DRILLS & DRILLING
Drilling services specialist
reports 40 % profit increase
If there’s a recession on in the mining industry, no one seems to have told
JSE-listed Master Drilling Group. The Fochville-based company, focused
on both raiseboring and conventional (or ‘slimhole’) drilling, recently
announced a 40,4 % increase in profit to R100 million (US$9,3 million)) and a 29,2 % increase in headline earnings per share for the six
months ended 30 June 2014 (H1 2014). As at the end of the reporting
period, Master Drilling had committed orders totalling R2,1 billion.
Danie Pretorius, CEO of Master Drilling Group.
at the revenue by commodity, the most important commodity was gold (31 % of revenue),
followed by iron ore (21 %) and copper (16 %).
Not surprisingly, platinum accounted for just
7 % (down on the 11 % recorded for 2013).
Master Drilling’s management uses a variety
of key performance indicators (KPIs) to monitor
performance against targeted objectives. These
include rig availability, rig utilisation, achieved
drilling hours (hours drilled per day), achieved
penetration rates (metres drilled per hour) and
revenue contribution per rig.
Utilisation in H1 2014 was 76 % for the
Group’s 91 raisebore rigs (1 % down on the
figure for FY 2013) and revenue per operating
rig per month was US$111 303 (compared to
Master Drilling’s biggest
machine, the Wirth
HG380 SP, at a site in the
Western Bushveld. A 3 m
long drill rod weighing
2 tonnes is being lifted into
position.
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F
ounded by current Chief Executive Officer Danie Pretorius in 1986
with two raisebore machines, the
Group now operates worldwide,
has a fleet of drilling machines
numbering 158 units and listed on the JSE at
the end of 2012.
Over the years since it was founded, the
Group’s original focus on raiseboring has
been broadened to include more conventional
drilling methods, such as blasthole and grade
control drilling, as well as exploration drilling, with a key acquisition in this respect being
that of Australian-owned drilling company,
Drillcorp Africa, in 2006. Today, the Group has
67 slim drill rigs in operation, either RC rigs
or surface and underground
diamond drill rigs.
In Africa the Group operates in South Africa, Zambia,
the DRC and Mali while its
current overseas contracts
are mainly in Central and
South America in countries
such as Mexico, Peru, Brazil
and Chile. Latin America,
in fact, is currently the
Group’s biggest single market, accounting for 49 % of
revenue in the six-month
period, followed by South
Africa (36 %) and the ‘Rest
of Africa’ (13 %).
In terms of revenue by
stage of mining activity,
production stage drilling
accounted for 77 % of the
total, capital stage drilling
for 19 % and exploration
stage drilling for 4 % during
the reporting period. Looking
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DRILLS & DRILLING
resilience in the face of the global mining
cutback is in part attributable to a diversified
exposure to a mix of commodities and multiple emerging markets. It also points to the fact
that raisebore drilling is a niche drilling segment used extensively in on-mine development
Master Drilling’s RD7 rig is
designed for large diameter
and deep raise boring work
using 15 inch (381 mm)
diameter raise bore rods at
3,3 m length each.
Master Drilling site showing innovative environmental solutions for specific project requirements in Europe for two 700 m deep plus ventilation shafts to be
drilled. The sound-proof hood allows 24-hour operation in close proximity to residential areas. Also seen here are drilling mud containers for no site soil contamination and complete removal of all cuttings from site.
October 2014MODERN MINING43
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US$117 047 for FY 2013. The 67 slim rigs in
use in the six-month period achieved a utilisation of 50 % (54 % in 2013) and a revenue per
operating rig per month of US$58 570 (up on
the FY 2013 figure of US$50 740).
Commenting on the results, Pretorius said:
“Master Drilling’s business strategy aims to
grow our reputation as a leading, global specialised drilling services group – and to deliver
long-term, sustainable growth through further
development and expansion of our drilling
services.
“Consistently focused on expanding our
global footprint, we believe that growth into the
rest of Africa will be achieved from our solid
South African base, and in partnership with
major blue-chip mining companies.
“To sustain our growth, we believe that it
is imperative to expand our services beyond
raisebore drilling. To this end, we have made
significant progress by diversifying our service
offering in presenting solutions to the challenges faced by our customers.
“We also believe that ongoing research into
and development of mechanisation, automation and remote drilling services continuously
improves the quality of our service offering.
“Our order book for 2015 onwards reflects
the success of our business model, particularly
our strategy to diversify across commodities
and mining stages.
“With the platinum strike in South Africa
and delays in commissioning some of our
recent projects behind us, we look forward to
completing the expansion of our capital fleet
scheduled for deployment in 2015.”
Master Drilling believes that its relative
(ventilation shafts and ore passes) by existing
producers and tends to be insulated from the
mining capital cycle.
Primary services offered by the Group
include raisebore drilling, boxhole and slotriser boring/drilling, drain-hole drilling,
drop raising, shaft support and surface blasthole drilling and (through Master Drilling
Exploration) core drilling, percussion and RC
drilling. Secondary services offered, either
directly or through third-party providers,
extend to earthworks, piling and foundation
construction, directional drilling and wedging
and core logging and cutting.
The Group has an integrated business
model which includes the design, manufacture, service and operation of rigs, with the
design and manufacture of equipment taking
place at its extensive facilities at Fochville on
the West Rand.
Master Drilling has recorded a number of
milestones over the years. In 2001 it acquired
the largest raise drill ever built (an HG380), in
2004 it designed and built a remote-operated
shotcrete application machine and in 2005 it
achieved ISO 9001:2000 accreditation. In 2006
it drilled Europe’s deepest 4 m hole with the
HG380 machine at Tara Mines, Ireland. This
saw 692 m being drilled in 90 days. In 2010
it completed a 7,3 m diameter hole with the
HG380, reportedly the largest to date, and in
2011 it designed the ‘first-ever’ low profile
blind hole borer. A year later it was responsible
for what it describes as “the longest and most
accurate raisebore hole ever drilled”. 
Master Drilling’s raisebore
drillers cabin. The unit is
ergonomically designed,
extremely safe and allows
full operational views.
The control panel features
remote operation and
automated controls.
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