Swick extends Northern Star relationship

LEADING underground drilling contractor Swick Mining Services’ preliminary FY20 drilling business EBITDA of about A$25 million, including “a short‐term impact of COVID‐19”, compares with $28.2 million for FY19. Meanwhile, the company says contract extensions at the Jundee gold mine in Western Australia, its biggest existing engagement, and Broken Hill in New South Wales have given it a $244 million order book heading into FY21.
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Swick drilled 2.35 million metres of underground core at Jundee, and counting

Staff reporter

The order book total compares with circa-$350 million this time last year.

The company has 15 drill rigs - nearly a quarter of its total fleet - deployed at Jundee, where it has worked for 15 years. It says the latest two-year contract extension, with a two-year option, was awarded "at Swick's target margins after a competitive tender process".

A two-year extension at Perilya's Broken Hill lead-zinc operation prolongs Swick's involvement at the historic mine which goes back to 2009. It currently has four rigs working at Broken Hill.

Swick has also confirmed the prospective demerger of its drilling and mineral scanning technology businesses at "an appropriate point in time" after a recent strategic review and following completion of successful trials of the Orexplore core analysis technology by Boliden in Sweden and Sandfire Resources in Western Australia.

"Swick has drilled more than 2.35 million metres of underground core at Jundee since we started work in 2007, 1.45 million of which are attributed to the current owners Northern Star Resources. The Jundee scope is one of the largest underground drilling programs in the world," said Swick Mining founder and CEO, Kent Swick.

"The renewal at Jundee also includes scope for our specialist DeepEX underground mobile rigs that are specially constructed for deeper underground drilling and have completed holes up to 1,607m in depth at site to date. The contract renewal further strengthens our relationship with our key customer Northern Star Resources, whom we also work for at the Pogo mine in Alaska."

Swick shares closed at 18c, valuing the company at $54.3 million.