Tag Archives: Swick Mining Services

Perenti completes DDH1 acquisition, establishes Drilling Services Division

Explosives and blasting, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , , , ,

Perenti says the DDH1 Limited scheme of arrangement has been implemented today, with the ASX company now having acquired 100% of the issued share capital of DDH1.

Following the completion of the transaction, Perenti has now become one of the largest drilling services companies globally, increasing growth opportunities for the business and its people.

When the deal was announced back in June, Perenti estimated it would create the ASX’s leading diversified contract mining services company, with a pro forma market capitalisation of circa A$1.3 billion (pre-synergies and potential re-rate), positioning Perenti for potential ASX200 inclusion. Perenti added that 85% of its revenue base will be from production and resource definition (rather than exploration), with the company holding a modern fleet with over 190 rigs from DDH1 and 99 from Perenti – one of the largest drill fleets globally.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti, said Perenti is pleased to welcome the DDH1 team members who are joining the Perenti Group today and looks forward to working together to continue to deliver value and certainty for all our stakeholders.

“The acquisition of DDH1 is a very important milestone in the continued growth and evolution of Perenti, and we are very pleased to welcome the circa 2,000 DDH1 employees, their four highly respected brands of DDH1 Drilling, Strike Drilling, Ranger Drilling and Swick Mining Services along with their expansive client base into the wider Perenti Group. DDH1 leverages and builds on nearly 40 years of drilling expertise that our Ausdrill brand holds, enabling Perenti to establish a stand-alone Drilling Services Division of significant scale and global relevance. Perenti is now one of the largest drilling services contractors globally offering a complete range of underground and surface drilling services, including specialisation in deep directional drilling.

“With the completion of the acquisition, we look forward to demonstrating the significant value proposition that the combination of Perenti and DDH1 can offer to all our stakeholders, and we expect to provide the market with consolidated financial year 2024 guidance in November.”

Perenti looks to create ASX’s leading diversified contract mining services company with DDH1 buy

Explosives and blasting, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , , , ,

Perenti has entered into an agreement under which it will acquire 100% of the issued share capital of DDH1 Limited, a surface and underground mining contractor, subject to satisfaction of conditions.

DDH1 brings significant capability across a range of specialised surface and underground drilling services that complement Perenti’s existing service offering, Perenti says. This will see it benefit from increased scale, and the ability to leverage the operational and financial strengths of both companies. This will enable improved margins and increased free cash flow, which will accelerate the delivery of our FY25 financial targets.

Following the completion of the transaction, which is subject to DDH1 shareholder approval and other conditions, Perenti will become one of the largest drilling services companies globally, increasing growth opportunities for the business and its people, it says.

Perenti estimated that it would create the ASX’s leading diversified contract mining services company, with a pro forma market capitalisation of circa A$1.3 billion ($868 million, pre-synergies and potential re-rate), positioning Perenti for potential ASX200 inclusion. Perenti added that 85% of its revenue base will be from production and resource definition (rather than exploration), with the company holding a modern fleet with over 190 rigs from DDH1 and 99 from Perenti – one of the largest drill fleets globally.

In 2021, DDH1 combined with Swick Mining Services to create, they said, a global scale mineral drilling business with a balance of surface and underground services.

Mark Norwell, Managing Director & CEO of Perenti, said: “This is a compelling transaction that represents an exciting next step in delivering on Perenti’s purpose, to create enduring value and certainty, by building a portfolio of complementary high quality businesses.

“Perenti has a long history in drilling from its Ausdrill heritage and Barminco Diamond Drilling business and understands the attractiveness of the market.

“The long-term outlook for a sustained production cycle needs increased drilling spend to ensure mining reserves are not diminished, and drilling is becoming more complex, resulting in larger programs and demand for specialist services.

“DDH1 is a highly respected Tier 1 global operator, with significant capabilities across a complete range of specialised surface and underground drilling services, that are complementary to our existing clients and service offering.

“We have a clearly articulated framework against which we assess all investment opportunities, with this transaction addressing our key assessment criteria in relation to strategic attractiveness, fit within Perenti and value creation potential.”

Following the transaction, the DDH1 business will form part of a newly created Drilling Services Division, which will also comprise Perenti’s existing Ausdrill business. Sy Van Dyk (current Managing Director & CEO of DDH1), will be appointed as President of the newly created division. Each of the four existing DDH1 brands, DDH1 Drilling, Ranger Drilling, Strike Drilling and Swick Mining Services, will be maintained and led by their existing leadership teams, with a focus on providing a consistent offering and customer continuity.

Perenti hopes to close the deal in October based on its indicative timetable.

Orexplore ready to build global technology company following ASX debut

Mineral exploration, Mining finance, Mining mergers and acquisitions, Mining services, Mining software, , , , , ,

Orexplore Technologies has commenced trading on the Australian Securities Exchange (ASX), following its demerger from Swick Mining Services Limited.

