Major Drilling Announces Purchase of Forage à Diamant Benoit Ltée
MONCTON, NB, Aug. 1 /CNW/ – Major Drilling Group International Inc. (TSX: MDI) ("Major Drilling" or the "Company") is pleased to announce that it has today completed the purchase of the exploration drilling company Forage à Diamant Benoit Ltée ("Benoit") based in Val-d'Or, Québec (Canada) for an aggregate purchase price of $21,000,000 (consisting of approximately $17.5 million in cash and $3.5 million in liabilities) subject to customary price adjustments.
Through this purchase Major Drilling has acquired 19 drills rigs, the majority of which have deep hole capacity and are fitted with rod handlers, which fits with the Company's strategic focus on specialized drilling. In addition to the rigs, this acquisition involves support equipment and inventory, existing contracts, and personnel. Subsequent to the acquisition, Major Drilling will have a total fleet of 42 mineral exploration drill rigs in Québec. Management anticipates that the operations of Benoit will produce additional annual revenue of approximately $26 million and additional EBITDA of approximately $7 million for the twelve months subsequent to the acquisition.
The purchase price is payable, in total, by way of cash consideration financed through existing credit facilities of the Company, and is subject to certain holdbacks.
Francis McGuire, President and CEO of Major Drilling, stated "We are very pleased to welcome Forage Benoit and its employees into the Major Drilling group. This acquisition provides us with additional assets, experienced drillers and existing contracts in Québec. Benoit has operated successfully in the Quebec/Ontario marketplace for some 40 years, and has a strong reputation with its clients."
Mr. McGuire added "We believe that from the perspective of resources and resource potential, political risk, and financial incentives to the mining industry, Quebec is one of the best jurisdictions in the world for mining companies to do business. We remain very optimistic about the continuing growth potential of this region. Also, given the strong demand and the Company's favorable financial position, the Company still expects net capital expenditures to reach a record of $80 million in fiscal 2009, above and beyond the purchase price for this acquisition."
Some of the statements contained in this press release may be forward-looking statements, such as estimates and statements that describe or are with respect to the future price of minerals and metals, the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition to exist or occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements by reason of factors such as, but not limited to, the factors set out in the discussion starting on pages 21 to 24 of the 2008 Annual Report entitled "General Risks and Uncertainties", as filed with the Canadian Securities Commission (available on SEDAR at www.sedar.com). All such factors should be considered carefully when making decisions with respect to the Company. The Company does not undertake to update any forward-looking statements, including those statements that are incorporated by reference herein, whether written or oral, that may be made from time to time by or on its behalf, except in accordance with applicable securities laws.
Based in Moncton, New Brunswick, Major Drilling Group International Inc. is one of the world's largest metals and minerals contract drilling service companies. To support its customers' mining operations and mineral exploration activities, Major Drilling maintains operations in Canada, the United States, South and Central America, Australia, Indonesia, Mongolia, Armenia, and Africa.
For further information: Denis Larocque, Chief Financial Officer, (506) 857-8636, Fax: (506) 857-9211, [email protected]