Tag Archives: Danie Pretorius

Master Drilling continues diversification plan in uncertain market

Mine shafts and equipment, Mineral exploration, Mining equipment, Mining finance, Mining services, , , , , , , ,

Master Drilling Group continued to add to its client and service base over the course of 2020, with bright spots reported in exploration drilling and the West Africa gold sector.

Its 2020 financials were hit by COVID-19, with revenue dropping 17% year-on-year to $123.1 million and operating profit declining to $12.3 million, from $24.1 million in 2019.

Danie Pretorius, CEO of Master Drilling, said: “Master Drilling’s overall performance for the year was weighed down by the weak global economic growth environment entering 2020, which was compounded by the material impact of COVID-19, across the 23 countries in which we operate, from a human, financial and operational perspective.

“Although the group experienced a significant decline in revenue in the South American operations, primarily due to government-imposed COVID-19 restrictions, this was offset by regions such as India, Africa and Scandinavia which remained operational and received various stimulus packages.”

Despite a decrease in revenue, the company’s net cash generation increased 72.7% to $25.5 million as it contained capital expenditure by balancing maintenance with emerging opportunities.

In the second half of the year, Master Drilling was awarded new exploration projects and mobilised an additional fleet to service existing clients, with a considerable turnaround in drilling and exploration activity becoming more apparent and creating a healthy pipeline, it said.

Around a year ago, Master Drilling fulfilled the conditions to acquire Geoserve Exploration Drilling, increasing the South Africa-based company’s ability to offer exploration drilling, reverse circulation drilling, geotechnical investigations and grade control drilling services.

Its commitment to Africa saw the continent become the largest contributor to the group in terms of revenue and profits over the course of the year. Aggressive expansion into West Africa continued as part of the group’s diversification strategy, with a specific focus on gold, which has seen a surge in demand since 2019.

Master Drilling also continued to grow its presence in new markets, including Australia, Russia and Central Asia. It secured new contracts with a focus on raiseboring and mechanised mining services, too.

As at December 31, 2020, Master Drilling’s sales pipeline totalled $539.9 million with a stable order book of $212.8 million (2019: $142.1 million).

“In the short to medium term, the sales pipeline is expected to normalise and increase with further tactical acquisitions and joint ventures supporting performance,” it said. “Opportunities to diversify outside of the traditional drilling business into areas such as artificial intelligence will also continue.”

Although capital has been tightly managed in response to the uncertain environment, Master Drilling says technological innovation remains a key priority for the company.

Aligned to this, Master Drilling announced a 40% investment in AVA Solutions, a specialist in data-driven mining fleet management solutions, this month.

Commenting on the investment, Pretorius said: “Our recent investment in AVA is aligned with our strategy to diversify our services and invest in businesses that help us meet our clients’ demand for increased mechanisation and digitisation. Other opportunities with low capital requirements and short return cycles are currently under review.”

He concluded on the annual results: “Although the shape of recovery remains uncertain, we have seen a turnaround in the past six months across the commodities and regions that we are already exposed to. Having made significant investments in our fleet, technology and geographical diversification over the past couple of years, we are now positioned to capitalise on the predicted commodities bull run without requiring additional capital investment.”

Master Drilling takes stake in mining fleet management specialist AVA Solutions

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Master Drilling Group has announced a 40% investment in AVA Solutions, a specialist in data-driven mining fleet management solutions.

Founded in 2015 by Anton Fourie and Jason van der Watt, two engineers with over 25 years of combined mining industry experience, AVA has achieved significant recognition in South Africa by creating a captive market for its disruptive, hardware-agnostic and quick to implement Software as a Service (SaaS) model at much lower costs to other solutions, Master Drilling says. Currently, AVA’s digital platform analyses and tracks more than 1,800 load and haul vehicles across 28 different sites in five countries for a range of major companies including the likes of Anglo American, Exxaro and South32.

Danie Pretorius, Master Drilling CEO, said: “Technological innovation is a key priority for Master Drilling as we continue to support our clients to move down the cost curve, optimise their operations and increase safety. Our investment in AVA is aligned with our strategy to diversify our services and invest in opportunities in our existing target markets with low capital requirements and short return cycles.

“We believe that AVA has great growth potential, and we look forward to supporting them through our existing client base and networks internationally.”

AVA’s solution was shaped by the founders’ knowledge of the mining industry and understanding of the challenges faced in the production environment, according to Master Drilling. “By condensing multiple technology layers into a single interface, AVA ensures that equipment operates at its optimal level of performance with little to no additional capital investment,” it said.

Anton Fourie, Co-Founder and COO of AVA, said: “We have grown exponentially from a start-up five years ago to a recognised player with a proven technology for the mining industry. We have a clear strategy to provide an end-to-end solution that goes beyond the load and haul environment and across the entire mining value chain. Through our partnership with Master Drilling, we are gaining access to extensive experience that will support the ongoing development of our platform and a footprint that will accelerate our international expansion.”

The next developments for AVA’s scalable platform will focus on new elements including scheduling and logistics that will enable mines to not only improve productivity of the load and haul value chain but of the entire mining value chain, according to Master Drilling.

