Major Drilling Confirms Market Update

About this update from Major Drilling Group International Inc.

[{"type":"text","content":"\n\n\n\nMONCTON, NB, May 18 /CNW/ - Major Drilling Group International Inc. (TSX:\nMDI) (the "Company") is confirming the disclosure it made in its third quarter\npress release dated March 3, 2009.\n\n\nIn that press release, we stated:\n\n\n"In January, due to the uncertainty in the economy, many customers\ndelayed or cancelled their exploration drilling plans, which impacted the\nquarter's results compared to last year. Delays and cancellations will\ncontinue to have an impact through at least the first half of calendar\n2009. In addition, lower levels of demand have significantly increased\ncompetitive pressures, which will impact pricing", said Francis McGuire,\nPresident and CEO of Major Drilling.\n\n"The current economic environment has impacted, and will continue to\nimpact, drilling in the short to medium-term, particularly on base metal\nprojects where the Company expects to see a significant slowdown in\nactivity in 2009. Senior and intermediate base metal companies that are\nleveraged have also reduced their exploration spending for 2009, in order\nto conserve cash. Many gold producers have delayed exploration plans due\nto the uncertainty in the economy. Sources of funding for junior mining\ncompanies are limited, and as such many junior projects, both in the base\nmetals and gold sectors, have been delayed or cancelled", said Mr.\nMcGuire.\n\n"All of this uncertainty limits the Company's visibility for the short-\nterm. Fourth quarter revenue will be significantly impacted by\ncancellations and delays, and revenue could potentially fall by more than\nhalf as compared to the same quarter last year."\n\n\nAs expected, the fourth quarter of fiscal 2009 proved difficult as the\ncurrent economic environment impacted drilling worldwide, particularly on base\nmetal projects. Many of our largest senior customers cut their exploration\nprograms significantly to conserve cash. A large number of specialized\nprojects, which tend to be more costly for customers than conventional\nprojects, and where the Company has historically placed its main focus, have\neither been cancelled or very heavily cut back. Five of our largest worldwide\ncustomers alone have postponed various projects that generated revenues of\napproximately $40 million in the second quarter of fiscal 2009. We also chose\nno...

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