London-listed mining services company Capital has recorded a 3.1% year-on-year increase in revenue to $80.2-million for the quarter ended March 31, marking a good start to its financial year.

Mining revenue for the first quarter of $18.2-million, which was up 41% year-on-year, offset an 8.9% decrease year-on-year in drilling and associated revenue, which amounted to $52-million.

Laboratories revenue increased by 29% year-on-year to $9.8-million in the first quarter of the year.

Compared with the fourth quarter of last year, total revenue decreased by 5% from $84.5-million.

On an asset level, average monthly revenue per operating rig was $202 000 in the quarter under review, which is a 5.2% increase compared with the first quarter of last year and a 7.4% increase compared with the fourth quarter of last year.

The stronger average revenue per rig is a result of the company ramping up high-quality contracts and focusing on efficiency at its more established sites.

The group’s corporate headquarters are in the UK and it has established operations in Côte d'Ivoire, Canada, the Democratic Republic of Congo, Egypt, Gabon, Guinea, Kenya, Mali, Mauritania, Nigeria, Pakistan, Saudi Arabia and Tanzania.

Its services include exploration, delineation and production drilling, load and haul services, maintenance and geochemical analysis.

The company reports that its fleet utilisation in the reporting quarter reduced to 66% from 77% in the first quarter of last year and 72% in the fourth quarter of last year, owing to reduced activity at the Tembo site, in Tanzania, and subdued activity in West Africa, particularly in Mali.

Capital expects to record a higher level of asset mobilisation and utilisation in the remainder of the year, including owing to a two-year extension of exploration and delineation drilling at Predictive Discovery’s Bankan project, in Guinea, and increased rig counts or run rates at various projects.

For example, the company is expanding its rig count at the Ivindo site, in Gabon, this year, under an existing three-year reverse circulation and diamond drilling services contract.

Capital plans to start drilling at the Nevada Gold Mines operation in the second quarter, with activity increasing progressively through the rest of the year.

An extension of openpit drilling services at Centamin’s Sukari gold mine, in Egypt, for a further five years, will start from January 1, 2025.

While the group’s rig count decreased from 127 to 124 in the first quarter of the year, further rigs related to growth, including in Nevada, will be added to the group’s total rig count upon commissioning.

Capital CE Peter Stokes says the first quarter has laid a foundation for a strong year with more positive momentum to follow.

LAB GROWTH

Capital’s laboratory services company MSALABS’s revenues were impacted on by typical seasonality effects in the first quarter, including a winter slowdown in Canada.

MSALABS remains on track to deploy more Chrysos PhotonAssay units this year, including three units in Nevada related to a contract with the Nevada Gold Mines business, which is 61.5%-owned by Barrick Gold. The contract is estimated to generate $140-million over five years, marking the largest award of new business in the history of MSALABS.

The three units in Nevada marked the start of a broader partnership agreement, with the potential for ten more PhotonAssay units to be deployed across multiple Barrick operations.

Capital has set its revenue guidance for this year at between $355-million and $375-million, with tendering activity remaining robust across the group and a number of opportunities progressing.