Major Drilling earnings surge on gold juniors revival
Major Drilling Group International (TSX: MDI) on Monday reported results for its first quarter of fiscal year 2020. Earnings before interest, taxes, depreciation and amortization (EBITDA) were up 78% to C$18.0 million for the quarter as compared to the same period last year.
The company posted net earnings of C$6.0 million or C$0.08 per share for the quarter, compared to a net loss of C$2.5 million or C$0.03 per share for the prior-year quarter.
During the quarter, the company was able to grow its market share in most sectors. “Each of our regions delivered good increases in revenue as compared to last year and marked improvement in profitability,” President Denis Larocque stated in the company’s Q1 earnings release.
Larocque also provided a positive outlook for the company heading into the second quarter, which he attributes to the current state of the commodity market.
“The price of gold, which historically has accounted for approximately 50% of the company’s drilling activity, has increased by 15-20% over the last three months,” Larocque pointed out.
“We could see a pickup in junior financing in the coming months, although a potential increase will not translate into immediate drilling activity as it usually takes a few months to get a drilling campaign organized.”
“In regards to base metals, due to economic uncertainty, copper prices have been depressed, down some 5% over the quarter. Despite this, we have increased our activity with senior copper producers as they need to replenish their reserves as they face a supply deficit in the coming years,” he added.