Major Drilling Reports New Records, with Revenue up 52% and Earnings from Continuing Operations up 86%



    MONCTON, NB, Sept. 11 /CNW/ - Major Drilling Group International Inc.
(TSX: MDI) today reported results for its first quarter of fiscal year 2008
ended July 31, 2007.

    
    Highlights
    -------------------------------------------------------------------------
                                                       12 months   12 months
                                                              to          to
    $ millions                                           July 31,    July 31,
    (except earnings per share)    Q1-08       Q1-07        2007        2006
                               ----------  ----------  ----------  ----------
    -------------------------------------------------------------------------

    Revenue                        143.4        94.5       464.4       327.6
    -------------------------------------------------------------------------
    Gross profit                    47.6        30.5       150.2        95.6
      As percentage of sales        33.2%       32.3%       32.3%       29.2%
    -------------------------------------------------------------------------
    Net earnings from continuing
     operations                     18.8        10.1        55.3        27.6
    -------------------------------------------------------------------------
    Earnings per share from
     continuing operations          0.80        0.44        2.38        1.20
    -------------------------------------------------------------------------
    Cash flow from continuing
     operations (*)                 26.2        15.8        85.5        50.5
    -------------------------------------------------------------------------
    (*) before changes in working capital


    - Major Drilling posted the highest quarterly revenue in its history with
      revenue of $143.4 million, up 51.7 percent from the $94.5 million
      recorded for the same quarter last year, and 11.2 percent above the
      previous record high of $129.0 million recorded in the fourth quarter
      of fiscal 2007.

    - Gross margin percentage for the quarter was 33.2 percent, up from
      32.3 percent for the corresponding period last year.

    - Earnings from continuing operations were $18.8 million or $0.80 per
      share for the quarter, up 86.1 percent from the $10.1 million or
      $0.44 per share for the prior year quarter. This represents the highest
      quarterly earnings from continuing operations in the Company's history.

    - Net earnings for the quarter, after gains from discontinued operations,
      were $18.9 million or $0.81 per share. This compares to $22.9 million
      or $0.99 per share for the prior year quarter, which included a gain
      from the sale of the manufacturing division.

    - Cash flow from continuing operations before changes in working capital
      was $26.2 million for the quarter compared to $15.8 million for the
      same period last year.

    - Subsequent to quarter end, the Company announced the acquisition of
      Harris Drilling in Chile for US$22.7 million.

    "We continue to show good progress in delivering strong top and bottom
line performance," said Francis McGuire, President and CEO of Major Drilling.
"Overall revenue for the quarter was up more than 51 percent over the same
quarter last year with all of the Company's divisions participating in this
growth. Revenue in Australia, Asia and Africa was up over 58 percent, with
more than 40 percent of the region's increase coming from the recently
acquired southern African divisions. South and Central American revenue was up
56 percent, all of it coming from internal growth. Finally, Canada-U.S.
revenue grew by 43 percent," noted Mr. McGuire. "Revenue growth was somewhat
impacted by the strengthening of the Canadian dollar against both U.S. and
Australian currencies. The estimated unfavourable foreign exchange translation
impact on revenue compared to the prior year quarter was $2.0 million,
although the estimated unfavourable translation impact on net earnings was
less than $0.5 million."
    "Overall margins showed improvement year-over-year despite continuing
pressure on labour costs and African margins still lagging behind other
regions. Investment in training, which is crucial to our continuing growth,
continues to affect overall margin growth as we incur both additional costs
and lower productivity. In southern Africa, we expect margins to gradually
improve as we increase our double shifting and improve our infrastructure,"
said Mr. McGuire. "South America had the usual first quarter dip in margins as
compared to the fourth quarter as we moved through the winter season, during
which the frequency of mobilizations and demobilizations increases."
    "Cash flow from continuing operations before changes in working capital in
the quarter continued to strengthen, increasing 65.8 percent to $26.2 million
compared to the $15.8 million recorded in the prior year quarter," noted Mr.
McGuire. "The Company continued to invest heavily in its capital expenditure
program, spending $15.0 million during the quarter to ensure continued growth.
Our inventory levels were also increased in order to guard against supply
interruptions."
    "Despite recent volatility in commodity prices, the fundamental drivers of
our business remain relatively unchanged. Gold continues to account for about
half of the exploration activity and the Company's revenue. The supply of
metals is expected to remain relatively tight for the foreseeable future as
mineral companies continue to search for significant discoveries. Gold prices
have remained relatively stable. Metal prices such as copper, zinc, uranium
and nickel are still well above the economical thresholds required for
exploration due to the tightness of supply," noted Mr. McGuire.
    "The Company continues to look for its growth to come from additional
investments in people and equipment, strong market conditions and from Africa.
During the first quarter, we took delivery of 15 new rigs and we expect to get
19 more in the second quarter as we continue to see an overall increase in
demand for the Company's services, creating a favorable pricing environment.
In Africa, utilization continues to grow as we are having success in
recruiting drillers and in double shifting our rigs," noted Mr. McGuire.
    "Finally, we will have additional growth from the Harris acquisition. As
announced on September 6, 2007, we are very pleased to welcome Harris Drilling
and its employees into the Major Drilling group. Harris has been operating in
Chile since 1981 and has an excellent reputation with its clients. This
acquisition provides us with additional assets, experienced drillers and
existing contracts in Chile. We anticipate the Harris operation will produce
additional revenue of approximately US$11 million for the remaining eight
months of our fiscal year, ending April 30, 2008," stated Mr. McGuire.

