Drilling rebound will spur their gains

Article Excerpt

MAJOR DRILLING $4.90 (Toronto symbol MDI; TSINetwork Rating: Speculative) (1-866-264-3986; www.majordrilling.com; Shares outstanding: 80.3 million; Market cap: $393.5 million; No dividends paid) is a large contract driller that mainly serves the mining industry. Major believes that mining activity continues to deplete the world’s more easily accessible mineral reserves. That means attractive deposits will increasingly be in remote locations. Those areas are difficult to access or they’re where the mineral is deep in the ground. For this reason, Major’s strategy is to focus on its highly specialized drilling services. Demand for that kind of assistance, especially from senior gold miners, is beginning to recover. In the three months ended July 31, 2018, the company’s revenue rose 17.3%, to $98.5 million from $84.0 million a year earlier. More specifically, revenue in the Canada/U.S. region decreased 1.7% to $51.3 million, although revenue in South and Central America jumped 41.3%, to $26.7 million (largely from Chilean copper projects). In addition, revenue in Asia and Africa climbed 58.1%, to $20.4 million. The…

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