As part of this process, the company raised A$2.44 million ($1.76 million) at A$0.25 per share from existing Swick shareholders through a priority offer of shares, in addition to the A$12 million seed funding amount through the Swick demerger.

The demerger and listing will allow the mineral scanning technology company to accelerate its business and technology strategies, focused on the commercialisation of its technology platform through targeted customer “value propositions” across the mining value chain, it said.

Established in Sweden in 2010, and headquartered in Perth, Western Australia, the company is focused on accelerating market traction, and advancing the commercialisation of its non-destructive core-scanning technology across the mining value chain. Its flagship offering, the field-based core sensing GeoCore X10® product and remote Orexplore Insight software, enables a very rapid “drilled to insight” duration, connecting geological decision makers anywhere in the world to drilled core from exploration and deposits potentially hours after extraction, according to the company. GeoCore X10, specifically, is a transportable X-ray rock mass scanning technology that converts drill core samples into a 3D dataset to provide a “through the rock” image of internal structures and texture in addition to elemental detections and density.

With its strong research and development capability, Orexplore is actively advancing the existing hardware and software technologies to bolster its competitive IP portfolio, with research and development remaining critical to the business, it said.

Swick Mining Services has been looking to spinoff this unit since late 2020 following a strategic review.

Orexplore is seeking to capitalise on its research and development program and fleet of 12 GeoCore units, as it looks to capture opportunities across the global mineral sensing and analysis market. Orexplore GeoCore X10 units are currently being trialled at customer sites and the company’s laboratories across Western Australia and Europe, with company continuing to advance its customer collaborations and engagements.

Orexplore’s Chair, Dr Alan Bye, said: “Resource characterisation is fundamental to the success of exploration, extraction and mine closure. The mining industry is adopting digital sensors and analytics to improve productivity and Orexplore has the potential to add significant value to mining exploration and operations. We are excited to become a listed company and thank our shareholders for their support.”

Orexplore’s Managing Director, Brett Giroud, said: “We are fortunate to be building on a strong base of advanced research and development from our origins in Stockholm. With a healthy balance sheet, a rapidly advancing technology platform, and a highly skilled team, we are well positioned to create shareholder value as we aim to build a global technology company.”

Swick Mining and DDH1 Ltd to combine surface and underground drilling offering

Mining mergers and acquisitions, Mining services, , , , , ,

Swick Mining Services and DDH1 Ltd have agreed in-principle terms to combine their businesses to create, they say, a global scale mineral drilling business with a balance of surface and underground services.

The conditional, non-binding indicative proposal is part of a planned all-scrip transaction where Swick shareholders would receive 0.2970 DDH1 shares for each Swick share held.

The proposed transaction values Swick’s Drilling Business at an enterprise value of A$115 million ($84.1 million). After deducting Swick’s planned A$12 million Orexplore investment and the net debt within the Drilling Business, the remaining equity value of A$99.3 million equates to the offer value of approximately $0.35 per Swick share.

Swick and DDH1 offer complementary drilling services and expertise, with long established successful track records working with a wide range of exploration and mining companies, they say.

“There is merit in a merger of the two companies, both in terms of cost synergies and scale benefits,” they added. “The combination is expected to realise meaningful synergies over time, with both sets of shareholders able to benefit due to the all-scrip consideration.”

The combination of the two Western Australia-based businesses will have a balance of surface (circa-60%) and underground (circa-40%) drilling from a combined fleet of 170-plus rigs, which generated approximately A$445 million in revenue and A$103 million in EBITDA in the 2021 financial year to June 30, 2021.

The proposed transaction is conditional on, among other things, negotiation of a binding Scheme Implementation Agreement between the parties, which is expected to occur shortly. The transaction is then expected to complete following the completion of the Orexplore demerger – anticipated to occur after a shareholder vote expected in December.

Swick’s Chairman, Andrew Simpson, said: “A combination of two market leading Australian drilling business – Swick and DDH1 – makes strategic sense and combines high quality, experienced expertise in underground and surface drilling. For Swick shareholders, the proposed transaction will enable them to benefit from their ownership in the enlarged group, while also realising value of the Orexplore business in the form of a new ASX listing.”

Swick’s Managing Director, Kent Swick, added: “We have grown Swick to become the largest underground drilling contractor in Australia with a market leading position, defined by solid margins and established top-tier clients throughout the years both in Australia and internationally.

“There is a strong commercial logic in combining the DDH1 and Swick businesses and being able to offer our customers a complete range of high quality and innovative mineral drilling services from the discovery phase, through to mining and completion. I am very proud that the team at Swick have built a business that has been recognised and valued by another high-quality peer.

“While the transaction is conditional, and there are still additional steps to undertake, the board will continue to act in the best interests of Swick shareholders.”

