Tag Archives: Swick Mining

Swick Mining to pursue battery-electric, remote control diamond drilling

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Swick Mining’s latest market update has indicated its postponed demerger of Orexplore should now go ahead by the end of the year, allowing it to concentrate on the development of new underground drilling technologies including battery-electric diamond drill rigs and remote control drilling.

In a release issued today, Swick said it was recommencing the demerger process for Orexplore with the appointment of Brett Giroud as Managing Director of the Mineral Technology business. Giroud, who joined Swick in May as General Manager, has been reviewing Orexplore’s technology and its future potential and will take on his new role as of July 1.

Back in February, Swick Mining Services said it as pushing back the delivery of Orexplore’s first in-field commercial agreement for its core scanning technology with St Barbara Ltd at the Gwalia mine in Leonora, Western Australia, following discussions with the gold miner, deferring the contract into the 2022 financial year (from July 1, 2021). This decision saw the ASX-listed company also push back the demerger process.

In the meantime, Swick, which reported unaudited financial year 2021 (to June 30, 2021) expected results of A$153-156 million ($115-117 million) of revenue and A$29-31 million of EBITDA, has established a Future of Drilling department. This newly established department includes its Gen3 E-Rigs and Remote Control Drilling (RCD) innovations.

These Gen3 E-Rigs have the capacity to reduce the power consumption per metre drilled by around 50%, leading to overall lower carbon footprint, Swick said. The underground diamond drilling rigs remove all diesel power and a large portion of the hydraulic components currently on the “Swick GenII drill rig”.

“The Gen3 E-Rig will have a large battery capacity allowing for electric tramming and will also utilise the latest in DC electric motor technology to power the drilling components,” the company said.

A research and development drill rig fitted with an electric drill head is nearing readiness for field testing and a prototype rig is expected to be test drilling at a Western Australian client’s operation within the next three months, the company said. A fully proven Gen3 E-Rig is expected to be available for commencing service by mid 2022.

Its RCD system allows drillers to perform automated drilling through video-linked controls from surface effectively and safely, with an additional four non-productive hours a day converted to drilling time, Swick claims.

The RCD system consists of three major components – automated drilling, high speed communications to surface and semi-automated robotic handling of tubes and rods. “Swick has developed an advanced automation capability and is working with specialist consultants on the communications and robotics to establish the final system,” it said.

While the company is talking up its Gen3 E-rigs, its GenII mobile drill rigs – offering the smallest footprint, but highest power on the mobile drill market, Swick says – have recently reached a milestone, with units built and sold to clients in Canada and Tanzania.

“This new division has enabled Swick to participate in significant mining markets and regions where it does not have a presence operationally,” Swick said of the Swick Engineering business which the rigs come under. “Rig sales in financial year 2022 of eight to 12 rigs are targeted and, with a growing global demand for high-quality mobile underground drill rigs, Swick is well placed to service this market.”

This demand will be served by an expanded engineering facility in South Guilford, the company said.

Swick Mining continues drilling wins at home and abroad

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Swick Mining Services is celebrating a hat-trick of contract drilling wins with the Barrick Gold and Newmont Goldcorp-owned Nevada Gold Mines JV, Silver Lake Resources and Northern Star Resources.

The Australia-listed contractor has been awarded a three-year contract extension at the Nevada Gold Mines JV, with the company’s US division extending a relationship that started in 2013. The work with Silver Lake Resources involved being selected as the preferred tenderer, subject to contract execution, to provide underground diamond coring services at its Mount Monger operation, in Western Australia. And, lastly, Northern Star Resources has increased the scope of work for Swick at the Jundee gold mine, also in Western Australia, from nine to 14 full time underground diamond coring rigs.

The awards secure work for 18 rigs (eight existing and 10 additional rigs) and increases Swick’s contracted work in hand to A$353 million ($248 million), the company said.

Swick Managing Director, Kent Swick, said: “We are delighted to be deepening our relationships with existing clients and, in the case of the new work with Silver Lake, returning to a project where we have extensive experience.”

