Tag Archives: St Barbara

DDH1 drilling contractor debuts on ASX after stellar IPO

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DDH1 Ltd has officially commenced trading on the Australian Securities Exchange following an initial public offering last week that saw the drilling contractor secure gross proceeds of A$150 million ($115 million) through the issue of around 40% of its shares.

The IPO proceeds were used to allow existing shareholders to realise part of their investment in the company and to repay company borrowings, the company said. The IPO was one of the largest by a Western Australia-based business in the past decade, according to DDH1.

“The ASX listing marks a significant milestone in the evolution of DDH1, which was established in Perth in 2006 with the vision to create Australia’s premier mineral drilling contractor,” the company said. “Over time, DDH1 has earned the custom of Australia’s premier mining companies through its repeated and meticulous service offering of gathering the critical geological data that supports the decision making in respect of all mining activity through the complete cycle of a mine’s life.”

DDH1 has a portfolio of approximately 102 clients, with a financial year 2020 pro-forma revenue of A$249.8 million. Its earnings are diversified across multiple commodities and geographies, with a client base that includes Newcrest Mining, BHP, Evolution Mining, Gold Fields, Independence Group, Kalgoorlie Consolidated Gold Mines, Newmont Corp, Ramelius Resources, Rio Tinto, Roy Hill Iron Ore and St Barbara.

It offers both surface and underground drilling services, with diamond coring and reverse circulation rigs on offer.

Sy Van Dyk, DDH1’s Managing Director and CEO, said: “The growth and success of DDH1 to date is testament to the commitment of the whole team, which strives to ensure the safety of all stakeholders while delivering exceptional service to our clients.

“Our long-term client relationships are built on the provision of quality drilling services and a deep understanding of our client’s business needs. The company’s significant market position reinforces the strong levels of industry recognition.”

He concluded: “There is growing demand in the Australian mineral drilling sector for DDH1’s services because of increased exploration, development and production spending by minerals exploration and mining companies. As an ASX-listed company with a strong balance sheet, a committed shareholder base, a disciplined approach to growth and access to capital markets, DDH1 is well positioned to pursue its growth strategy.”

Macmahon lines up open-pit/underground work at Red 5’s King of the Hills gold project

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Macmahon Holdings Ltd has been awarded its second major contract in as many weeks in the Goldfields region of Western Australia, receiving a letter of intent to carry out contract mining services at Red 5 Ltd’s King of the Hills (KOTH) gold project.

The KOTH project is an open pit and underground gold deposit with a projected mine life of over 16 years. This could see the company produce 176,000 oz/y of gold over the first six years, according to a recent feasibility study.

Red 5 has commenced the construction of the camp and processing facilities on site and is planning for mining to commence in early 2022. First gold production is expected to occur in June 2022.

Just last week, Macmahon was appointed the underground mining contractor at St Barbara’s Gwalia gold mine at Leonora Operations in Western Australia.

Following a detailed tender process for both the surface and underground mining activities, Red 5 has issued a letter of intent to Macmahon for a proposal combining both scopes of work. Under the agreement, the parties are working to finalise the documentation by which Macmahon will provide all surface and underground mining services to the project over a five-year contract term, commencing in the March quarter of 2022.

Macmahon expects this documentation will be completed by June 2021 and that the contract will add over A$650 million ($497 million) to the company’s order book.

Macmahon’s CEO and MD, Michael Finnegan, said: “We are delighted to be in advanced discussions with Red 5 for its King of the Hills gold project in Western Australia. We have a strategy to expand our presence across the mining services value chain, and this project highlights the benefits of being able to offer a combined surface and underground mining solution from the outset. We look forward to continuing our relationship with the Red 5 team and supporting their development of this important project.”

Orexplore and St Barbara agree on GeoCore X10 core scanning contract deferral

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Swick Mining Services says its Mineral Technology Business, Orexplore, is pushing back the delivery of its first in-field commercial agreement with St Barbara Ltd at the Gwalia mine in Leonora, Western Australia, following discussions with the gold miner.

The contractor announced back in August that it would scan some 1,500 m/mth of core over a six-month period at the Gwalia mine, conducting technical assessment over a number of potential benefits of the detailed core analysis and a high volume of quality data generated by the GeoCore X10 instrument. It was expecting to mobilise the GeoCore X10 shortly after a formal contract was signed.

In an update on Friday, the company said: “Following discussions with the client, and due to their operational priorities, it has been agreed that the contract will be deferred to financial year 2022.”

This decision has also had an impact on Swick’s planned demerger of the Orexplore business, with the ASX-listed company now saying it will defer the transaction “to allow greater time to seed the commercialisation pathway with initial commercial projects”.

It added: “Swick considers securing commercial projects is a key step in developing a clear pathway for the commercialisation of Orexplore’s technology, and therefore for a successful demerger.”

As a result of the deferral of the demerger, Jason Marinko has resigned from the recently created Managing Director role. Marinko will leave the business effective mid-February and Kent Swick, Managing Director of Swick Mining, will lead Orexplore as it works towards a demerger.

