TORONTO (miningweekly.com) – Canadian mine drilling equipment and services provider Major Drilling Group International on Thursday said it had cut its weekly payroll staff by 38% to conserve funds, as mining companies slash exploration budgets.

“In February, due to the uncertainty around economic matters impacting the mining market, some customers delayed or cancelled their exploration drilling plans. In a number of jurisdictions, uncertainty as to the policies of host governments or issues of land tenure also had a compounding impact on this quarter’s results.

“These factors, combined with the fact that sources of funding for junior mining companies remain limited, have led to significantly decreased activity in certain regions,” CEO Francis McGuire said during an analyst conference call on Thursday morning.

He added that, in light of the slowdown in activity, the company had undertaken a review and restructuring of certain operations and had implemented reductions of salaried employees. The market was expected to remain depressed during the rest of the financial year, especially in the gold sector.

The New Brunswick-based company late on Wednesday reported a 93% drop in fourth-quarter earnings as miners cancelled or deferred exploration projects.

Net earnings for the period ended April 30 declined to $2.2-million, or $0.03 a share, compared with the $30.7-million, or $0.39 a share in the fourth quarter of 2012.

Revenues declined by 43% year-on-year to $135.5-million, compared with record revenue of $237.2-million in the same period last year.

Major Drilling also said it would cut senior executives' salaries and directors' fees, as it aimed to reduce general and administrative costs by 20% from their peak in the first quarter.

Major Drilling’s main competitor Boart Longyear had also seen declining profits in recent quarters, as a direct result of fewer exploration projects currently being undertaken.

The company’s TSX-listed stock strengthened by 2.79% in Thursday morning trade to C$7.38 apiece; however, its stock had declined by about 24.7% from the start of the year.