JOHANNESBURG (miningweekly.com) – Three major developments, which are poised to move the needle for South African mining, were outlined to Mining Weekly by the Johannesburg Stock Exchange-listed drilling and mechanised rock excavation technology company Master Drilling, when it reported 399%-higher half-year after-tax profit of $18.1-million on Tuesday, following a partial impairment reversal.

The Proudly South African Far West Rand original-equipment manufacturer, with an order book of $306-million on a revenue pipeline of $515-million spread across 28 countries on five continents, highlighted the first of its three major developments as its ready-made new shaft boring system (SBS) that points to drilling a shaft to depth in half the time.

The second is a mobile tunnel borer (MTB) machine that is paving the way for the third – a narrow-reef rock cutter that will maximise extraction and minimise waste from an orebody that is currently not economically viable using conventional mining methods. (Also watch attached Creamer Media video.)

The SBS eliminates the need for conventional blasting in hard rock material; the MTB is destined to tunnel for some distance at the Bokoni platinum mine of African Rainbow Minerals (ARM) in Limpopo; and the third is a narrow reef cutting advancer with the likely ability to halve the development of a mine, for example ensure that what would conventionally be a 600 000 t mine is a 300 000 t mine – but with the same number of ounces produced.

Master Drilling CEO Danie Pretorius told Mining Weekly in a Zoom interview: “Quoting some of the ARM management, dilution in the industry is a cancer, so if we can reduce dilution and get the on-reef cutter on autopilot, I really think that's going to come with a lot of value such as transporting less through the mine, reduced plant size, less energy requirement for the plant, and the list goes on.” (Also watch attached Creamer Media video.)

The contract negotiations have been finalised and operations are expected to start in the fourth quarter of 2025, with hot pursuit to achieve key performance indicators (KPIs).

Mining Weekly: How will you make it possible for the currently inaccessible narrow-reef upper group two – UG2 – reef to be extracted at Bokoni?

We’ll tunnel with the MTB for some distance, and then follow with on-reef cutting. No doubt, certain modifications will probably be done as we progress but we see this as our rock factory, and we're not using drilling and we’re moving away from explosives, which obviously, for the miners, would mean continuous operation, which we’re really excited about. If we can hit those KPIs with the client, it’s going to really add a lot of value in the industry.

PUT TO THE TEST

The SBS, which is designed to bore shafts with diameters of 4 m to 11.5 m, depending on client requirements, has bored a 4.3 m shaft to depths of up to 100 m using a cutter head specifically developed to drill through extremely hard rock, such as 320 MPa norite.

What was Master Drilling’s top highlight of the six months to June 30?

The successful commissioning of the SBS here at the site, close to our offices. I really think this could probably move the needle for the miners of the deeper orebodies that we need to get to quicker. We need to take the next step here to increase the size from 4.2 m to larger than six metres, which is work in progress. But I think this was probably, in our business, top of mind for the last six months. So, what we're busy with are the SBS, the MTB and the on-reef cutter, that’s what the industry needs today.

What was the reversal of the impairment all about?

It’s more of an IFRS accounting entry that happened last year. We cleared site at Mogalakwena early last year and unfortunately had no committed mid-year work for the machine. This is part of the accounting protocols and IFRS requirements, and we had to impair the MTB. Fortunately, this time around, we have confirmation from Bokoni, where the MTB will be moving to in the next couple of weeks, and that’s the reason for that reversal.

What progress has been made with deploying polycrystalline diamond supplied by Element Six, the De Beers group company, to reduce rock waste?

We’ve parked that project for the short term. We’re awaiting a client, and we've decided to redeploy the resources and to focus on the MTB and the on-reef cutting project for the short term, so nothing more has happened since our last discussion and we’re awaiting a client to take that forward.

Is the transition to the green economy still a big driver of business for Master Drilling?

We put green economy business in two boxes. One is the role that we play in the green economy and you must remember that mining is fundamental to and at the heart of the green economy with commodities like copper, cobalt, lithium, manganese, rare earths and the list goes on. Where we come into play is probably in the value-add for mining clients we have in South America and in the DRC. Indirectly, I think our involvement with those miners is probably worth noting. The second part lies within our business itself. There are two specific areas which we focus on, and those are the recycling and reclaiming of water. We recycle millions of litres with our drills worldwide and there's a specific focus on recycling. That's one. The other one is that Master Drilling, I believe, is the only contractor in the world that's tracking the kilowatt hour per cubic meter drop, something that's still work-in-progress, but at least it's visible and there are different initiatives to try and reduce that - those are the two areas of focus in the business.

Why is Master Drilling so engrossed in developing mechanical cutting systems to get down to deeper levels faster?

To get to these deeper orebodies with conventional shelf sinking methods is just not going to work. Gone are the days where investors will wait 15 years and 20 years for a new mine to be developed. You can just imagine, with the volatility in the commodities, what would the input be for a base price, if you need to guess what the gold or copper price will be in 15 years’ time. What I'm trying to get to is the emphasis today is to get down there quicker, faster and safer and hence the reason why a lot of our energy and time has been spent to try and figure out how we can deal with the timing of projects. Dealing with the NPVs and the IRR’s of these projects, especially in commodities like copper, is going to be critical for the industry going forward.

HALF-YEAR RESULTS

In the six months to June 30, Master Drilling generated 4.9%-higher revenue of $133.2-million and 234%-higher operating profit to $26.6-million.

Dollar earnings per share increased 485% to $0.117, and rand earnings per share by 474.1% to 215.3c. Dollar headline earnings a share increased 6.7% to $0.096, and rand headline earnings per share by 4.7% to 176.6c.

Net cash generated from operations amounted to $11-million. Cash resources continue to be managed diligently to cater for emerging opportunities that require specific design, planning, and investment.

Of Master Drilling's total capital spend of $13.9-million, 41% was on expansion and 59% on sustaining the existing fleet.

Debt decreased from $48-million to $45.4-million. The gearing ratio, including cash, increased from 6.3% to 10.5% in the first six months of the 2025 fiscal year.

OPERATIONAL EQUIPMENT

The fleet consists of 148 raise bore, 35 slim drilling and one MTB rig. The total raise boring fleet utilisation rate was around 65% while the slim drilling fleet utilisation was around 28%. The rate of new rigs coming on board will settle with a focus on larger units, which typically generate higher income.

Optimisation of fleet utilisation to 75% is under way amid the implementation of a diversification strategy, encompassing regions, commodities, currencies, and industries.

While an exploration research project has been implemented, a number of new geotechnical drilling contracts have been secured and additional machines are being mobilised for various projects, including new contracts outside South Africa and an expansion of underground drilling capacity at a major mine.

Robotic drilling equipment and the development of sampling and processing systems have accompanied the commissioning of the Project Desert Elephant, a surface core drilling rig with a robotic hand.

In South America, the company is capitalising on a regional transition towards underground mining while operations in Central and North America are undergoing a turnaround.

In Africa, where a new contract has prompted the mobilisation of additional equipment, strong, continued growth is anticipated with more machines being mobilised to key mines as well as the successful launch of a first-of-its-kind unit.