Swick to start testing prototype fully-electric mobile diamond drill rig in October

Automation, Environmental, Mining equipment, Mining services, Power supply for mines, , , ,

A prototype of Swick Mining Services’ Gen3 E-Rig, the first fully-electric mobile diamond drill rig in the global market Swick says, will soon start testing at a mine site in Western Australia, the ASX-listed contractor reported in its financial year 2021 results.

The company recently established the Future of Drilling ‘Futures’ department to provide clients with “significant ESG (environmental, social and governance) solutions to lower the carbon footprint of drilling and improve safety through automation”.

As part of the division, the company has been building its Gen3 E-Rig, set to reduce the carbon footprint of underground core drilling by around 50% per metre drilled, Swick says.

Swick says the first prototype is set to be tested at a client’s site in Western Australia in October, with the fully proven electric rig set to be available for Swick’s engineering department to “construct in volumes” by the start of its 2023 financial year.

Swick’s Futures department is also developing a remote control drilling (RCD) system to allow drillers to operate rigs remotely through video-linked controls from surface effectively and safely for up to “24 hours a day of productive time”.

The key inputs of the RCD program are automation, surface to underground high speed communication and semi-autonomous rod handling.

The automation software developed in-house has been delivered and optimised during the company’s 2021 financial year and is now ready for application, it says. “Communication architecture” is now available from third parties, leaving the semi-autonomous rod handling as the last key system design to work on.

“Although the benefits of RCD are evident, Swick expects the implementation of RCD to ramp up over time as the mines get deeper and non-productive time increases and the working environments get more challenging for personnel due to temperature gradients at depth,” it said.

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

IoT, Mineral exploration, Mining equipment, Mining services, Precious metals, , , ,

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.

Swick Mining Services goes all-in on underground drilling

Automation, Mineral exploration, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , , , , , , ,

Swick Mining Services has decided to sell its surface drilling business and concentrate on underground mining in a move Managing Director, Kent Swick, says is a logical step for the company “aligned with our strategy”.

The Surface Reverse Circulation (RC) Drilling business is being sold to K-Drill Pty Ltd and K-Drill Equipment Pty Ltd.

The sale includes six surface RC rigs, associated equipment, inventory, personnel and contracts, with the transaction expected to complete in the March quarter of 2021.

Including the recent sale of a number of residual RC assets to other parties, Swick will receive total proceeds for its RC business and assets of around A$6.4 million ($4.8 million) in cash and will report a profit on sale of some A$1.2 million before tax, it said.

K-Drill is a new RC drilling company that will be specialising in providing high quality, safe and productive drilling solutions to the Australian mining industry, Swick said. It will be building on the foundations set by Swick and will be led by Managing Director, Brendan O’Shea, who is Swick’s current Business Development Manager.

The Surface RC Drilling business provides reserve definition and exploration drilling to clients and its sale enables Swick to focus on its core Underground Diamond (UD) Drilling business; a 70-rig fleet providing reserve definition and grade control drilling at producing mines. This business represents 96% of annual revenue, Swick says.

O’Shea said: “This opportunity will allow K-Drill to focus completely on surface drilling and we are pleased to provide clients with peace of mind in knowing that we will be bringing all current Swick RC employees and Swick’s existing robust operating systems to K-Drill, ensuring a smooth transition for existing clients.”

After the disposal of the RC division, Swick’s drilling revenue will be generated entirely by the company’s UD Drilling division. This division drills around 100,000 m/mth of core across four countries – Australia, USA, Portugal and Spain. It is on track to deliver a forecasted revenue of A$68-$70 million, with utilisation remaining strong with 13 rigs operating internationally, 25 in Western Australia (including two DeepEX rigs) and 20 across the rest of Australia in December 2020.

On top of the Surface RC drilling business sale, and in response to increased market demand, Swick has agreed to manufacture and sell its “world-class” GenII mobile drill rigs, it said. These rigs are the smallest footprint, but highest-powered mobile drill available on the market, according to Swick, with many unique features including a “world-class automation package”.

Four GenII rigs are currently under construction for two large global drilling contractors for use outside of Australia, Swick said.

In response to increased demand for drill rigs from both Swick’s in-house drilling division and expected interest by external customers, Swick is gearing up its engineering facility at its South Guildford, Western Australia headquarters, to meet this demand, it said.

Swick Engineering has appointed an experienced senior mechanical engineer for the role of Production Manger that will manage the engineering business and oversee the efficient builds and rebuilds of the GenII drills.

Jason Marinko to lead new Orexplore Technologies business

IoT, Mineral exploration, Mining people, Mining services, Mining software, , , , , ,

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

Base metals, IoT, Mine operation news, Mineral exploration, Mining equipment, Mining services, Precious metals, , , , , , , , ,

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

Base metals, Mine operation news, Mineral exploration, Mining consumables, Mining equipment, Mining services, Precious metals, , , , , , , , , , , , ,

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.”