    First quarter ended July 31, 2007

    Total revenue from continuing operations for the quarter was
$143.4 million, up $48.9 million or 51.7 percent from the $94.5 million
recorded in the same quarter last year.
    Revenue for the quarter from Canada-U.S. drilling operations increased by
42.9 percent to $49.3 million compared to $34.5 million for the same period
last year. Additional equipment and improved pricing contributed to this
growth.
    South and Central American revenue was at $42.5 million for the quarter,
up 55.7 percent from the $27.3 million posted for the prior year quarter.
Revenue growth was driven primarily by Mexico, Venezuela and Chile, which
combined for almost 90 percent of the region's growth over the prior year
quarter as demand continues to be strong.
    Australian, Asian and African operations reported revenue of
$51.6 million, up some 58 percent from the $32.6 million reported in the same
period last year. The recently acquired southern African operations
contributed 41.2 percent of the region's growth. Australia, Indonesia and
Tanzania showed good revenue growth in the quarter compared to the same period
last year. Mongolian revenue was down slightly as the mining industry in that
country continues to struggle with uncertainty relating to government mining
policies, which delayed many project startups. Also during the quarter, the
Company started operations in Armenia and expects to have up to six rigs in
operation by the fourth quarter of this year.
    The overall gross margin percentage for the quarter improved to
33.2 percent compared to 32.3 percent for the same period last year. Good
margin improvements in South and Central America, U.S. and Australia, were
muted somewhat by labour productivity issues in Canada, by lower margins in
the new African operation and by reduced margins in Mongolia as uncertainty in
government mining policies delayed many project startups.
    General and administrative costs were $10.0 million for the quarter,
compared to $7.2 million in the same period last year. The increase is
primarily due to the African acquisition and increased administrative salary
expenses and staffing levels.
    Other expenses for the quarter increased to $3.5 million, up from
$2.8 million in the prior year quarter, due primarily to higher incentive
compensation expenses given the Company's improved profitability in the
current year.
    Foreign exchange loss in the quarter was $1.0 million compared to
$0.3 million in the prior year quarter as a result of unfavourable variation
in the U.S. dollar against the Canadian dollar.
    Short-term interest revenue was $0.3 million for the quarter compared to
an expense of $0.3 million for the same quarter last year, while interest on
long-term debt was $0.7 million compared to $0.6 million for the same quarter
last year.
    Amortization expense was $6.1 million for the quarter compared to
$4.4 million for the same quarter last year, as a result of the increased
direct investment in equipment.
    The provision for income tax was $7.9 million in the quarter compared to
$4.8 million for the prior year quarter, reflecting the increased
profitability of the operations.
    Net earnings from continuing operations for the quarter were $18.8 million
or $0.80 per share ($0.79 per share on a diluted basis) compared to $10.1
million or $0.44 per share ($0.43 per share on a diluted basis) in the prior
year period.
    Gain from discontinued operations was $0.1 million or $0.01 per share for
the quarter compared to $12.8 million or $0.55 per share for the same period
last year. Discontinued operations include last year's sale of the
manufacturing division and the termination of operations in China. Gain from
discontinued operations in the first quarter of 2007 largely reflects the gain
of $15.6 million (after income taxes) from the sale of the manufacturing
division, partially offset by a loss in the Chinese operations after
close-down provisions.
    Resulting net earnings were $18.9 million or $0.81 per share ($0.80 per
share on a diluted basis) compared to $22.9 million or $0.99 per share
($0.97 per share on a diluted basis) for the same period last year.
    On a rolling 12-month basis to July 31, 2007, revenue from continuing
operations increased by 41.8 percent to $464.4 million compared to
$327.6 million for the prior year period. Net earnings from continuing
operations, on the same rolling 12-month basis, more than doubled to
$55.3 million from $27.6 million for the corresponding period last year.
    The Annual General Meeting of the shareholders of Major Drilling Group
International Inc. will be held at The Ontario Club, Austin Gallery, 1 King
Street West - 12th Floor, Toronto, Ontario today, September 11, 2007 at
11:00 am EDT.
    Some of the statements contained in this press release may be
forward-looking statements, such as estimates and statements that describe or
are with respect to the future price of minerals and metals, the Company's
future plans, objectives or goals, including words to the effect that the
Company or management expects a stated condition to exist or occur. Since
forward-looking statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Actual results in each
case could differ materially from those currently anticipated in such
statements by reason of factors such as, but not limited to, the factors set
out in the discussion starting on pages 19 to 22 of the 2007 Annual Report
entitled "General Risks and Uncertainties", as filed with the Canadian
Securities Commission (available on SEDAR at www.sedar.com). All such factors
should be considered carefully when making decisions with respect to the
Company. The Company does not undertake to update any forward-looking
statements, including those statements that are incorporated by reference
herein, whether written or oral, that may be made from time to time by or on
its behalf, except in accordance with applicable securities laws.