Jason Marinko to lead new Orexplore Technologies business

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Swick Mining Services has appointed Jason Marinko as Managing Director of Swick’s Mineral Technology Business as a key step along the pathway to demerge Swick’s Drilling Business and Mineral Technology Business, the latter of which will operate under the new company name of Orexplore Technologies Ltd.

Marinko is an experienced public company CEO, Chairman and Company Director, with expertise in the technology and investment banking industries and a proven track record in leading technologies to commercialisation, Swick says. This includes a stint as Executive Chairman of geospatial imagery company Spookfish, where he oversaw its ASX-listing and growth before leading negotiations with North America’s largest aerial imagery and data analytics company, EagleView Technologies Inc, that resulted in a successful takeover of Spookfish.

He also has extensive corporate finance experience as associate director at Perth-based firms Azure Capital and Euroz Securities.

Marinko complements Orexplore’s highly credible management team, which has expert capabilities covering the whole breadth of the business from theoretical physics, manufacturing, software engineering to operations, the company says.

Swick Managing Director, Kent Swick, said: “We are extremely pleased to announce Jason as Managing Director of Orexplore Technologies. I believe the wealth of experience that he brings in managing listed companies, combined with his extensive technology and financial expertise both in Australia and overseas, will provide significant benefits to Orexplore as it moves to demerge from Swick and beyond.

“Swick has made significant progress along the Orexplore journey since our first investment in 2013 initially funding R&D, consolidating the ownership to 100% in 2017 and continuing to support Orexplore to develop the technology it has today. Orexplore is progressing its commercialisation pathway and can now move to address a large potential market for the product. I am confident Jason will be able to navigate the opportunity that lies ahead and look forward to working alongside him.”

Marinko commented: “I am excited to be leading Orexplore’s highly talented team in Australia and Sweden into the next stage of its growth. A decade of pioneering research, development and investment in Orexplore’s unique and disruptive technology that enables fast, accurate, three dimensional non-destructive core analysis has created significant opportunities in the brownfield drilling market that are ready to be realised and I look forward to driving its commercialisation and delivering value to Swick shareholders.”

Commercialisation of Orexplore has gathered momentum with an agreement secured in August 2020 with St Barbara Limited. Under this agreement, approximately 1,500 m/mth of core will be scanned over a six-month period at the Gwalia mine in Leonora, for a total value of approximately A$700,000 ($505,724). The GeoCore X10 instruments will be mobilised to site during this month, with Orexplore Technologies working towards ensuring the value is extracted from the rich 3D data set and adding long-term value beyond the initial six-month period, it said.

Swick Mining working on drilling and technology business demerger

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Swick Mining Services says it is working towards a demerger of its drilling and mineral technology businesses following a strategic review.

The announcement came at the same time as the ASX-listed METS firm revealed Drilling Business revenue and EBITDA results of A$149.6 million ($111 million) and A$24.6 million, respectively, for its 2020 financial year. A 9% increase in underground metres drilled saw the company beat its 2019 financial revenue total of A$142.9 million, while the impacts of COVID-19 and ramp-up costs at the Pogo mine contract (Northern Star Resources) saw EBITDA drop from A$28.2 million in the previous financial year.

During this period, the company’s deep exploration division launched new DeepEX rigs, which Swick says are the world’s most powerful underground mobile rigs with capacities to drill exploration holes up to 3,000 m of NQ2 core. Two DeepEX hybrid rigs are currently deployed at client sites, it said.

And the company successfully completed on-site trials of its Orexplore technology, the major technology underpinning its mineral technology business.

These site-based trials were undertaken at Sandfire Resources’ DeGrussa copper-gold mine, in Australia, for a three-month pilot project and at Sweden-based mining and smelting company Boliden for a five-month paid pilot project.

“The first trial at the DeGrussa mine resulted in approximately 9,000 m of core scanned in total, generating 20 TB of 3D data – the largest and most continuous dataset of its kind in the world for a single mine site,” Swick said. “With the trial complete, Orexplore has engaged two world-class subject matter experts to assist Sandfire and other potential clients understand the benefits of a comprehensive Orexplore data set.”

Earlier this month, Swick said Orexplore had been awarded its first in-field commercial agreement with St Barbara Ltd at the Gwalia mine in Leonora, Western Australia.

Despite these wins over the last year-and-a-bit, the company said a strategic review had recommended the company carried out a demerger of the Drilling Business and the Mineral Technology Business.

This could be tied to the fact that, at a group level, Swick reported a net loss after tax of A$6 million in the 2020 financial year, which, it said, reflected the lower Drilling Business earnings and ongoing investment in the company’s Mineral Technology Business, Orexplore.

Swick Managing Director, Kent Swick, said: “Financial year 2020 has presented a unique and challenging set of circumstances with the onset of the COVID-19 pandemic. The business has quickly adapted during this difficult period, ensuring we maintained continuity of operations and protected our people on site both internationally and locally.

