March 4, 2009 / 7:00 PM / in 9 years

Major Drilling expects 2nd half metals revival

TORONTO, March 4 (Reuters) - Major Drilling (MDI.TO), the world’s No. 2 mine drilling company, sees tough slogging this year, but expects activity in the hard hit mining sector to start to pick up in the second half.

On a conference call to discuss the company’s third-quarter results on Wednesday, officials said that despite recent cancellations of exploration plans, some customers have signaled they may consider restarting projects in a few months.

“I think it’s clear that in the first six months of this calendar year, everybody’s going to be extremely cautious,” said Francis McGuire, the company’s chief executive.

“(But) we will see an uptick in activity in the second half. It won’t be a huge one, but there will be an uptick.”

For the quarter ended Jan. 31, Major Drilling posted a loss of C$5.1 million ($4 million), down from a year-earlier profit of C$7.2 million, as the company was hit by a wave of delays and cancellations due to plunging base metals prices and tight credit conditions.

McGuire said he has been getting particularly strong signs from copper customers that they may make positive decisions on exploration in the near future.

“They seem to believe, (or) hope, that there might be a significant improvement there,” he said.

“But that is still very speculative.”

The company’s shares, which have plunged 80 percent in the past year, were up 2.5 percent at C$11.69 on the Toronto Stock Exchange on Wednesday.

$1=$1.28 Canadian Reporting by Cameron French; Editing by Peter Galloway

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