    Based in Moncton, New Brunswick, Major Drilling Group International Inc.
is one of the world's largest metals and minerals contract drilling service
companies. To support its customers' mining operations and mineral exploration
activities, Major Drilling maintains operations in Canada, the United States,
South and Central America, Australia, Indonesia, Mongolia, Armenia and Africa.

    Financial statements are attached.

    Major Drilling will provide a simultaneous webcast of its quarterly
conference call on Tuesday, September 11, 2007 at 9:00 AM (EDT). To access the
webcast please go to the Major Drilling website at www.majordrilling.com and
click the attached link, or go directly to the CNW Group website at
www.newswire.ca for directions. Participants will require Windows MediaPlayer,
which can be downloaded prior to accessing the call. Please note that this is
listen only mode.


                   Major Drilling Group International Inc.
                    Consolidated Statements of Operations
       (in thousands of Canadian dollars, except per share information)
                                 (unaudited)

                                                         Three months ended
                                                               July 31

                                                            2007        2006
                                                       ----------  ----------

    TOTAL REVENUE                                      $ 143,420   $  94,451

    DIRECT COSTS                                          95,776      63,947

                                                       ----------  ----------
    GROSS PROFIT                                          47,644      30,504
                                                       ----------  ----------
                                                            33.2%       32.3%
    OPERATING EXPENSES
      General and administrative                          10,026       7,231
      Other expenses                                       3,527       2,833
      Foreign exchange loss                                  979         324
      Interest (revenue) expense on short-term debt         (348)        256
      Interest expense on long-term debt                     724         594
      Amortization                                         6,059       4,393
                                                       ----------  ----------
                                                          20,967      15,631
                                                       ----------  ----------
    EARNINGS BEFORE INCOME TAX AND
     DISCONTINUED OPERATIONS                              26,677      14,873
                                                       ----------  ----------
    INCOME TAX - PROVISION
      Current                                              7,570       3,979
      Future                                                 283         844
                                                       ----------  ----------
                                                           7,853       4,823
                                                       ----------  ----------

