LSE-listed mining services company Capital earned revenue of $138.1-million for the six months to June 30 – a 39.9% increase on the revenue of $98.7-million earned in the first half of 2021.

Non-drilling revenue contributed 28% of total revenue for the first half of the year, compared with the previous year, driven mainly by growth in mining services and by subsidiary MSALABS.

“We are currently seeing the strongest demand since the company's inception, in contrast to the recent perception from global equity markets.

“Our drilling fleet operated at 85% utilisation through the second quarter and finished the quarter at 116 rigs. This represents both the highest rig count and also the highest quarterly utilisation rate in the group's history,” executive chairperson Jamie Boyton notes in a trading update.

New contracts include a three-year comprehensive drilling services contract with AngloGold Ashanti at its Geita gold mine, in Tanzania.

Capital also secured its first contract with B2Gold Corporation at the Fekola gold mine, in Mali, for a reverse circulation drilling services contract.

Boyton says the company’s mining fleet at the Sukari gold mine, in Egypt, also operated at steady state, maintaining very high utilisation of the equipment through the second quarter. A waste mining contract at Sukari also continued to perform well and remained lost time injury free.

“MSALABS has also now locked in a continuation of its impressive growth trajectory with the expanded relationship with Chrysos.

“At the time of the acquisition of a controlling interest in MSALABS in 2019, the company generated just $3-million in annual revenue, and so it is incredibly pleasing to see that business now guiding to over $80-million just five years later,” Boyton says.

MSALABS recently announced an expansion of its global partnership with Chrysos, with plans to deploy 21 Chrysos PhotonAssay units by 2025.

The rollout of an initial six units by year end is on track.

OUTLOOK

Capital says the outlook for its business remains good.

The drilling business is operating at high utilisation rates and further rigs will arrive in the second half of the year, with the group's rig count growing towards about 120 rigs, it notes.

Moreover, the Sukari earthmoving contract continues to perform well.

MSALABS is also experiencing “exceptional” demand for its laboratory services, the company says. It notes that the expanded partnership with Chrysos will drive material further growth through 2023 and 2024.

Capital says the business mix is underpinned by long-term mine-site contracts. The company is taking advantage of strong demand in the market to win further contracts, as well as rotate into higher-quality blue-chip customers as highlighted by the recent contract with B2Gold.

Capital highlights that tendering activity across all business units remains robust, with a number of opportunities progressing.

Revenue guidance for the full-year remains at $270-million to $280-million.