the eastern side of Mexico’s Sierra Madre, particularly in the Altiplano region.
Samples from the region are now prepared in Chihuahua and shipped to ALS Chemex’s lab in Vancouver for analysis. Companies used to have sample preparation done at the company’s offices in western Mexico, which required crossing the mountains.
ALS Chemex has been in Chihuahua since 1996. In 2002, the operation was downsized to a sample-receiving office from a full-service preparation laboratory. Renewed interest in Mexican exploration prompted the recent changes.
The Chihuahua operation will be managed by Marco Antonio lvarez, a geologist whose experience includes working as a fire assay technician at the Santa Gertrudis gold mine in Sonora state, and as a preparation manager for Bondar Clegg in San Luis Potosi.
ALS Chemex has laboratories in Hermosillo and Guadalajara in addition to the new Chihuahua lab.
ALS Chemex, headquarted in Vancouver, provides assaying and geochemical analytical services for the mining and exploration industry in major mining areas.
SNC-Lavalin to study Toromocho
“We have been working on the project on a fast-track basis and we are excited about hiring an independent firm to complete a prefeasibility study which will include data from several other already completed independent technical studies,” says Charles Preble, president and CEO of Peru Copper.
The study is slated for completion early in 2006. If it proves positive, Peru Copper would likely begin work on a full feasibility study.
The Toromocho prefeasibility will be managed from SNC Lavalin’s Santiago office in Chile.
Measured and indicated resources at Toromocho, prepared by Independent Mining Consultants, stand at more than 1.8 billion tonnes grading 0.47% copper, 0.016% molybdenum and 6.8 grams silver per tonne (all giving a 0.68% copper equivalent grade) using a copper equivalent cutoff of 0.27%. Based on over 116,000 metres of drilling, the estimate is a more than 16% increase over the calculated resource from April 2005.
Peru Copper’s preliminary development plans foresee a mine life of over 33 years with estimated annual mill throughput of 54 million tonnes of ore, producing an average of 221,000 tonnes (487 million lbs.) copper concentrate per year.
In June 2003, Peru Copper optioned Toromocho from Empresa Minera del Centro del Peru S.A. (Centromin), a state-owned mining company.
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