Suppliers News (September 11, 2006)

Boart buys driller, banks buy bit of Boart

Boart Longyear, one of the world’s largest providers of drilling services and equipment, is getting even bigger. The drilling powerhouse is buying Perth, Western Australia-based DrillCorp from Avatar Industries (avr-a).

The deal is expected to close in October. The sale is subject to the approval of Avatar shareholders but directors of Avatar, who own or control about 60% of the shares outstanding, are recommending that shareholders vote in favour of Boart’s offer.

DrillCorp employs 250 people and operates 22 multi-purpose diamond core drills and five reverse-circulation rigs, mostly on surface drilling operations throughout the region. Boart Longyear has a presence in the area, but chieftly provides underground drilling services.

It’s not Boart’s first purchase of a surface driller in Western Australia. The company recently bought North West Drilling, a privately owned drilling business with a fleet of eight surface drills.

Salt Lake City, Utah-based Boart says it can now offer customers a “complete suite of drilling services” in the area.

“We see this as a growth opportunity in one of the world’s largest markets for drilling services,” says Paul Brunner, CEO of Boart Longyear.

Meanwhile, Australia’s Macquarie Bank and other institutional investors are taking an equity interest in Boart Longyear.

Boart Longyear had revenue of more than US$1 billion in 2005, with about 7,000 employees worldwide.

Advent International, a global private equity firm, and its investment partner, Bain Capital, acquired Boart Longyear from Anglo American (aauk-q) in July 2005. Together, Advent and Bain will remain the largest shareholders in Boart Longyear.

The drilling company’s Australian head office is in Adelaide and the business operates from regional centres throughout the country.

BioteQ’s Raglan plant performing well

Vancouver-based BioteQ Environmental Technologies (BQE-V, BTQNF-O) says its patented Biosulphide plant at Falconbridge’s (FAL-T) Raglan mine in northern Quebec is operating above design capacity.

The plant started discharging treated water in early May, about one month earlier than last year. It’s now consistently treating more than 140,000 cubic metres of water monthly. The system was originally designed to treat 530,000 cubic metres of water per year. This has been revised to 700,000 cubic metres.

BioteQ and Falconbridge have agreed to an increase in the treatment fee to $1.12 per cubic metre of treated water from $1.06. The monthly capital fee may also change.

Meanwhile, a problem with the bioreactor at the former Bisbee copper mine in Arizona resulted in less copper production during late May and throughout June.

BioteQ says the plant is once again operating normally, recovering 5,000 lbs. of copper per day. Production during the second quarter was 303,000 lbs. copper from 102 million gallons of water.

Money from copper recovered from Bisbee is shared equally by Phelps Dodge (PD-N) and BioteQ.

BioteQ’s share of revenue for the first quarter of 2006 from Bisbee, after refining charges, was $618,000.

Elsewhere, BioteQ signed a new operating contract with Blue Note Metals (BNT-V), after the junior bought the Caribou and Restigouche mines from CanZinco, a subsidiary of Breakwater Resources (BWR-T, BWLRF-O). The Caribou plant was BioteQ’s first commercial water treatment plant in North America. It was established upstream from a lime treatment plant and, over its first year of operation, beginning in November 2001, recovered 35,000 tonnes of zinc concentrate from water runoff.

Blue Note plans to return both mines to operation. BioteQ received $419,000 to recover capital costs for equipment it provided at the sites.

BioteQ treats acid contaminated water through the use of its patented BioSulphide process.

Katanga hires firms to develop DRC mine

Katanga Mining (KAT-T, KATFF-O) has its ducks in a row to complete the first stage of the engineering and construction work necessary to restart production at Kamoto/Dima copper-cobalt project, situated in Katanga province, Democratic Republic of the Congo.

The work will be carried out by three consulting firms: Hatch, SRK Consulting, and Read, Swatman and Voigt (RSV). These companies helped prepare the recent Kamoto feasibility study.

Hatch will revamp the Luilu metallurgical plant and the Kamoto concentrator. SRK Consulting will design and build the Kamoto and Luilu tailings facilities, and RSV will assist in the detailed analysis of the Kamoto mine infrastructure.

An updated Kamoto Resource is being prepared by Caracle Creek International and Ukwazi Mining Solutions is designing a detailed short-term mine plan, with help from RSV.

SGS adds lab to network

Swiss firm SGS has added another laboratory to what it calls the Advanced Mineralogy Network. The new facility is based in Lakefield, Ont., two hours northeast of Toronto, and has a sister lab in Brisbane, Australia.

Through subsidiary SGS-Lakefield, the new lab will provide mining and metallurgical services using the proprietary QEMSCAN technology, which was developed in Australia by Brisbane-based Intellection.

QEMSCAN costs less than conventional optical mineralogy and SGS says the results from analysis with QEMSCAN are quantitative and repeatable. The company adds that the quality of statistics produced is superior when compared with traditional optical mineralogy.

Founded in 1878, SGS has more than 43,000 employees in a network of almost 1,000 offices and laboratories around the world.