Master Drilling makes ‘horizontal integration’ move with Geoserve buy

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Master Drilling has announced that it has fulfilled all the necessary conditions to acquire Geoserve Exploration Drilling, increasing the South Africa-based company’s ability to offer exploration drilling, reverse circulation drilling, geotechnical investigations and grade control drilling services.

In its 2019 financial year results, released today, it said the relevant competition commission had approved the transaction and Geoserve, a private company specialising in exploration and drilling services, would now be embedded into the company’s African segment as a wholly-owned subsidiary.

Danie Pretorius, CEO of Master Drilling, said: “The transaction will augment our expertise and global reach, as well as provide a platform for horizontal integration in the mining industry, which has been under pressure in the past few years, necessitating consolidation.”

Master Drilling paid MOGS Mining Services ZAR100 ($5.7) for the company, as well as assumed the bank overdraft facility and certain liabilities tied to Geoserve, it said. The company said a detailed purchase price allocation will be performed during 2020 and disclosed in its 2020 financial statements.

Master Drilling added: “Geoserve has a well-established footprint and pipeline that will reinforce Master Drilling’s capacity and income profile through increased exploration drilling, reverse circulation drilling, geotechnical investigations and grade control drilling services, which are all key to the broader mining sector.”

Master Drilling continues down technology path amid global uncertainty

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Master Drilling Group included details of its remote drilling technology, commissioning of the Mobile Tunnel Borer (MTB) and the first phase of its shaft boring system development within its latest financial results release.

Reporting “reasonable results” for the six months ended June 30, 2019, which included a 3.8% year-on-year increase in revenue to $70 million and a 5.6% jump in headline earnings per share, the company’s CEO, Danie Pretorius, said Master Drilling had worked hard on stabilising new operations and growing its presence in new territories.

“In the face of continued uncertainty and volatility, which has inevitably impacted on business performance, we have remained committed to our strategic journey of diversifying our presence across geographies, commodities and sectors,” he said, adding that the company saw new business opportunities in Russia and Australia.

Even with only a slight increase in earnings and revenue, Master Drillings new business pipeline encompassing all geographies remained “solid” at $297.1 million, the company said. Its order book totalled $198.6 million at the end of the period.

Pretorius added: “While political and economic factors continue to shape our operating environment, at Master Drilling we continue to spearhead technological development, stabilise our global footprint and explore new business opportunities. As a result, the business remains stable and well positioned to benefit from an improved global economic climate.”

Master Drilling, one of the largest rock boring and drilling services providers in the world, spends the bulk of its capital spend on capacity expansion, some of which has begun to yield positive results, such as remote drilling technology, the company said.

“Having completed testing of this (remote drilling) technology in South Africa, Master Drilling has successfully implemented it in Mexico and Peru,” the company said. The test in South Africa took place 3 km underground at AngloGold Ashanti’s Mponeng gold mine, the world’s deepest gold mine. This saw a raisebore machine operated remotely.

Meanwhile, the commissioning of the MTB at Northam Platinum’s Eland mine, in South Africa, is currently underway, with underground drilling having already commenced, the company said. This follows testing at a quarry just outside of Rome, Italy, last year.

The first phase of the company’s shaft boring system – a new shaft sinking system (reported on in the annual shaft sinking feature in IM September 2019) – is also in the process of commissioning, the company said.

“This bears testament to Master Drilling’s unwavering commitment to technology development and testing, which will continue to be a key focus during the remainder of 2019,” the company concluded.

Rock boring and remote drilling technologies highlighted in Master Drilling results

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Master Drilling might have faced a tough macroeconomic operating environment than previously expected in 2018, but the company was able to make progress on several fronts.

The company’s revenues increased 14.2% year-on-year to $138.7 million in 2018, while its headline earnings per share decreased 7.8% to $0.107.

Master Drilling CEO, Danie Pretorius, said notwithstanding the difficult trading conditions, the company “remained steadfast in the pursuit and implementation” of its strategy, “laying the foundation for future growth through the continued development of new, ground-breaking technologies, the expansion of our global footprint and by nurturing our client and business relationships”.

The company exited the year with an order book of $203.6 million and a pipeline of $578.6 million.

In terms of the company’s “ground-breaking technologies”, the company said it made progress on three fronts:

On the former, Master Drilling said, following testing at a quarry in Italy, the MTB was being shipped back to South Africa to take part in a pilot project.

It said testing of the Blind Shaft Boring system technology was also underway.

And, on the remote drilling applications, it had this to say:

“Recently, Master Drilling introduced Remote Drilling, which has been successfully commissioned at AngloGold Ashanti’s Mponeng mine, considered the world’s deepest mine.

“Remote drilling enables operation of an automated drill rig from a remote location. Master Drilling’s remote raise bore machine is currently working 3 km underground at Mponeng mine which is being operated from the contractor’s site office on surface.”

The Master Drilling remote system is a proprietary ‘plug and play’ control and display module that connects to the drill rig’s local control module through the mine’s underground and shaft communication network, it said.

“By removing all personnel from the dangerous underground environment, this self-driven mechanism has proven to improve production time and confirms that autonomous drilling technology is at the core of safer mining operations,” it said.