London-listed mining services company Capital has reported an 18.7% year-on-year increase in third-quarter revenue to $73.1-million.

That was also higher than the $71.2-million in revenue earned in the second quarter of this year.

“The third quarter saw Capital again increase revenues, despite seeing typical seasonal weakness compounded by increased asset movement as we repositioned the drilling contract portfolio.

“This is testament to the enhancements the business has made in its service offering over the past two years in particular, and the more robust and less volatile our revenues have become as a result,” Capital executive chairperson Jamie Boyton said on October 18.

Non-drilling revenue contributed 29% of the total revenue for the quarter, compared with 26% in the third quarter of 2021 and 27% in the second quarter of this year.

DRILLING

The average monthly revenue per operating rig (Arpor) of $182 000 remained the same year-on-year, but was an increase of 6.4% on the second quarter Arpor of $171 000.

“Through the quarter, we began repositioning our drilling contract portfolio, not only reducing our exposure to small exploration contracts but also increasing our exposure to tier-one assets, as highlighted with our expanded relationship with [gold miner] B2Gold at Fekola [in Mali], and assets with exciting long-term potential as with [gold miner] Perseus Mining’s Block 14 project [in Sudan],” Boyton said in a trading update to shareholders.

Capital’s drill fleet use increased by 1.3% year-on-year to 77% for the quarter, which was a drop of 9.4% compared with the second quarter of this year owing to typical seasonal weakness, particularly during the wet season in West Africa, and also increased asset mobilisation as Capital began repositioning its contract portfolio.

The repositioning will continue into the fourth quarter, along with some refurbishments on newly acquired rigs at Fekola.

Capital won an expanded drilling services contract with B2Gold at the Fekola gold mine, which will continue to the end of 2024. The services on site now include development through diamond and reverse circulation, as well as grade control drilling.

To facilitate delivery of the new contract, Capital bought ten rigs from African Mining Services (AMS), which is part of the Perenti Group.

A new multi-rig exploration drilling contract was also signed with Perseus Mining at its Block 14 gold project, which will include reverse circulation (RC), diamond and air core drilling.

Another new contract was an RC drilling contract with Evolution Energy Minerals at its Chilalo graphite project, in Tanzania.

As a result, Capital’ s rig count increased from 116 to 127 through the quarter and will increase to about 130 by the end of the year.

Meanwhile, the company’s Sukari gold mine waste mining contract in Egypt achieved a quarterly record of waste mined since the project began.

Boyton highlighted that capital remained active in the tendering pipeline for new contracts.

MSALABS

Capital said the group was continuing to roll out the Chrysos PhotonAssay technology.

MSALABS now has three Chrysos PhotonAssay units commissioned – one each at the Bulyanhulu gold mine, in Tanzania; the Morila gold mine, in Mali; and Val d’Or, in Quebec, Canada.

A fourth unit was being commissioned in Yamoussoukro, in Côte d’Ivoire.

The fifth and sixth units are set to arrive at the Kibali gold mine, in the Democratic Republic of Congo, and at Prince George, in Canada, in the coming weeks, the company said.

An additional unit is still earmarked for Timmins, in Canada, which will be commissioned in the first quarter of next year.

Capital said the increased geographic spread was enabling accelerated PhotonAssay trials with major mining houses. The group said the PhotonAssay continued to be in high demand, giving MSALABS a competitive advantage on the back of Capital’s expanded relationship with Chrysos Corporation to roll out 21 units by 2025.

MSALABS has been awarded a three-year mine site laboratory contract with Shanta Gold at its Singida gold mine, in Tanzania.

Additionally, MSALABS has completed the construction of a laboratory in Bougouni, in Mali, to support gold and lithium operations in southern Mali. The group has also provided additional sample flow for the Chrysos unit at the Morila gold mine, also in Mali.

OUTLOOK

Capital maintained its increased full-year revenue guidance at $280-million to $290-million. It had initially set a guidance of between $270-million and $280-million, but increased that following a solid half-year performance.

The company’s capital expenditure guidance for the full-year is between $60-million and $65-million. This guidance was recently increased from between $50-million and $55-million as a result of the purchase of rigs and other assets from AMS.