IMDEX is seeing light at the end of the COVID-19 tunnel, with some restrictions affecting its international operations to be eased during May and June, prompting mining operations to resume and drilling contractors to return to work.
With 20 offices internationally, sales in 102 countries, and a presence in 70% of mineral drilling projects globally, the company and its clients have been dealing with restrictions and government declarations in multiple jurisdictions, IMDEX said.
The restrictions have not affected IMDEX’s supply chain and it has been able to service clients, it says.
Mexico has recently emerged from a 30-day, COVID-related shutdown after mining was deemed an essential service, joining South Africa, Argentina, Peru and parts of Quebec and Brazil as countries where operations have recently started ramping back up.
In Australia, IMDEX and its clients have been able to continue operations while working within state restrictions, it said.
In a presentation hosted by Goldman Sachs released to the ASX, IMDEX said business disruption appeared to have stabilised and there had been an increase in demand in late April for remote working technologies.
The company had followed a strong first half-year result (six months to December 31, 2019) with its strongest March quarter revenue on record, up 11% on the same period of 2019, before the effects of the COVID-19 crisis hit during April.
Chief Operating Officer, Paul House, said the company was fielding enquiries from clients looking to resume operations. At the same time, the company was alert to the risk of renewed government and company responses to secondary COVID-19 infections.
“As we see restrictions being lifted, we are receiving enquiries from our clients asking for confirmation of supply to remobilise on drilling projects around the world and we expect this to continue through May and June,” House said. “We are establishing new ways of working internally and with our clients, which will continue and be beneficial when the pandemic eases.
“IMDEX invests heavily in research and development. We have always worked with industry to solve problems and this period is no different. It just means that we have to think creatively – and we have some of the best in the business at doing that.”
He added: “We have a positive growth outlook with solid underlying mining industry fundamentals. Major and intermediate resource companies have strong balance sheets and are focused on replacing reserves.”
IMDEX is also set to benefit from the strong gold mining sector, with House noting that Bank of America recently forecast “gold would hit $3,000/oz in 18 months”. The price currently sits just above $1,730/oz.
About 50% of IMDEX’s commodity exposure is within gold, with copper and iron ore exposure representing 25% and other metals the remainder.