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Cabo Drilling Shows Resilience, Thanks to the Long-term Planning of Its Founder

Cabo Drilling Shows Resilience, Thanks To The Long-Term Planning Of Its Founder

No mistaking what Cabo Drilling does – it’s in the title. The company has four well-placed divisions in Canada from which it provides mining related and specialist drilling services down into the States as required. The company, under the energetic management of founder John Versfelt, has also spread its wings into Mexico, Panama, Spain and the Balkan states, and financial results just announced for the fourth quarter and for the whole year to end June 2008 show the wisdom of this expansion. In the fourth quarter revenue rose by C$2.95 million to C$14.63 million when compared with the same quarter in 2007, and for the full year it rolled out at a record C$58.65 million as against C$38.45 million.
As John Versfelt points out, Cabo has added a further seven drills to its international fleet since June and the international divisions are now operating 24 drills out of a total of 111 drills in the company. In the year to end June 2007 revenue from the international divisions accounted for only five per cent of revenue  compared with 19 per cent last year and this trend is expected to continue as these divisions now have more drills. This has to be seen as a very shrewd move, as the company has the expertise to carry out all types of drilling operations – deep hole, surface, underground directional reverse circulation and geotechnical – and there are not many others around the world with this ability. It means that the customer base is not confined by any means to mining exploration companies, but widens out into oil and gas companies and those involved in civil construction. This provides flexibility during difficult times and Cabo has no need now to add further to its fleet nor make any significant capital expenditure as its drills are all either already new or have been refurbished recently.

Even so it has to be accepted that work will be harder to find, and costs have to be controlled and spending reduced. However John Versfelt prioritises the need to maintain the experienced workforce that he’s built up over the last four years. In the last year five general managers have been taken on who have had plenty of experience of drilling though good and bad conditions. The key thing is to maintain good customer relations by carrying out efficient work to time and within budget. Drills can also be moved within divisions to ensure that new contracts can be won in areas that need more drills. Add to this the fact that expansion of the company has meant that profit margins have always been kept low in order to maintain a competitive edge, and you have an ideal company to face current market conditions.

The increase in revenue last year can be attributed to growth in the international, Ontario and Atlantic divisions, and it is worth explaining that the Atlantic division, based in Newfoundland, specialises in underground and surface core drilling, slimhole core drilling for oil and gas exploration, and geotechnical drilling for engineering services and environmental assessments. Customers for this division include well known companies such as Teck Cominco, Altius Minerals, Paragon and Playfair.

It is interesting to note that gross margins of 27 per cent were achieved by the international divisions as this compares with the average of 23.4 per cent across the rest of the divisions, marginally down on the previous year. The blame for this lies with the Ontario and Pacific divisions – the latter operating out of Surrey in British Columbia and responsible for specialised core drilling for the potash industry. The Ontario division operates out of Kirkland Lake and has widened its services into customised labour supply contracts and remote transport of drilling equipment and supplies.

Cabo is now well into the financial 2008/9 year, and is keeping its finances in good order. The expansion programme on which John Versfelt embarked four years ago means that Cabo can now claim to be one of the industry’s larger mineral drilling services companies and it is already dabbling its toes into West Africa. As far as mining companies are concerned it can offer drilling services to major, mid-tier and junior mining and exploration companies, and can provide expertise in projects ranging from early-stage reconnaissance drilling through to resource definition and advanced stage mining. By consolidating within the mineral drilling industry, John Versfelt points out, Cabo has gained a competitive edge through efficiency, productivity and scale, and is now able to bid for contracts from a range of other industries. He has always been a long term planner and this is now paying off big time.

About the Author

http://www.cnmining.org/news/?id=253

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Find the volume of material removed when a sphere of radius 4 is core drilled with a 1 inch diameter drill.?

Find the volume of material removed when a sphere of radius 4 is core drilled with a 1 inch diameter drill.

R of sphere=4,r of drill=0.5"
What you remove consists of 2 caps and one cylinder,
each cap has a dimeter of 1" & height of
4-(4^2-0.5^2)^1/2=0.031373"
Vol of 1 cap =
=[pie x (0.031373)^2 x (3 x 4 -0.031373)] /3 =
=0.0123363 inch^3
Vol of cylider=0.5^2 x pie x 2(3.968627)=
=6.234 inch^3
total material removed=6.234+2(0.0123363)=
=6.258577 inch^3,It might be gold.
God bless you for being patient.

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