06/11/2013 - 10:55

Swick invests in mineral tech company

06/11/2013 - 10:55

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Drilling contractor Swick Mining Services is planning to invest up to $6.5 million in a Swedish mineral analysis technology company as it looks to turn around its performance.

Swick invests in mineral tech company
Swick managing director Kent Swick.

Drilling contractor Swick Mining Services is planning to invest up to $6.5 million in a Swedish mineral analysis technology company as it looks to turn around its performance.

Swick will spend $1.1 million on an initial 23 per cent shareholding in Orexplore AB, a technology company that has created a portable X-ray mineral scanner it hopes will allow accurate, real-time assay and structural analysis in the field.

A further $5.4 million in funding over a two and a half year period, subject to agreed research and development milestones, will take Swick's equity ownership in Orexplore to 52 per cent.

"The investment in Orexplore is consistent with Swick's commitment to being a leading innovator within the mineral drilling industry, through research and development activities that drive improved productivity and efficiency," Swick managing director Kent Swick.

"The investment will also provide an excellent opportunity for Swick to leverage its already strong position and reputation within the market to potentially provide a more diversified range of valuable products and services to our clients in the future."

Swick last week forecast lower annual earnings and disclosed that it had cut more than 100 staff in the space of 12 months amid challenging conditions in the mineral drilling sector.

The company provided revenue guidance of between $125 million and $135 million for the 2014 financial year, down from a record $146.5 million in FY13.

Swick has put its projected earnings before interest, taxes, depreciation and amortisation margin at between 18 and 20 per cent, which translates to between $22 million and $27 million.

This compares to the $30.8 million EBITDA Swick recorded in FY13.

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