Capital Drilling Ltd (LON:CAPD) has upgraded its revenue guidance after a buoyant first half.
It expects turnover to be in the US$105-US$115mln range, up from a previous forecast of US$100-US$110mln.
The company will update on its performance in the first six months of the financial year on July 10.
It told investors Monday it had seen increased demand for its services in the mining sector after landing three new exploration and delineation contracts.
Egypt and Tanzania
In Egypt, Aton Resources has hired the company's reverse circulation rig for a 15,000-metre campaign, while Graphex Mining has called on its expertise in Tanzania to carry out 3,000 metres drilling on the Chilalo Graphite Project.
Moving to Botswana, the diamond giant De Beers has called in Capital to help it carry out 11,000 metres of delineation drilling at the Kokong project in Botswana.
Chairman Jamie Boynton said: "We are pleased to announce a number of successful exploration and delineation contract awards that will be carried over the second half of 2018.
"All three contract awards are in existing countries of operation for Capital Drilling, allowing us to leverage our infrastructure and assets already in country.
"The last few months have seen an increase in demand for exploration rigs, which will benefit Capital Drilling's utilisation rates from this segment of the market."
West Africa booming
In a separate announcement, the company updated on its progress in West Africa, where it has two contracts in Mali – one already underway, the other imminent – along with work in Mauritania.
Resolute Mining and Hummingbird Resources are using its services in Mali, while Kinross is the client in Mauritania.
By the second-half, it will have doubled the size of its rig fleet in West Africa.
Shares trading at discount to broker's valuation
The shares, up 10% in the last month, edged 0.2p higher to 44.4p, valuing the business at £60.5mln.
Broker finnCap reckon the stock is worth 109p. “The shares continue to trade at depressed levels, with sentiment dominated by the ongoing Tanzania situation,” it told investors.
The mining industry has come under tough scrutiny from the government of what was formerly one of East Africa’s more politically friendly nations.
It’s a spat that initially focused on Acacia Mining, though some of the junior diggers were caught in the cross-fire.
Executives working in the country reckon the government is becoming less confrontational and more accommodating amid fears the recent crackdown may start deterring investment.
However, this view is not universally shared in the markets, which still tend to ascribe a discount rating to Tanzania-focused mining businesses.
Global experience
Capital operates one of the youngest fleets in the industry. It owns 25 blast hole, 47 diamond, 14 reverse circulation and seven underground rigs and has deployed kit in Africa, Eastern Europe, Asia and Latin America.
“We take the time to understand local regulations and customs in all countries we operate in,” its website says.
“This ensures our activities are compliant and our operations considerate of local traditions.
“We experience improved efficiencies, faster project start-up and smoother ongoing operations as a result.”
Its clients have included Barrick, BHP Billiton Glencore, Kinross and Rio Tinto.