Mining services: Vysarn continues winning streak with Roy Hill contract
$17 million market cap Vysarn (ASX:VYS) has picked up a contract from Gina Rinehart’s Roy Hill Iron Ore that has already delivered an initial work request worth about $2 million.
Under the contract, Roy Hill may at any time during the initial two-year term submit a request to Vysarn’s wholly-owned subsidiary Pentium Hydro to perform works.
These works include dual rotary and reverse circulation water bore drilling services, minor civil works, as well as rotary air and conventional drilling services.
Vysarn will not have to wait long for the contract to start delivering. Pentium has already received and accepted its first work request for dual rotary drilling and construction de-watering production bores.
Subject to the mobilisation of the rig prior to Christmas, this current work request package is expected to be completed within four to five months.
In September, the company was awarded a major services contract from AngloGold Ashanti (ASX:AGG) to provide dual rotary drilling and waterwell construction services for the Tropicana gold mine in WA.
Meanwhile, major drilling services provider Boart Longyear (ASX:BLY) has maintained that while global demand has been slow throughout the September 2019 quarter, it still expects major and intermediate miners to expand their investment in exploration activities.
“Industry metrics reported around commodity pricing, reserve life and levels of debt held by mining houses all indicate a need to reinvest into exploration activities,” CEO Jeff Olsen said.
The company reported a net profit after tax of $2 million for the nine months to 30 September 2019, an improvement from the net loss of $28 million in previous corresponding period. This was despite a $12 million drop in revenues to $578 million.