MONCTON, NB, Sept. 6 /CNW/ - Major Drilling Group International Inc. (TSX: MDI) ("Major Drilling" or the "Company") is pleased to announce that, through its wholly owned Chilean subsidiary, it has signed an agreement to purchase the exploration drilling company Harris y Cia Ltda. ("Harris").
Through this purchase Major Drilling will acquire 11 drills rigs, all of which are currently committed to work on a double shift basis conducting mainly specialized drilling in the active northern region of Chile. In addition, the acquisition involves all support equipment and inventory, as well as the Antofagasta office and repair facilities owned by Harris. This acquisition provides attractive synergies to assist the Company in fulfilling its strategy of fully servicing the Chilean specialized drilling market. Subsequent to the acquisition Major Drilling will have a total fleet of 35 drill rigs in Chile, and the similarity of the Harris and Major Drilling rigs will produce operational efficiencies.
As part of this acquisition Major Drilling is also acquiring Harris' existing contracts and retaining key management personnel, as well as other employees, including a number of experienced drillers.
The purchase price for the transaction is US$22.7 million, subject to customary working capital adjustments, to be financed with cash and debt.
Francis McGuire, President and CEO of Major Drilling, stated "We are very pleased to welcome Harris Drilling and its employees into the Major Drilling group. Harris has been operating in Chile since 1981, and has an excellent reputation with its clients. This acquisition provides us with additional assets, experienced drillers and existing contracts in Chile. We anticipate that the operations of Harris will produce additional revenues of approximately US$11 million for the balance of our fiscal year, ending April 30, 2008. "
The transaction is expected to close by mid-September.
Some of the statements contained in this press release may be forward-looking statements, such as estimates and statements that describe or are with respect to the future price of minerals and metals, the Company's future plans, objectives or goals, 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 starting on pages 19 to 22 of the 2007 Annual Report entitled "General Risks and Uncertainties", as filed with the Canadian Securities Commission (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' mining operations and mineral exploration activities, Major Drilling maintains operations in Canada, the United States, Mexico, South and Central America, Australia, Armenia, Indonesia, Africa and Mongolia.