Capital Drilling Ltd (LON:CAPD), which provides rigs and services, won a number of exploration contracts in its first quarter, signalling a measured recovery in the mining sector.
The group also saw stable revenue over what is a traditionally weak first quarter, with turnover increasing into the second quarter due to the start of short term contracts.
"Recent increases in the gold price along with increased capital markets activity in the mining sector give the group an encouraging outlook," it said.
"The early signs of recovery in the sector, albeit measured, together with the award of new exploration contracts, reinforce Capital's position for revenue and earnings growth during the balance of 2016 and beyond.
"The group continues to benefit from a strong balance sheet and solid cash generation, providing the platform for growth," it added, updating on the period from Jan 1 to May 17.
Revenue for the first quarter was $19.1mln - the same figure as in the first quarter of 2015 and up from $18.9mln in the preceding fourth quarter.
The average number of used rigs was 34 compared to 32 in the same period of 2015, while the fleet size at period end was 94.
New exploration contracts included one from Egypt focused Alexander Nubia (CVE:AAN) for one diamond rig starting on March 31, and for Tanga Resources, in Tanzania, for one multi-purpose rig, which started on April 18.
It also completed a high altitude exploration drilling contract with giant Barrick Gold in Chile using one reverse circulation (RC) rig.
Notably, Capital also moved three new blast hole rigs for Acacia Mining's (LON:ACA) North Mara contract in Tanzania, meaning it now has five rigs on site.
This extends Capital's services at the site, where it was previously providing grade control drilling services only.
Chief executive of Capital Mark Parsons said: "The large majority of our revenue is secured with long-term contracts, many of which are expected to operate beyond their forecast completion. Our low cost operating model also attracted several new contracts during Q1, supporting our growth strategy.
"For the balance of the year we will continue to: pursue growth in emerging markets; enhance our ability to offer additional drilling services; and execute strategic partnerships. I am confident we have established a solid platform for future growth, despite the challenges the industry continues to face."
Shares added 7.81% to 34.5p.