Battling conditions and perceptions in Brazil Michael Quinn, 24 March 2011
EVERY month or so it seems another Australian based company either makes the move to Brazil or announces aggressive exploration plans in the vast country. Be that as it may, RC drilling contractor Cougar Metals is still finding it tough work getting market traction in the diamond core drilling dominated country.
Speaking from Brazil this week, Cougar managing director Randal Swick said that while the company?s drilling business was going well in Uruguay, the Brazilian arm had thus far this year been at break even. He said that while the ASX companies in Brazil may be domiciled in Australia, local management was often heavily Brazilian staffed.
And for Brazilians, RC drilling is a bit of a dark art. ?We will continue to pursue this market but it is very difficult,? Swick said. ?Brazil has lots of complications; it is a huge country with tropical climate in a lot of places with high rainfall, poor access, remote locations, prohibitive import duties, and limited manufacturing capability as far as drilling products go ... everything is very expensive in Brazil.
?One of the things that is definitely going against us in Brazil is the equipment is heavy and as such it can be difficult to mobilise that equipment. Whereas mobilising diamond equipment is quite simple. There are a lot of bad experiences with RC drilling in Brazil ... getting bogged, inexperienced drillers, bad samples ...
?And it?s not like we can always step in and solve those problems. To get a good sample you need a lot of air, and it is very difficult to get a lot of air without using heavy equipment.?You don?t have to go too far to find someone who has had a bad experience with RC drilling.? Swick, though, remains optimistic.
?Quite possibly we are not yet at that critical size where it all becomes economic,? he said ?We are trying to focus on what our weaknesses are in Brazil and trying to get it into a state of profitability.? And he is encouraged by the progress in Uruguay ? where the company has six rigs operating around the clock ? and greater acceptance of RC drilling elsewhere in South America.
He said a split of Cougar?s drilling and gold exploration business was possible at some stage, though nothing on that score had been yet decided. For now, it is all about the hard yards.
GB
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