    EARNINGS FROM CONTINUING OPERATIONS                   18,824      10,050

    GAIN FROM DISCONTINUED OPERATIONS (note 4)               111      12,833
                                                       ----------  ----------

    NET EARNINGS                                       $  18,935   $  22,883
                                                       ----------  ----------
                                                       ----------  ----------

    OTHER COMPREHENSIVE (LOSS) GAIN
      Unrealized (losses) gains on translating
       financial statements of self-sustaining
       foreign operations                                 (7,131)        946
                                                       ----------  ----------

    COMPREHENSIVE EARNINGS                             $  11,804   $  23,829
                                                       ----------  ----------
                                                       ----------  ----------

    EARNINGS PER SHARE FROM CONTINUING OPERATIONS
    ---------------------------------------------
    Basic(*)                                           $    0.80   $    0.44
                                                       ----------  ----------
                                                       ----------  ----------
    Diluted(xx)                                        $    0.79   $    0.43
                                                       ----------  ----------
                                                       ----------  ----------
    EARNINGS PER SHARE
    ------------------
    Basic(*)                                           $    0.81   $    0.99
                                                       ----------  ----------
                                                       ----------  ----------
    Diluted(xx)                                        $    0.80   $    0.97
                                                       ----------  ----------
                                                       ----------  ----------

    (*)  Based on 23,433,503 and 23,064,629 daily weighted average shares
         outstanding for the fiscal year to date 2008 and 2007, respectively.
         The total number of shares outstanding on July 31, 2007 was
         23,552,278

    (xx) Based on 23,806,479 and 23,585,174 daily weighted average shares
         outstanding for the fiscal year to date 2008 and 2007, respectively.


                   Major Drilling Group International Inc.
                 Consolidated Statements of Retained Earnings
                     (in thousands of Canadian dollars)
                                 (unaudited)

                                                         Three months ended
                                                               July 31

                                                            2007        2006
                                                       ----------  ----------

    RETAINED EARNINGS, BEGINNING OF THE PERIOD         $ 108,438   $  49,635


    Net earnings                                          18,935      22,883
                                                       ----------  ----------

    RETAINED EARNINGS, END OF THE PERIOD               $ 127,373   $  72,518
                                                       ----------  ----------
                                                       ----------  ----------


                 Consolidated Statements of Accumulated Other
                             Comprehensive Loss
                     (in thousands of Canadian dollars)
                                 (unaudited)

                                                         Three months ended
                                                               July 31

                                                            2007        2006
                                                       ----------  ----------

    ACCUMULATED OTHER COMPREHENSIVE LOSS,
     BEGINNING OF PERIOD                               $ (30,383)  $ (30,249)

    Unrealized (losses) gains on translating
     financial statements of self-sustaining
     foreign operations                                   (7,131)        946
                                                       ----------  ----------

    ACCUMULATED OTHER COMPREHENSIVE LOSS,
     END OF PERIOD                                     $ (37,514)  $ (29,303)
                                                       ----------  ----------
                                                       ----------  ----------


                   Major Drilling Group International Inc.
                    Consolidated Statements of Cash Flows
                     (in thousands of Canadian dollars)
                                 (unaudited)

                                                         Three months ended
                                                               July 31

                                                            2007        2006
                                                       ----------  ----------

    OPERATING ACTIVITIES
    Earnings from continuing operations                 $ 18,824   $  10,050
    Operating items not involving cash
      Amortization                                         6,059       4,393
      Loss on disposal of capital assets                     104         109
      Future income tax                                      283         844
      Stock-based compensation                               921         361
                                                       ----------  ----------
                                                          26,191      15,757
    Changes in non-cash operating working
     capital items                                       (10,337)     (5,116)
                                                       ----------  ----------
                                                          15,854      10,641

