MONCTON, NB,
July 21, 2014 /CNW/ - Major Drilling
is pleased to announce its entry into the underground
percussive/longhole drilling sector with its agreement to purchase
the operations of Taurus Drilling Services. This business
operates in Canada, the U.S. and
Mexico, providing underground
percussive/longhole drilling to mining company clients.
Through this purchase, Major Drilling will
acquire 39 drill rigs, together with related equipment, inventory
and contracts. In addition to purchasing the drilling assets,
Major Drilling is retaining the operation's management teams, as
well as the other employees, including experienced drillers.
Over the past 12 months the operations of Taurus have produced
revenue of approximately $38 million
and EBITDA of approximately $8
million. The closing of the transaction is currently
scheduled for August 1, 2014, and is
subject to normal closing conditions.
Subject to adjustment under the Agreement, Major
Drilling will pay C$27.7 million on
closing (consisting of $15.9 million
in cash, $7.5 million in Major
Drilling shares and $4.3 million in
assumption of debt) and an additional maximum amount of
C$11.5 million tied to
performance. The additional payout period extends for three
years, commencing on August 1, 2014,
and payments are contingent on growing EBITDA run rates above
current levels.
"We are very pleased to welcome Taurus Drilling
Services and its employees into the Major Drilling group. The
Taurus acquisition opens the door to additional diversification in
the mining industry as percussive longhole drilling is more related
to the production function of a mine. Offering both
underground production drilling and our existing underground core
drilling, we can now provide an even wider range of complimentary
services to our clients," stated Francis
McGuire, President and CEO of Major Drilling.
Some of the statements contained in this press
release may be forward-looking statements, such as, but not limited
to the closing of the Taurus acquisition, those relating to
worldwide demand for gold and base metals and overall commodity
prices, the level of activity in the minerals and metals industry
and the demand for the Company's services, the Canadian and
international economic environments, the Company's ability to
attract and retain customers and to manage its assets and operating
costs, sources of funding for its clients, particularly for junior
mining companies, competitive pressures, currency movements, which
can affect the Company's revenue in Canadian dollars, the
geographic distribution of the Company's operations, the impact of
operational changes, changes in jurisdictions in which the Company
operates (including changes in regulation), failure by
counterparties to fulfill contractual obligations, and other
factors as may be set forth, as well as objectives or goals, and
including words to the effect that the Company or management
expects a stated condition to exist or occur. Since forward-looking
statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Actual
results in each case could differ materially from those currently
anticipated in such statements by reason of factors such as, but
not limited to, the factors set out in the discussion on pages 15
to 18 of the 2014 Annual Report entitled "General Risks and
Uncertainties", and such other documents as available on SEDAR at
www.sedar.com. All such factors should be considered carefully when
making decisions with respect to the Company. The Company does not
undertake to update any forward-looking statements, including those
statements that are incorporated by reference herein, whether
written or oral, that may be made from time to time by or on its
behalf, except in accordance with applicable securities laws.
Based in Moncton, New
Brunswick, Major Drilling Group International Inc. is one of
the world's largest metals and minerals contract drilling service
companies. To support its customers' varied exploration drilling
requirements, Major Drilling maintains field operations and offices
in Canada, the United States, Mexico, South
America, Asia, and
Africa.
SOURCE MAJOR DRILLING GROUP INTERNATIONAL INC.