“I am pleased with the ability of our Drilling Business to deliver robust earnings in this environment and secure new work with existing clients, including our two largest contracts for Northern Star and BHP, which provide a strong platform for the business as we enter the 2021 financial year.

“Meanwhile, our efforts in the Mineral Technology Business are starting to show value, with successful site-based, paid trials in the year for our Orexplore technology and the award of our first ever in-field commercial agreement earlier this month.

“We have a clear strategy for these two businesses and are now progressing with the outcome of our strategic review to demerge the Drilling Business and the Mineral Technology Business to allow them to pursue their respective strategies and ultimately deliver the greatest value to Swick shareholders.

“Meanwhile, Swick is in a strong financial position, with gearing excluding AASB16 lease liabilities reduced to A10.6 per cent in the year. Swick has A$12.7 million cash and A$18.5 million in undrawn facilities, providing the liquidity that has enabled us to win and deliver on new work, invest in new technologies including DeepEX and Orexplore, and continue providing value for shareholders in these uncertain times through dividends and share buybacks.”

Swick signs BHP, MATSA drilling contracts and inks first Orexplore commercial pact

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Swick Mining Services Limited has secured new drilling contracts with BHP’s Olympic Dam mine and MATSA’s copper operation in Spain at the same time as confirming the first commercial agreement for its Mineral Technology Business.

In what will be Swick’s second largest project, the company has been awarded a five-year contract to provide underground drilling services at Olympic Dam mine in South Australia.

Swick has been working with up to five rigs at Olympic Dam since 2017 when an initial trial of its underground mobile diamond drills commenced.

The new contract will see Swick increase its rig volume at site, with the first year’s scope requiring an initial eight rigs, with five to be added to the three currently operating at site. Of the five additional rigs, three are at site already and the remainder will be mobilised from Swick’s existing fleet, according to Swick.

Swick has also been awarded a five-year contract from Minas de Aguas Teñidas SAU (MATSA) at its copper operations in Spain, where two rigs are currently deployed.

These projects, combined with Swick’s existing work in hand, has expanded Swick’s order book to A$363 million ($260 million), it said.

Swick’s Mineral Technology Business, Orexplore, has also been awarded its first infield commercial agreement, the company said.

Under the agreement with St Barbara Ltd, some 1,500 m of core will be scanned per month over a six-month period at the Gwalia mine in Leonora, Western Australia.

Swick will conduct technical assessment over a number of potential benefits of the detailed core analysis and high volume of quality data generated by the GeoCore X10 instrument, it said. The agreement has a value of around A$700,000 over the six-month period.

“Orexplore will be working with world-class subject matter experts to ensure maximum value for the client is derived from the data obtained to develop a compelling justification for ongoing services beyond the initial six-month period,” it said.

Swick expects a formal contract to be signed in the coming weeks and mobilisation of GeoCore X10 instruments housed in a custom-built mobile laboratory to site in September 2020.

The GeoCore X10 analyses the element concentrations and minerals contained in a drill core, as well as providing a visualisation of the rock’s internal structure in 3D. This speeds up the chemical laboratory analysis process, enabling miners to accelerate their own decision making.

Swick Managing Director, Kent Swick, said the company was delighted to be awarded a long-term contract with BHP at Olympic Dam.

“Credit goes to our operational team who have delivered outstanding safety performance, and high quality and productive drilling that enabled Swick to secure this long term, high volume work,” he said.

“In addition, securing a five-year agreement with a large copper miner MATSA, in Spain, adds to our ongoing work with Somincor in Portugal along the historic Iberian Pyrite Belt. Our local workforce in that region is highly skilled and they are to be commended for converting a trial into a long-term contract in Spain.”

He concluded: “In the Mineral Technology Business, it is very exciting that we have taken a significant step forward with the award of Orexplore’s first infield commercial agreement. We look forward to ensuring the value is extracted from this rich 3D data set and I am confident we can add significant long-term value to the Gwalia mine and the wider brownfield market.”

St Barbara’s FIFO Alliance continues at Leonora

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Alliance Aviation Services will continue to fly workers in and out of St Barbara’s Leonora gold operations in Western Australia after the two companies agreed to extend the air charter services contract for another three years.

Alliance has been providing these fly in/fly out services to St Barbara since 2012 and will continue to arrange eight flights per week between Perth and Leonora.

Lee Schofield, Chief Executive Officer for Alliance, said the flexibility of Alliance’s fleet, “together with industry leading on time performance, greatly assisted Alliance in retaining this contract”.

This is the fifth contract Alliance has retained in a “selective tender process” over the past 12 months. Recently, Alliance received a potential five-year extension with Incitec Pivot for services to its Phosphate Hill operations in northwest Queensland.

St Barbara’s Gwalia mine is just 3 km south of Leonora in Western Australia. It produced 268,000 ounces of gold at an all-in sustaining cost of A$891 per ounce in the 12 months to the end of June. The company is currently in the process of evaluating a deep underground extension to the mine, which could see operations continue until the end of St Barbara’s 2013 financial year.