Suppliers Roundup (July 26, 2004)

Major boosts revenues

Major Drilling Group posted record annual revenue of $193.8 million for the fiscal year ended April 30, or 20% more than a year earlier.

The increase reflects higher metals prices, which in turn have given rise to more exploration drilling.

Net earnings for fiscal 2004 were $5.5 million, or 27 per share, compared with $2.5 million, or 16, in 2003.

“The increased revenues reflect the strong underlying cyclical upturn in the metals and minerals sector and in drilling demand,” says Major Drilling President Francis McGuire. “The pace of growth was higher than expected.”

Major Drilling is especially active in Mongolia, though growth was also reported in Indonesia and Tanzania. Revenues from Australian operations fell somewhat, as a result of seasonal weather.

Earlier this year, Major acquired the assets of Australia-based Raematt Drilling. The deal brought with it a range of new contracts and underground drill rigs.

Penjom goes with Knelson

The Penjom gold mine of London-based Avocet Mining has ordered a 300-tonne-per-hour KC-XD48 Knelson concentrator from ConSep, the Australasian manufacturing licensee for Vancouver-based Knelson Gravity Solutions.

The new concentrator will make some equipment redundant, including multiple in-line pressurized jigs, a bank of cleaner spirals, and a continuous intensive leach reactor.

The circuit will now consist of a KC-CD30 concentrator and the new KC-XD48, which together will allow Penjom to treat the entire negative-2-mm fraction of the cyclone underflow stream. The concentrate will then be further upgraded on shaking tables before heading to the smelter.

The KC-XD48 will be configured using Knelson’s recently developed concentrate cone selection and configuration system.

Finning, Luscar ink 10-year deal

Under a 10-year agreement, Finning International will supply Luscar with equipment and services for Luscar’s coal mines in Alberta and Saskatchewan.

The deal is worth $25-35 million annually to Finning.

Canada’s largest producer of low-sulphur thermal coal, Luscar operates 10 surface mines in the two provinces. These mines produce bituminous, sub-bituminous and lignite thermal coals.

Meanwhile, Finning will invest $65 million in a “re-manufacturing” centre in Edmonton, where engine components will be rebuilt. The plant will be operated by OEM Remanufacturing.

Finning sells, rents, finances and provides customer support services for Caterpillar equipment and engines in Western Canada, the U.K., and South America.

Leighton builds in Philippines

The contracting subsidiary of Sydney, Australia-based Leighton Holdings has been awarded two projects in the Philippines worth a total of A$110 million.

Leighton Contractors will provide mining services at the Rapu Rapu polymetallic mine in the Philippines. Australian-listed Lafayette Mining holds a 74% interest in Rapu Rapu, with an investment arm of the Korean government holding the remainder. Calgary-based TVI Pacific holds a 2.5% net smelter return royalty. Building the mine will take about 13 months, with production slated to start in mid-2005.

Annual production at Rapu Rapu is projected to be 10,000 tonnes copper in concentrates, 14,000 tonnes zinc in concentrates, 50,000 oz. gold, and 600,000 oz. silver. Production is projected over a 6-year period.