When DDH1 listed on the ASX in March 2021, company co-founder Murray Pollock joked to Investor Insight that having empty yards was the best kind of problem a drilling company could have.
The continuation of an extraordinary exploration boom – across core commodities led by gold and the battery minerals of nickel, copper and lithium – has made for perfect market conditions for quality drillers like DDH1 (ASX: DDH1) but also presented challenges on satisfying clients and prospective clients’ demands for access to rigs and crews.
DDH1 has the most technologically advanced and one of the largest surface drill rig fleets in Australia – and could soon have a few more empty yards, too.
This week, DDH1 announced its intention to acquire another Perth driller, underground specialist Swick Mining Services, to create the owner and operator of the country’s largest mineral drill rig fleet.
In other news:
- Lykos Metals closes its IPO, prepares to list on the ASX
- Westgold takes issues with Gascoyne “enhanced business plan”
- John Mullumby joins as Gold Road’s CFO
- Buru Energy completes Ungani oil lift
- Rare earths play Hastings delivers maiden Sustainability Report
- Catalyst Metals’ Henty mine delivers to gold plan
- Aeris delivers more positive Constellation news
- Diamond rig drilling at St George’s Mt Alexander
- DDH1 announced in-principle deal to acquire Perth drill peer Swick
DDH1’s agreed share-swap terms with Swick (ASX: SWK) value the target at $115 million on an enterprise basis. Both sides are now working towards a Scheme Implementation Agreement, expected in coming weeks.
Battery metals are driving a record-breaking exploration boom as companies scramble to meet the supply demands of the EV revolution, and those who can get hold of rigs are reaping the rewards.
St George Mining (ASX: SGQ) this week returned to drill at the high-grade Mt Alexander nickel-copper sulphide project in WA while on the other side of the Nullarbor Aeris Resources (ASX: AIS) reported further strong hits at the ever-growing Constellation discovery, part of its Tritton copper operations in NSW.
Artemis Resources (ASX: ARV) is preparing to drill its Paterson Central gold-copper prospect in the East Pilbara and Australia’s next rare earths producer Hastings Technology Metals (ASX: HAS) has begun a resource extension and in-fill drill campaign at its Yangibana project in WA’s Gascoyne region to underpin a mine life extension.
If DDH1 completes its acquisition of Swick, it will bump the number of rigs in the company’s fleet from 98 to more than 170 rigs. Not only would this make DDH1’s the largest drill rig fleet in the country but it would also fill a gap in the company’s arsenal by introducing a world-class underground fleet.
DDH1 said the proposed deal with Swick was in line with its strategy of “pursuing new growth opportunities, driving higher rig utilisation and rate increases, expanding its industry leading fleet and pursuing acquisitions that can deliver a strategic advantage and enhanced value for shareholders”.
DDH1 said that integrating Swick into its business would create a global-scale operator with pro-forma annual revenues of about $445 million and pro-forma FY21 EBITDA of $103 million.
There certainly is no letting up the drilling excitement.
St George this week returned to WA’s north-eastern Goldfields to drill multiple, deeper nickel-copper sulphide targets at the Investigators and West End prospects at the high-grade Mt Alexander project.
The John Prineas-led company will drill 24/7 as it continues to build its knowledge of the ore bodies at Mt Alexander. This latest push, which will include at least four holes, will test the down-plunge continuity of the high-grade discovery in MAD199 – the first deep find at the project.
Mr Prineas said that ongoing, systematic exploration at West End and Investigators has produced excellent results to date, including the MAD199 discovery, and a growing number of downhole Electromagnetic (EM) conductors.
“These results all point to a very large and fertile mineral system at West End and Investigators that has the potential to host a significant volume of mineralisation,” Mr Prineas said.
“This area remains underexplored and only lightly drilled, providing an opportunity for further drilling to deliver exciting discoveries to expand the mineralised footprint that we have identified at Mt Alexander.”
For Aeris, Constellation has breathed some fresh life into its Tritton operation at just the right time in the copper cycle. Constellation, only discovered a year ago, continues to “surprise on the upside”, Aeris executive chairman Andre Labuschagne told investors this week.
The company said that the latest assay results from the RC program at Constellation showed shallow sulphide mineralisation with high copper grades and that, additionally, the diamond drilling program into the deeper sulphide mineralisation has now extended the strike extent to 300m.
“The deposit is now clearly evolving into zones of oxide, supergene and primary (sulphide) copper mineralisation, and within each of these zones there are areas with high copper and/or gold enrichment,” Mr Labuschagne said.
“The assays from the RC program are being prioritised over those from the diamond drilling program.”
Aeris aims to bring forward the mineral resource estimates for the supergene and oxide sections of the ore body to December 2021-January 2022 and is targeting a maiden Mineral Resource for the sulphide mineralisation by end of March 2022.
