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Driller says revenues are up, thanks gold

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(Kitco News) - Major Drilling said yesterday that quarterly revenue was $117.5 million, better than 19% from the same quarter last year.

The company reported that EBITDA was up 78% to $18.0 million, and net earnings were $6.0 million or 8 cents per share.

"The price of gold, which historically has accounted for approximately 50% of the company's drilling activity, has increased by 15-20% over the last three months and we could see a pickup in junior financing in the coming months, although a potential increase will not translate into immediate drilling activity as it usually takes a few months to get a drilling campaign organized," said Denis Larocque, President and CEO of Major Drilling.

Larocque said Drilling was up in all regions. The company's work has shifted to bigger companies, while work from juniors has lagged.

While gold is up, base metals miners and juniors are doing less well with the slump in commodity prices.

"Despite this, we have increased our activity with senior copper producers as they need to replenish their reserves as they face a supply deficit in the coming years. Prices for drilling services continue to improve, although these improvements are always initially offset somewhat by an increase in labor and mobilization costs."

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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