    Loss from discontinued operations, adjusted
     for non-cash items                                        -      (2,500)
    Changes in non-cash operating working capital
     items from discontinued operations                        -       4,427
                                                       ----------  ----------

    Cash flow from operating activities                   15,854      12,568
                                                       ----------  ----------
    FINANCING ACTIVITIES
    Repayment of long-term debt                           (5,159)     (4,124)
    Additional long-term debt                                  -         459
    Repayment of demand loans                                  -     (16,721)
    Issuance of common shares                              1,863         358
    Discontinued operations                               (3,096)          -
                                                       ----------  ----------
    Cash flow used in financing activities                (6,392)    (20,028)
                                                       ----------  ----------

    INVESTING ACTIVITIES
    Net proceeds from sale of discontinued operations          -      28,347
    Acquisition of capital assets, net of direct
     financing                                           (14,531)     (7,317)
    Proceeds from disposal of capital assets                 720         639
    Discontinued operations                                    -        (277)
                                                       ----------  ----------
    Cash flow (used in) from investing activities        (13,811)     21,392
                                                       ----------  ----------

    OTHER ACTIVITIES
    Foreign exchange translation adjustment                  (92)       (848)
                                                       ----------  ----------

    (DECREASE) INCREASE IN CASH                           (4,441)     13,084

    CASH POSITION, BEGINNING OF THE PERIOD                25,022      11,987
                                                       ----------  ----------

    CASH POSITION, END OF THE PERIOD                   $  20,581   $  25,071
                                                       ----------  ----------
                                                       ----------  ----------


                   Major Drilling Group International Inc.
                         Consolidated Balance Sheets
                   As at July 31, 2007 and April 30, 2007
                     (in thousands of Canadian dollars)
                                 (unaudited)

    ASSETS                                                  July       April
                                                            2007        2007
                                                       ----------  ----------

    CURRENT ASSETS
      Cash                                             $  20,581   $  25,022
      Accounts receivable                                 88,597      78,613
      Income tax receivable                                1,162       1,610
      Inventories                                         57,245      50,976
      Prepaid expenses                                     7,302       6,545
      Future income tax assets                             1,890       1,730
      Assets of discontinued operations (note 4)           3,186       3,253
                                                       ----------  ----------
                                                         179,963     167,749

    CAPITAL ASSETS                                       161,590     158,771

    FUTURE INCOME TAX ASSETS                                 574         619

    OTHER ASSETS                                           1,149       1,240
                                                       ----------  ----------

                                                       $ 343,276   $ 328,379
                                                       ----------  ----------
                                                       ----------  ----------

    LIABILITIES

    CURRENT LIABILITIES
      Accounts payable and accrued charges             $  60,920   $  54,484
      Income tax payable                                   6,745       4,121
      Current portion of long-term debt                   10,963      13,649
      Liabilities of discontinued operations (note 4)      6,048       9,463
                                                       ----------  ----------
                                                          84,676      81,717

    LONG-TERM DEBT                                        15,177      18,136

    FUTURE INCOME TAX LIABILITIES                          7,374       7,020

    DEFERRED GAIN                                            474         519
                                                       ----------  ----------
                                                         107,701     107,392
                                                       ----------  ----------

    SHAREHOLDERS' EQUITY
      Share capital                                      139,566     137,703
      Contributed surplus                                  6,150       5,229
      Retained earnings                                  127,373     108,438
      Accumulated other comprehensive loss               (37,514)    (30,383)
                                                       ----------  ----------
                                                         235,575     220,987
                                                       ----------  ----------

                                                       $ 343,276   $ 328,379
                                                       ----------  ----------
                                                       ----------  ----------


    MAJOR DRILLING GROUP INTERNATIONAL INC.
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    FOR THE PERIODS ENDED JULY 31, 2007 AND 2006
    (in thousands of Canadian dollars)

    1. BASIS OF PRESENTATION
    ------------------------

    These interim financial statements were prepared using accounting policies
and methods consistent with those used in the preparation of the Company's
audited financial statements for the year ended April 30, 2007. These interim
financial statements conform in all respects to the requirements of Canadian
generally accepted accounting principles for annual financial statements, with
the exception of certain note disclosures. As a result, these interim
financial statements should be read in conjunction with the Company's audited
financial statements and notes for the year ended April 30, 2007 contained in
the Company's 2007 annual report.

