One year after helping to float the family company, Swick Mining Services Ltd (SMS), on the Australian Securities Exchange, Randal Swick is planning to establish a new drilling business in Brazil.
While his brother Kent Swick continues to run SMS, Randal has developed plans for his gold exploration company, Cougar Metals NL, to diversify into contract drilling.
Drilling is obviously in the brothers’ blood, since their father established SMS in 1960.
Cougar has undertaken a small amount of contract drilling in Brazil during the past year, when its drill rigs were not required for its own exploration program.
It has subsequently been approached by other explorers who said they were frustrated by the poor quality and high cost of drilling services in Brazil.
The company has concluded there is a strong market appetite for a new drilling contractor with Australian management and drilling philosophies.
“Cougar believes there is a significant opportunity to develop a new drilling business in Brazil with a strong focus on providing high quality drill rigs with superior rates of productivity,” the company said in a statement.
Cougar has two drill rigs in its fleet, one new rig under order, and the ability to acquire a further six rigs over the next nine months.
It has also signed its first drilling contract with gold explorer Serabi Mining plc, which is chaired by Perth executive Bill Clough and listed on the London Stock Exchange’s Alternative Investment Market.
Cougar said its main focus would continue to be its exploration activities in Brazil and Australia.
“The establishment of the dedicated drilling business provides the company with an opportunity to generate cash flow to fund its exploration activities.”
Even though Cougar and SMS operate in different markets, Randal Swick resigned as a non-executive director of SMS two weeks ago to dispel any perceived conflicts of interest between the two companies.
Meanwhile, SMS is continuing its rapid expansion following a $20 million share placement in July.
The company expanded its fleet from 18 rigs to 31 rigs over the past year, which includes underground and surface rigs.
Its intention is to build an additional 30 underground diamond drill rigs this year at its workshop in Guildford.
The company recently reported a net profit after tax of $5.4 million for the year to June 2007 on revenue of $40.2 million.
