Canada-based Major Drilling revenue just shot up 22%

Canadian company Major Drilling (TSX:MDI) has just released its Q3 results for 2017 and the numbers, a 22% increase in revenue, suggest the mining industry is firmly on the way back.

Quarterly revenue reached US$84 million up from $69.1 million recorded for the same period last year, while net cash increased a small amount and net losses were lower by nearly a third.

Major Drilling CEO Denis Larocque said activity levels were improving month by month and growth was coming from all regions.

“Although we are still very early in the cyclical recovery it has been a steady climb over the last 18 months,” said Larocque. “This year, growth has been driven primarily by gold projects as senior gold companies have increased their exploration budgets, on average, by more than 20%.”

Larocque added that the company is also receiving more inquiries for base metal projects as related commodity prices continue to recover indicating an anticipated increase in exploration budgets for 2018.

Major Drilling’s revenue increase was boosted by improved performances across North America, South and Central America as well as from Asian and African operations.

The predominantly copper and gold driller boss outlined that the majority of commodities are going to face a supply and demand imbalance in the near term due to dwindling reserves and a lack of exploration.

“Mineral reserves of 10 of the top senior gold mining companies have decreased by almost 15% over the last two years,” Larocque explained.

“As well, many industry experts expect the copper market will face a deficit position in the next few years, due to the continued production and high grading of mines, combined with the lack of exploration work conducted to replace reserves.

“Therefore it is expected that at some point in the near future, the need to develop resources in areas that are increasingly difficult to access will significantly increase, at which time we expect to see a resurgence in demand for specialised drilling.”