    2. CHANGES IN ACCOUNTING POLICIES
    ---------------------------------

    The Company adopted the Canadian Institute of Chartered Accountants (CICA)
Handbook Section 1530 - Comprehensive Income, Section 3855 - Financial
Instruments - Recognition and Measurement, and Section 3861 - Financial
Instruments - Disclosure and Presentation, and section 3865 - Hedges, on
May 1, 2007.
    As a result of adopting CICA Section 1530, Comprehensive Income, a new
line is included in the Consolidated Statements of Operations under net income
called "other comprehensive (loss) gain" and consists of the gains and losses
from the translation of the Company's self-sustaining foreign operations.
Accumulated other comprehensive loss (AOCL) is presented as a separate
component of the shareholders' equity section in the Consolidated Balance
Sheets. Previously, these gains and losses were deferred in cumulative
translation adjustments within shareholders' equity and are now the only
element included in AOCL.
    As a result of adopting CICA Section 3855, Financial Instruments -
Recognition and Measurement, financial assets classified as loans and
receivables and financial liabilities classified as other liabilities have to
be measured initially at fair value. The adoption of CICA Section 3855 has not
resulted in any changes to the carrying values of financial instruments.
    The Company's financial assets and financial liabilities are classified
and measured as follows:

    Asset/Liability              Classification                Measurement
    ---------------              --------------                -----------
    Cash                         Held for trading              Fair value
    Accounts receivable          Loans and receivables         Amortized cost
    Assets of discontinued       Loans and receivables         Amortized cost
     operations
    Demand loan                  Other financial liabilities   Amortized cost
    Accounts payable and         Other financial liabilities   Amortized cost
     accrued charges
    Long-term debt               Other financial liabilities   Amortized cost
    Liabilities of discontinued  Other financial liabilities   Amortized cost
     operations

    Section 3861 establishes standards for presentation of financial
instruments and non-financial derivatives and identifies the information that
should be disclosed about them.
    The Company does not currently have derivatives and therefore the adoption
of CICA Handbook Section 3865, Hedges, has had no impact on the Company's
financial statements.

    3. SEASONALITY OF OPERATIONS
    ----------------------------

    The geographic distribution of our growth is having an impact on our
historical seasonal patterns. With the exception of the third quarter, the
Company exhibits comparatively less seasonality in quarterly revenue than in
the past since a relatively higher proportion of revenue is coming from
regions with more temperate or tropical climates that are not impacted by
winter weather conditions, and strong cyclical growth tends to mute normal
seasonal patterns. Historically, the Company's operations tended to exhibit a
seasonal pattern whereby its fourth quarter (February to April) was its
strongest. The third quarter (November to January) is normally the Company's
weakest quarter due to the shutdown of mining and exploration activities for
extended periods over the holiday season, particularly in South and Central
America.

    4. DISCONTINUED OPERATIONS
    --------------------------

    On June 7, 2006, the Company sold its manufacturing subsidiary ("UDR") for
A$46.8 million (C$39.2 million). The consideration for the sale was
A$43.3 million (C$36.2 million) cash and a holdback due in 18 months in the
amount of A$3.5 million (C$3.2 million). The net gain before income taxes is
C$22.2 million. UDR previously constituted the Company's entire manufacturing
segment. The Company made the strategic decision to focus its corporate
resources on the mineral drilling business, where it competes as one of the
world's largest contract drillers.
    The Company also made the strategic decision to close its operations in
China in July, 2006. The Company opened a branch in China with the goal of
quickly developing a large pool of Chinese drillers. Having shown little
progress to date in building a pool of local drillers in China, the Company
decided to close the operation. Chinese operations were previously reported
within the Australasian and African segment.
    The gain from discontinued operations is summarized as follows:


