Big finds make the drilling thrilling as DDH1 mulls possible IPO

DDH1 founder Murray Pollock, left, general manager of operations Mat Scarlett and CEO Sy van Dyk. Picture: Colin Murty

• PAUL GARVEY

  SENIOR REPORTER

  @PDGarvey

  
• 2 HOURS AGO OCTOBER 25, 2020
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An extraordinary wave of exploration discoveries across the Australian mining industry could set the stage for decades worth of work to come, IPO hopeful DDH1 says.

The drilling company, backed by Oaktree Capital Management, has been weighing up a possible listing on the local stockmarket and is understood to be just days away from a decision on whether to press ahead after meeting with investors last week.

DDH1 founder Murray Pollock and chief executive Sy van Dyk declined to comment on the IPO plans, but said the recent bout of discoveries would further boost the company’s long-term prospects.

“I can’t remember a period of time when we’ve seen the sort of drill results that we’ve seen over the last 18 months,” Mr Pollock said.

DDH1 has drilling contracts at the Haveiron copper-gold discovery of Newcrest Mining and Greatland Gold in WA’s Paterson region and BHP’s Oak Dam find in South Australia. Other major recent discoveries include De Grey Mining’s Hemi gold find in WA’s Pilbara, Rio Tinto’s Winu copper-gold discovery in the Paterson, and Chalice Gold’s Julimar discovery just outside Perth.

“A lot of those new discoveries and new projects are either high-grade or long-life mines. The fantastic thing we see about this period of time is the legacy of work that’s going to come from this over the coming years,” he said.

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“While it‘s nice to have this boom time at present there seems to be an enormous amount of substance coming out of it. We think it’s going to sustain us for many years to come.”

Mr Pollock said most of the discoveries would require the drilling services offered by DDH1.

“They’re projects that ... require deep directional drilling holes to 2000 metres and multiple intersection-type work,” he said.

“So normally we’ve had to wait until mines are more than 30, 40, 50 years old, before you start to really get into a lot of that stuff.” He credits the surge in discoveries to the advances in geophysics and seismic technologies, the discipline from years of tight capital markets, and a return by the mining majors to early stage exploration.

DDH1’s biggest exposures are to gold and iron ore, which are enjoying boom conditions.

But Mr van Syk said the company had a record of growing throughout the mining sector’s cycles thanks to its contracts at many of the country’s largest mine sites.

“This business has grown in tough periods as well as good periods so it‘s shown that it’s not cyclical, and it’s got industry-leading returns,” he said.