Australian drilling contractor Mitchell Services says deployment of 10 underground rigs on new contracts and a “pathway” from 66 to 80 operating surface and underground units by the middle of next year reflects strong demand and increasing tender activity across the minerals sector.
The ASX-listed company this week reported a 25% year-on-year rise in quarterly revenue to A$66.5 million and a 58% jump in EBITDA to $18.7 million for the September quarter.
CEO Andrew Elf said robust gold and copper prices were driving increased exploration and drilling budgets and “some of the strongest market conditions in years”.
Mitchell had 66 of the 93 drill rigs in its fleet active in the September quarter, its FY2027 Q1. The Queensland-based company is one of the rare contractors to provide services to mineral and metallurgical coal underground mines. Underground is about half of its business.
“Market conditions for our services are as strong as they have been for some time, particularly in the underground minerals sector,” Elf said.
“Our clients’ drilling budgets are increasing and enquiry and tender levels across the wider metalliferous business remain strong.
“Whilst the recent increase in coal prices is positive we are yet to see this translate into increased demand for drill rigs.
“The improvement in financial performance was driven by a higher operating rig count, a 7% increase in shifts worked and a 17% increase in revenue per shift, reflecting a high level of operational execution across the business and the absence of any material adverse factors outside our control that could impact operations.”
Mitchell’s projected higher fleet utilisation could underpin higher full-year earnings. Elf said the company had “a strong foundation to build on for the remainder of FY27”.
The company ended September with a $11.9 million cash balance after paying $4.2 million of fully franked dividends. It had $10.8 million of equipment financing debt at the end of the latest quarter.
Mitchell’s share price has climbed more than 9% in the past month and circa-76% so far in 2026, taking its market capitalisation to about $126 million.
