Business
Major Drilling Announces Purchase of Forage a Diamant Benoit Ltee
MONCTON, NB, Aug. 1 /CNW/ - Major Drilling Group International Inc. (TSX: MDI) ("Major Drilling" ...
About this update from Major Drilling Group International Inc.
[{"type":"text","content":"\n\n\n\nMONCTON, NB, Aug. 1 /CNW/ - Major Drilling Group International Inc.\n(TSX: MDI) ("Major Drilling" or the "Company") is pleased to announce that it\nhas today completed the purchase of the exploration drilling company Forage a\nDiamant Benoit Ltee ("Benoit") based in Val-d'Or, Quebec (Canada) for an\naggregate purchase price of $21,000,000 (consisting of approximately\n$17.5 million in cash and $3.5 million in liabilities) subject to customary\nprice adjustments.\n\n\nThrough this purchase Major Drilling has acquired 19 drills rigs, the\nmajority of which have deep hole capacity and are fitted with rod handlers,\nwhich fits with the Company's strategic focus on specialized drilling. In\naddition to the rigs, this acquisition involves support equipment and\ninventory, existing contracts, and personnel. Subsequent to the acquisition,\nMajor Drilling will have a total fleet of 42 mineral exploration drill rigs in\nQuebec. Management anticipates that the operations of Benoit will produce\nadditional annual revenue of approximately $26 million and additional EBITDA\nof approximately $7 million for the twelve months subsequent to the\nacquisition.\n\n\nThe purchase price is payable, in total, by way of cash consideration\nfinanced through existing credit facilities of the Company, and is subject to\ncertain holdbacks.\n\n\nFrancis McGuire, President and CEO of Major Drilling, stated "We are very\npleased to welcome Forage Benoit and its employees into the Major Drilling\ngroup. This acquisition provides us with additional assets, experienced\ndrillers and existing contracts in Quebec. Benoit has operated successfully in\nthe Quebec/Ontario marketplace for some 40 years, and has a strong reputation\nwith its clients."\n\n\nMr. McGuire added "We believe that from the perspective of resources and\nresource potential, political risk, and financial incentives to the mining\nindustry, Quebec is one of the best jurisdictions in the world for mining\ncompanies to do business. We remain very optimistic about the continuing\ngrowth potential of this region. Also, given the strong demand and the\nCompany's favorable financial position, the Company still expects net capital\nexpenditures to reach a record of $80 million in fiscal 2009, above and beyond\nthe purchase price for this acquisition.&q...