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Drilling companies report an uptick in business

Finding experienced drillers cited as major challenge Drilling companies report a slightly improved volume of business in 2017 and are optimistic about 2018, but worried about the shortage of experienced drillers.
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Drilling companies report an increase in volume for 2017 and are optimistic about this year, but pricing remains competitive and a shortage of experienced drillers has everyone in the industry worried.

Finding experienced drillers cited as major challenge

Drilling companies report a slightly improved volume of business in 2017 and are optimistic about 2018, but worried about the shortage of experienced drillers.

“The real problem is people,” said Denis Larocque, CEO of Moncton, New Brunswick-based Major Drilling, which serves Ontario from branches in Timmins, Sudbury and Rouyn-Noranda, Quebec.

“We’re already facing issues finding drillers, especially in Central Canada. Everybody’s competing for talent. We’ve had such a long downturn that we lost a lot of good people who took other jobs. We’re going to struggle bringing people back.”

Larocque estimates that exploration budgets for senior gold mining companies were up 20 per cent in 2017.

“That’s helped,” he said, “but most drilling companies are still losing money at those levels. This year is going to be better. We already know that from what we have in hand and from talking to people. However, utilization rates are still hovering at approximately 33 per cent.

Boart Longyear, which serves Ontario from its base in Haileybury, also sees an uptick in business and echoes Larocque’s concerns about the shortage of drillers.

“We’ve seen some pretty hard times for five years, but there was a bit more drilling in 2017,” said Ian Cadieux, senior commercial manager. “Because there were a lot of idle drills, the pricing was very competitive, and that’s still the case.

“I think what’s happening is that reserves are being depleted and mining companies have no choice but to drill. They recognize that we’re at the start of an uptick, so the bigger companies want to lock in a provider for a long-term contract at a low price while they still can.

“In general, it’s refreshing to see some bigger RFPs and drilling programs out there. Pricing will remain competitive through 2018, but we’re looking forward to better times in 2019,” said Cadieux.

Spektra Drilling, a Turkish-based company that entered the Canadian market in 2012, does most of its work in Quebec and in the Kirkland Lake-Matachewan region across the border in Ontario, but has recently hired Barb Elinesky, former owner of Northstar Drilling to drum up business in northwestern Ontario.

Spektra, which entered the Canadian market by acquiring Forage Mercier in Val d’Or, Quebec, reported its best year to date last year and expects 2018 to be even better, but also sees problems recruiting experienced drillers.

Rigs are not a problem, said corporate manager Christian Baril. “We could have 20 rigs tomorrow morning, but we would have a challenge finding qualified staff to operate them.”