                                                        2008 YTD    2007 YTD
                                                       ----------  ----------

    Revenue                                            $       -   $   4,778
                                                       ----------  ----------
                                                       ----------  ----------

    Loss before income tax                                     -      (1,665)
    Net gain from disposal of discontinued
     operations, including write-down of assets,
     before income tax                                       141      20,896
    Income tax expense                                       (30)     (6,398)
                                                       ----------  ----------
    Gain from discontinued operations                  $     111   $  12,833
                                                       ----------  ----------
                                                       ----------  ----------

    The assets and liabilities of discontinued operations are summarized as
follows:

                                                            July       April
                                                            2007        2007
                                                       ----------  ----------
    Current Assets
      Other receivables                                $   3,177   $   3,236
      Other assets                                             9          17
                                                       ----------  ----------
                                                       $   3,186   $   3,253
                                                       ----------  ----------
                                                       ----------  ----------
    Current Liabilities
      Accounts payable                                 $     646   $   3,950
      Income tax payable                                   5,402       5,513
                                                       ----------  ----------
                                                       $   6,048   $   9,463
                                                       ----------  ----------
                                                       ----------  ----------

    5. SEGMENTED INFORMATION
    ------------------------

                                                        2008 YTD    2007 YTD
                                                       ----------  ----------
    Revenue
      Canada - U.S.                                    $  49,337   $  34,518
      South and Central America                           42,461      27,326
      Australia, Asia and Africa                          51,622      32,607
                                                       ----------  ----------
                                                       $ 143,420   $  94,451
                                                       ----------  ----------
                                                       ----------  ----------
    Earnings from continuing operations
      Canada - U.S.                                    $  11,190   $   6,698
      South and Central America                           11,875       5,903
      Australia, Asia and Africa                           9,789       7,077
                                                       ----------  ----------
                                                          32,854      19,678
    Eliminations                                            (292)       (290)
                                                       ----------  ----------
                                                          32,562      19,388
    Interest expense, net                                    376         850
    General corporate expenses                             5,509       3,665
    Income tax                                             7,853       4,823
                                                       ----------  ----------
    Earnings from continuing operations                   18,824      10,050
    Gain from discontinued operations                        111      12,833
                                                       ----------  ----------
    Net earnings                                       $  18,935   $  22,883
                                                       ----------  ----------
                                                       ----------  ----------

    6. RECLASSIFICATIONS
    --------------------

    Certain comparative figures have been reclassified to conform to the
presentation adopted in the current period.


    7. SUBSEQUENT EVENT
    -------------------

    On September 6, 2007, the Company entered into an agreement to purchase
the exploration drilling company Harris y Cia Ltda. ("Harris").
    Through this purchase, Major Drilling will acquire 11 drill rigs, all of
which are currently committed to work on a double shift basis, conducting
mainly specialized drilling in the active northern region of Chile. In
addition, the acquisition involves all support equipment, inventory, an office
and repair facilities. Major Drilling's existing operations are largely in
central and southern Chile and as such this acquisition provides attractive
synergies to assist the Company in fulfilling its strategy of fully servicing
the Chilean specialized drilling market.
    As part of this acquisition, Major Drilling is also acquiring Harris'
existing contracts and retaining key management personnel, as well as the
other employees, including a number of experienced drillers. We anticipate
that the operations of Harris will produce additional revenue of approximately
US$11 million for the balance of our fiscal year, ending April 30, 2008.
    The purchase price for the transaction is US$22.7 million, subject to
customary working capital adjustments, to be financed with cash and debt.
    The transaction is expected to close in mid-September, 2007.
    




For further information:

For further information: Denis Larocque, Chief Financial Officer, (506)
857-8636, Fax: (506) 857-9211, ir@majordrilling.com

Organization Profile

Major Drilling Group International Inc.

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