margin because of the relative certainty in future revenue In contrast a shortterm contract in the exploration stage at a remote location requiring a lower number of drills would generally command a higher margin Drilling and Stage of Mine Development The contract drilling industry provides drilling services to the mining industry in three stages i exploration drilling ii development drilling and iii production drilling Exploration Drilling The exploration stage in the mining industry also known as the greenfields exploration stage is primarily focused on the drilling on prospective mineral properties to obtain rock chips or core samples to focus on the discovery of mineral deposits In this stage equipment and crews are often deployed to remote locations to undertake exploration drilling on prospective mineral properties in order to determine whether sufficient mineralization exists within a region to justify further exploration Mining companies typically rely on drilling service providers to provide quality core samples as the integrity of the samples is an important factor in determining the potential feasibility of a particular project F ollowing the discovery of a mineral deposit additional drilling is generally required to characterize the size and quality of the deposit and to assess the feasibility of developing the deposit Development Drilling Development stage drilling is typically undertaken to enable reserve and resource definition required for the planning design and construction of new mine sites or the expansion of an existing mining project W ith respect to planning and construction of mine sites mining companies typically add to or enhance their existing drilling services in order to obtain more precise information regarding the mineral reserves and resources to support project financing Production Drilling P roduction stage drilling involves drilling within the property boundaries and includes both surface and underground operations Operating mines require production drilling services to delineate the ore body and for rock mechanics for planning and grade control over the life of the mine P roduction drilling is also required to control or obtain water L arge diameter water production wells are often drilled either to supply the mine with process water or to extract water from the vicinity of the mine to improve mining conditions W ith respect to the expansion stage of a mine additional drilling may assist in the extension of the mine life or allow for more efficient or expanded mining operations Development and production stage drilling activities are typically less susceptible to commodity cycles than exploration stage drilling activities they are driven predominantly by supply and demand fundamentals as operating mines target the highest possible utilization levels Drilling Methodologies and Services P rovided The industry has developed the following drilling methodologies and services to accommodate different environments Diamond Core Drilling Diamond core drilling is used exclusively to obtain nondestructed samples This method utilizes an annular drill bit with an industrialgrade diamond crown that rotates to cut a cylindrical core through solid rock This form of drilling is the most sophisticated form of drilling and therefore commands a higher service margin than other forms of drilling The core barrel assembly used in diamond core drilling enables core samples to be retrieved using a device on a wireline cable through the hollow drill rods The wireline device has the benefit of permitting the core sample to be withdrawn without having to remove the entire string of drill rods from the hole to reach the sample This is of particular importance for deep drilling and for ground conditions that 20