Northern Drilling

Growth within our company has been increasing, however with our current contracts and clients, we will soon hit a dead end. Noranda’s contract is about to expire at the end of the year, and even if our contract is renewed, this will only be a temporary solution for our continuous growth. We need to seize the opportunity, bid, win, and execute properly both of the jobs (intermediate and deep) in the Mond Nickel contract and place ourselves as the top major drilling contractor in Canada. This is easier said then done, we currently have a few obstacles before reaching our goal and taking the Mond Nickel contract. Our lack of equipment/machinery, lack of personnel, the uncertainty of geological conditions, and the risk of damaging our client relationship with Noranda are factors we need to take into consideration. As a company we can take advantage of our competitive advantage over the other three mining competitors and build ourselves an even bigger reputation and employee skillset that will put us at an advantage for any future tenders that may arise.

We have three main competitors for the contract; Boart, Major, and Orbit. Major is the only one that has a technical competitive advantage over us, they have the equipment and personnel to perform such a job. Whereas in Northern’s case, we need to, purchase 4 new drills, bulldozers/skidders, and supporting equipment. Other than buying new equipment we can always rent, as long as the rental period of the drill, bulldozer, and supporting equipment per year is less than $ 360,000 (depreciation rate). The outlook for the mining sector is relatively positive, however nothing is certain, yet to establish ourselves as one of the most technically competent drilling contractors I propose in buying 4 new drills along with there supporting equipment and bulldozers; in addition to the four drills that would be made available through the renegotiation with the Noranda contract. Other than the purchase of new equipment our real problem lies in hiring experienced drillers, and being able to submit a detailed profile with our bid on time. This issue can be tackled in several ways; preferably we would like to hire experienced drillers from the market, if the shortage situation doesn’t permit, we can temporary or permanently hire experienced drillers within our company, Cass or InterDrilling. In any case we would need to reshuffle our drillers, with prior notice to Noranda. Drillers will be shuffled based on who has worked on deep jobs and in the Sudbury region. The shuffle of drillers is so that there is at least one experienced driller for every drill on the deep job with prior work experience in Northern Drilling INC. and in the area of drilling exploration. This is to ensure company standards and local knowledge of drill sites. Regarding performance and completion on a timely manner for both jobs we will be adhering to the following schedule in terms of meters to be drilled per year, drills required, and number of shifts, Exhibits 1,2 & 3. As can be seen in Exhibit 4, significant leeway has been given in 2012, for the establishing of the site and getting our drillers in the momentum of drilling. These safety factors of unutilized days are put in place in case of any mistakes, unfavorable geological conditions, yearly vacation of staff, and in favorable conditions we may utilize the days to drill for the year ahead.