The contract with Saturn to scan core with the patented GeoCore X10 machine, and use SWK's proprietary Insight software for analysis, is underway. It comes on top of two major Swick drilling contract renewals at the Jundee gold mine and Renison tin mine in Australia.
SWK shares have risen 10% since the start of July (to A22c), capitalising the company at just over A$50 million.
"This deal comes barely two months after Swick officially launched the Orexplore mineral analysis technology in Australia and is a major step towards commercialisation of this world‐ first technology," Swick said.
"Orexplore was developed over a seven‐year period in Sweden and has the potential to disrupt the multi‐billion‐dollar a year minerals analysis industry by providing real‐time, non‐ destructive assay and tomography results, using whole of core data that is a vast improvement on the multiple weeks delay currently used in destructive chemical testing.
"We have seen good levels of interest across a wide spectrum of potential clients who have been trialling the product since it was introduced. Many of those are now deciding how to use the technology in their current work flows and we are confident a number of proposals will be converted into laboratory scanning agreements soon."
SWK has just won a new two-year contract with Northern Star Resources to drill more than 700,000m of underground core holes with up to 15 rigs at Jundee, and another extension at the Metals X-operated Renison tin mine to drill 115,000m over the next two years.
Northern Stars is ramping up production at Jundee on the back of new resource growth and exploration success.
"This is a very big program not only for the number of rigs but as the productivity is very high as well," Kent Swick told Mining Journal.
"We average over 40m per shift which is world class for NQ2 size core.
"Jundee is a complex system and needs a lot of drilling, bit drilling also yields results in great camps."
Asked about the general state of the market and pricing, and the outlook, Swick said rig availability had tightened considerably in recent times.
"The availability of quality rigs and crews is very limited at present so for clients to retain or procure rigs that actually can be manned and operate safely they will be prepared to match the market or at least allow the contractors to make a minimum margin," he said.
"Swick is very productive, so the adjustments we need to make are relatively small and we hope though that the clients value that and don't ask us again for massive price reductions in the next down cycle.
"Clients demanded heavy discounts five years ago - up to 20% … and we gave them somewhere between 0-10% to avoid them going to tender. We didn't know how the other competitors who were exposed to the surface market would behave, which was a motivator.
"Swick has been protected somewhat by our continued improvement in metres per man-hour which is an excellent measure of operating efficiency. We have though, been exposed to five years of cost creep and our equipment is still depreciating every day.
"Swick has been focusing our rate adjustments at the time of tender renewal and so far have been successful in fixing the rates [with] eight from 10 contract renewals, with relatively minor adjustments, or the two that didn't accept the required adjustments were not renewed and that releases rigs for new work at current market rates.
"One thing Swick didn't do was compromise our service delivery even though we were earning much less.
"That has kept our relationships strong and our good relationships have got better."