He added: “It is particularly pleasing that our international strategy is yielding significant results, with a third of our total deployed underground diamond drilling rigs now operating outside of Australia. By the end of September, we will have at least 22 rigs operating in our international operations including the USA, Portugal and Spain – all at major mines with Tier One clients.”

In Nevada with the Nevada Gold Mines JV, Swick currently operates eight rigs between the Turquoise Ridge and Cortez Hill gold mines as well as the Goldrush project, it said. As part of the contract extension, Swick will be deploying two additional rigs to these operations.

Swick undertakes underground diamond core drilling and underground RC drilling at the projects, with the contract extension securing work for 10 rigs at fixed pricing for two years, with a rise and fall applicable for the third year. In total, the Nevada Gold Mines JV produced in excess of 4 Moz of gold in 2018, more than double the next largest gold mining complex.

The contract extension, combined with the contract recently awarded to Swick at the Northern Star-owned Pogo gold mine in Alaska, will see Swick take a leading position in the US underground drilling market, it said, adding that the first four underground rigs at Pogo commenced drilling in June.

The Silver Lake Mount Monger contract is expected to be for a period of two years with a provision for a 12-month extension, Swick said. The contract will commence in August, with three rigs undertaking drilling across the Mount Monger site, namely the Daisy Milano, Cock-eyed Bob and Maxwell’s underground mines.

Swick says it worked at the Daisy Milano project for a decade from 2007 before it was awarded to another contractor in 2016. The Mount Monger operations produced 35,172 oz of gold in the March quarter.

At Jundee, meanwhile, Swick says it will steadily increase its fleet and manning from July to October to meet the increased scope. Northern Star is Swick’s largest client – with the Jundee contract Swick’s largest ever project – and will operate this expanded service under the current contract agreement.

Kent Swick said: “Once we reach 14 full time rigs at Jundee, it will represent a record number of rigs that Swick has had at any one mine, and the largest Australian underground diamond drilling program I am aware of since we have been in the underground contracting business for over 20 years.”

Swick Mining boosts profits as it looks to drill deeper at Kirkland Lake Gold’s Fosterville mine

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Swick Mining’s strategies of shifting drill rigs on to better performing contracts or new projects and reducing costs has continued to pay off with the underground and surface mineral drilling business posting a more than 100% year-on-year increase in EBITDA in the December quarter.

The company delivered “strong unaudited results” for the three-month period, it said, with the drilling business’ earnings before interest, tax, depreciation and amortisation (EBITDA) up 109% to A$9.5 million ($6.8 million). This coincided with the company completing 263,690 m of drilling and the average fleet use coming in at 75% across the quarter.

Drilling business revenue of A$37.7 million was up 8% compared with the same quarter of 2017. Overall group revenue and EBITDA was marginally up on the drilling business numbers as the company’s mineral technology business, Orexplore, registered several commercial scans during the period.

In addition to shifting drill rigs and cutting costs, Swick benefitted from improved short-term rates at two existing underground drilling services contracts in the quarter – for Newmont and its Tanami and Mt Charlotte assets, where 11 rigs are deployed. Swick said: “These rates will run through to March 2019, to allow for a competitive tender process for the long-term contracts to be completed (in which Swick is participating).”

Swick Managing Director, Kent Swick (pictured), said: “The earnings rebound of our drilling business has continued and shows how we can unlock Swick’s potential when we target the right projects for the right clients and ensure we deliver value for money for our clients.

“The improved margins are a mixture of adjusted rates where needed and also from a 6% year-on-year reduction in our operating costs per shift in the underground division by focusing on manning levels, consumables usage, procurement processes and inventory management.”

The Swick MD added that its recently established deep exploration division, DeepEx, continued to move forward during the quarter with preparations underway to deploy two high-torque mobile drills this month at Kirkland Lake Gold’s Fosterville mine. This will further assist the deep underground exploration drilling it is already carrying out at the mine.

This came on top of an update on Orexplore, which in the eight months since launch has secured seven customers and numerous trial programmes with a range of miners, explorers and consultants, Kent Swick said.

He also said the gold spectrometer was undergoing testing at Orexplore’s R&D headquarters in Stockholm, Sweden, and that the company expects to have initial feedback on the in-machine prototypes performance during this quarter.