MONCTON, NB, March 25, 2014 /CNW/ - Major Drilling Group
International Inc. ("Major
Drilling" or the "Company") (TSX: MDI) announces
that further to its press release dated March 3, 2014 it has now completed its review of
restructuring options for its Australian operation, and has
concluded to proceed with a full closure of that branch.
This decision is based on the current industry downturn, which
has hit Australia particularly
hard, and which has resulted in little work and highly competitive
pricing in that region. Australia
is also our highest cost jurisdiction. The Australian operation
contributed only approximately 2% of global Company revenue in the
most recently completed fiscal quarter, and only about 4% of global
Company revenue in the first nine months of this fiscal year.
Many of the assets used by this operation can be used by the
Company elsewhere. The Company will now determine which assets
should be moved to other jurisdictions and which should be sold. It
is expected that the close-down process will take approximately six
months to complete.
The Company will incur asset write-downs and cash close-down
costs, the amount of which is currently being evaluated. The total
amount of the write-down will be determined over the next two
months and announced with the Corporation's fourth quarter
financial information. These will include employee severance,
building lease related costs, the costs of moving assets out of
Australia, and other closure
costs.
Forward-Looking Statements
Some of the statements contained in this press release may be
forward-looking statements, such as, but not limited to, those
relating to worldwide demand for gold and base metals and overall
commodity prices, the level of activity in the minerals and metals
industry and the demand for the Company's services, the Canadian
and international economic environments, the Company's ability to
attract and retain customers and to manage its assets and operating
costs, sources of funding for its clients, particularly for junior
mining companies, competitive pressures, currency movements, which
can affect the Company's revenue in Canadian dollars, the
geographic distribution of the Company's operations, the impact of
operational changes, changes in jurisdictions in which the Company
operates (including changes in regulation), failure by
counterparties to fulfill contractual obligations, and other
factors as may be set forth, as well as objectives or goals, and
including words to the effect that the Company or management
expects a stated condition to exist or occur. Since forward-looking
statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Actual
results in each case could differ materially from those currently
anticipated in such statements by reason of factors such as, but
not limited to, the factors set out in the discussion on pages 16
to 18 of the 2013 Annual Report entitled "General Risks and
Uncertainties", and such other documents as available on SEDAR at
www.sedar.com. All such factors should be considered carefully when
making decisions with respect to the Company. The Company does not
undertake to update any forward-looking statements, including those
statements that are incorporated by reference herein, whether
written or oral, that may be made from time to time by or on its
behalf, except in accordance with applicable securities laws.
Based in Moncton, New
Brunswick, Major Drilling Group International Inc. is one of
the world's largest metals and minerals contract drilling service
companies. To support its customers' varied exploration drilling
requirements, Major Drilling
maintains field operations and offices in Canada, the United
States, South and Central
America, Asia, and
Africa.
SOURCE MAJOR DRILLING GROUP INTERNATIONAL INC.