Although there are clear shifts under way in the commodities and companies driving global mineral exploration, the fundamental demand for mineral drilling services remains stronger than ever, Major Drilling president and CEO Francis McGuire told shareholders in Toronto on Tuesday.

The New Brunswick-based firm expects demand to continue to rise from companies looking for gold, copper, uranium and energy, and sees the portion of its business made up by senior miners (already at 70%) on the increase.

“Gold, copper and especially uranium players continue to ask for more drills, they continue to ask for more drilling, and we are finding it difficult to meet those demands.”

Large mining houses are also increasing their exploration expenditure and activities, as well as entering joint ventures on projects with cash-strapped juniors.

On the flip side, liquidity hit junior firms are expected to stretch out their programmes until market conditions improve, and explorations programmes are also being scaled back by companies looking for zinc and nickel, McGuire said at the company's annual general meeting.

Nonetheless, “When you look at it from a driller's point of view, and a services company point of view...our major problem still is that we cannot get enough drills, and enough crews for our customers today. That has not changed.”

BIG FINDS HARDER TO COME BY

Most of the company's work around the world is in the initial search for large targets, said McGuire.

Although there is some post-discovery exploration, which is more intensive and requires greater numbers of drill rigs, much of this is on smaller projects, and very little on projects that would have any significant effect on drilling services supply and demand.

Although global exploration expenditure is rising, the new large-scale finds across the world are becoming increasingly rare.

“We believe that you are going to have to find these big deposits, these rich deposits, in areas that are very difficult to access,” commented McGuire.

“Whether it's the Arctic, whether it's the high-altitude areas, or very deep in the ground...all of which is changing the structure of our industry.”

ACQUISITIVE GROWTH

Major Drilling, which announced last month that it would buy Quebec-based exploration drilling company Forage à Diamant Benoit Ltée, which added 19 drill rigs to its fleet, plans to increase its capacity by at least 60 rigs over the 2009 financial year.

The availability of skilled crews remains a challenge, and the firm also continues to invest heavily in skills development and on-the-job training, said CFO Denis Larocque.

While the firm plans to add to its rig fleet and bulk up its skills base through acquisitions, there are not that many potential targets, McGuire said.

Major Drilling has operations in Canada, the US, South and Central America, Asia, Africa (including South Africa, Tanzania, Namibia and Botswana) and Australia.

The TSX-listed company reported a first-quarter profit of C$26,33-million on Thursday, compared with C$18,94-million a year earlier.

Revenue in the three months ended July 31 rose to a quarterly record of C$178,2-million, from C$143,4-million in the same quarter a year ago.

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