UPDATE 1-PDAC-Cautious miners pull Major Drilling to loss

Mon Mar 4, 2013 8:45pm EST
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* Major Drilling posts loss, sees volatility hitting revenue

* Miners have delayed or canceled exploration programs

* Major Drilling ranks world's No. 2 exploration driller

By Euan Rocha and Julie Gordon

TORONTO, March 4 (Reuters) - A growing sense of caution gripping the mining industry is having a big impact on exploration service providers such as Major Drilling Group International Inc, which posted a quarterly loss on Monday and offered little hope of an early turnaround.

The mining sector's new emphasis on austerity in the face of stagnant metal prices has led to a sharp pullback in exploration spending. Juniors and more established miners alike have delayed or canceled exploration programs, clouding the outlook for Major and its rivals for years.

Major Drilling Chief Executive Francis McGuire, speaking on the sidelines of the Prospectors and Developers Association of Canada (PDAC) convention in Toronto, said he saw some potential for a brighter outlook during mid-year, but a full turnaround depended largely on the return of small explorers to the market.

"We are not going to see the peaks of activity in the exploration markets that we saw in the first half of 2012, which was an all-time high," he said. "It's going to take several years before we get back there. It really takes the juniors to come back in."

His comments followed the release of a study by SNL Metals Economics Group warning that a three-year surge in exploration spending would likely come to a grinding halt this year.   Continued...