Geosearch, one of Africa’s largest exploration drilling companies, is tackling two expansion projects in South and West Africa, has launched an exciting training initiative in East Africa, and is further involved in another expansion project and training operation in South Africa.
Revealing these developments to Mining Review Africa, CEO Mike Fitzgerald says that while Geosearch has continued operating its head office in Johannesburg and three hubs in Botswana, Tanzania and Mozambique, it is now in the process of establishing its fourth hub in West Africa.
“To be based in Dakar, this initiative will be much more of a permanent establishment. We have been awarded a fairly substantial contract in the Ivory Coast by a company called Lihir Gold Limited, and in addition, two of our major clients have strong links to Senegal – AngloGold Ashanti has its West Africa head office in Dakar, and Randgold Resources has significant operations in Senegal and in Mali,” he points out.
“Accessibility into most of the West Africa countries from Senegal is pretty good, logistics are in very good shape, and infrastructure generally has improved tremendously. The Senegalese are also enthusiastic for any foreign direct investment,” Fitzgerald continues.
“Our approach to establishing the new hub is not one of extreme haste, but we would like to be established there by the first quarter of 2011, as we also have some further opportunities down the line in the West Africa region,” he emphasises.
“West Africa will certainly grow the fastest as a hub,” Fitzgerald points out. “There is a great deal of business to be had in countries like Mauritania, Niger, Ghana, Mali, Burkina Faso and Sierra Leone.”
“We also had tremendous growth in our East African hub this year, and on the back of that growth – as was the case prior to the economic crisis – we have come to realise that we are going to run out of skilled employees,” Fitzgerald warns.
“Hence in the fourth quarter of last year we made the decision that we had to train our own prospective employees, mainly future supervisors. We launched an internal initiative and identified a group of 14 people in our company, more than half of them local Tanzanians, and the balance from countries like South Africa, Namibia and Zimbabwe, as well as one each from the United States and Canada.
“We have established a very formal training programme which is in four modules that will be undertaken over two years, and include a theoretical and a huge practical component,” Fitzgerald says.
“The theoretical portion for each module is a six-week period, and once they have completed that they get allocated to different drill sites for their practical training over close to three months, before they come back and start the next module,” he says.
The pilot group of 14 are doing very well after completing two modules. “We only had one individual drop out, and that was for personal reasons – nothing to do with the course, Fitzgerald explains.
“And some of the group are literally ready to run a one-rig operation already in terms of what they have learnt over the past six months,” he points out. “I cannot say for certain but I believe our training school is the first one of its kind on the continent,” Fitzgerald says. “And furthermore, it’s not just about drilling. It’s about basic geology training, being able to understand our clients’ requirements, and a huge amount of management training – setting up sites, how to manage the drill site, and how to manage costs. Safety is an absolute priority, and then there is environmental management. They also get taught how to speak the local language.
Then there’s a further training project for drilling personnel being set up in South Africa, and this is an industry initiative by DITASA – The Drilling Industry Training Association of South Africa. The difference between the two courses is that one is purely an internal Geosearch programme, and the other is an industry initiative.
“I think there will be a linkage between the two training programmes. The initial operator training will happen in South Africa, and the more advanced supervisor’s training will be in the East or West African courses,” he predicts.
Another initiative Geosearch undertook in the first quarter of 2010 was in South Africa, where the company formed a joint venture with a company called OMT Drilling. “It holds 26% and Geosearch SA has 74%, and that has put us in a position to be a fully fledged black empowerment company, which we are naming Buenti Drilling.”
In terms of the requirements under the Mining Charter, the big mining houses are really obliged to give first opportunities to black empowered companies.
“Hence for our company to tender for jobs from these big mining houses it has become imperative to achieve the correct status,” he explains. “OMT Drilling and Geosearch were a good fit and the deal went through very quickly and with no problems. The first contract that we tendered for was an Anglo Platinum exploration contract which is an annual tender awarded to multiple companies,” Fitzgerald continues.
Buenti Drilling was awarded a significant proportion of the contract. “But we will continue operating both companies, because most of Buenti’s skills are around the platinum business, and in terms of our deep hole and ultra deep drilling we have the equipment and the skills,” he adds. “So we won’t be in competition with each other.
“We have had to make significant capital investment into the air drilling side of our business, and within the last six months we have brought in 12 new drill rigs. At the moment our split between air drilling and diamond drilling is probably 60/40 in favour of diamond drilling,” he estimates.
“At least 85% of our business used to be diamond drilling with air drilling taking only 15%, but after October 2008, and once companies built up the confidence to undertake exploration drilling once again, we noticed a big shift towards air drilling. Obviously it’s a cheaper option for them, and it allows them to get fairly significant information from the first phase of their exploration programmes,” Fitzgerald explains.
“We also have an ongoing manufacturing programme in terms of air rigs where we manufacture them to our own specification and for ourselves. As far as costs are concerned you have to talk about a package, because a rig comes with a compressor, sometimes two compressors. To buy it would cost between R8 and R10 million, while manufacturing the rigs involves a R4.5 to R5 million investment.
“Actually, the biggest reason we manufacture ourselves is time – not money. If we put out a tender for a drill rig and they tell us it’s a 12 to 18-week delivery, we will miss the boat. But we can do it ourselves from start of manufacture to delivery in a six-week period,” he says. “Apart from that there is the standardisation of our equipment. If you operate in remote areas you don’t want different types of engines and pumps. “The way we have done our air rigs, many of the hydraulic pumps and motors are interchangeable with our diamond rigs,” he adds.
“Moving out of South Africa, most of our growth is going into the international side of the business – and by that I mean all our activities outside South Africa. That’s where the growth is,” Fitzgerald emphasises.
“We have been active in about 15 countries over the past 12 months – among them Cameroon, Chad, CAR, Ivory Coast, Ethiopia, Kenya, Rwanda, Gabon, DRC, Namibia, Botswana, Mozambique, Malawi, and of course South Africa. And then Senegal is on the way.
“With our increased activity in Africa, we have grown in stature in terms of our client base, and we are becoming recognised as one of the foremost drilling companies on this continent,” Fitzgerald says.