Major Drilling Unveils Normal Course Issuer Bid Initiative
Major Drilling Group International Inc. (“Major Drilling” or the “Company”) (TSX: MDI), a leader in specialized drilling services for the mining sector, has recently announced an initiative accepted by the Toronto Stock Exchange (TSX) to engage in a normal course issuer bid (referred to as the “NCIB Program”). This initiative allows for purchasing common shares directly in accordance to TSX regulations. With plans to acquire up to 4,097,159 common shares over a year, which accounts for around 5% of its outstanding shares, the Company aims to enhance shareholder value.
Understanding the NCIB Program
The shares will be purchased on the open market starting from the specified date in late October through various trading platforms in Canada. Major Drilling intends to pay the prevailing market price during these transactions. The execution of the buyback may vary in timing and quantity, emphasizing Major Drilling's commitment to maintaining optimal share value, as the actual repurchase amount will hinge on market conditions and predefined trading limitations set by the TSX.
Daily Purchase Restrictions
Following the regulations dictated by the TSX Company Manual, Major Drilling's daily purchasing limit is capped at 34,457 shares. This number reflects a quarter of the average daily trading volume observed over the past six months, which is approximately 137,830 shares. On acquiring these shares, Major Drilling will proceed to cancel them, effectively reducing the total number of outstanding shares.
Automatic Share Purchase Plan (ASPP)
To streamline the share repurchase process, Major Drilling plans to implement an Automatic Share Purchase Plan (ASPP) with a designated broker. This strategy will facilitate purchases during periods when corporate actions are restricted, enabling the Company to continue buybacks without regulatory hindrances. The designed broker will manage purchase decisions within parameters outlined by Major Drilling prior to entering any blackout periods.
Rationale Behind the Share Buyback
The decision for the NCIB Program stems from the belief that Major Drilling's inherent value may not always be accurately reflected in market prices. By repurchasing shares, the Management and Board of Directors aim to bolster the interest of existing shareholders while potentially leading to an increased share price. This move signals confidence in the Company’s ongoing operations and strategic direction.
Economic Impact of the Mining Sector
The operational landscape of Major Drilling is influenced by various economic factors that impact demand within the mining industry. Economic conditions influence the activity levels in mining, affecting how services are requested. The Company remains attuned to these fluctuations to maintain effective operational strategies that adapt to changing market dynamics.
About Major Drilling
Major Drilling, established in 1980, stands as the preeminent provider of drilling services for the mining sector globally. The Company caters to diverse customer needs through extensive field operations across key regions, including North America, South America, Australia, Asia, Africa, and Europe. Noted for its resilience and adaptability, Major Drilling has managed to navigate through various economic cycles, thanks to a seasoned management team and regional experts skilled in project management.
With a reputation for excellence, Major Drilling offers a broad array of drilling services, which include but are not limited to reverse circulation, underground and surface coring, directional drilling, geotechnical services, and various other specialized offerings that leverage advanced technology to cater to the evolving needs of the mining sector.
For further information:
Ryan Hanley
Director of Capital Markets
Tel: (506) 227-2426
Fax: (506) 857-9211
ir@majordrilling.com
Frequently Asked Questions
What is the purpose of the NCIB Program?
The NCIB Program allows Major Drilling to repurchase its shares to enhance shareholder value and manage its capital effectively.
What is the maximum number of shares Major Drilling can buy back?
Major Drilling can repurchase up to 4,097,159 shares, which is roughly 5% of its outstanding shares.
What is the Automatic Share Purchase Plan?
The ASPP enables Major Drilling to buy shares even during restricted trading periods, ensuring the continuation of its share repurchase strategy.
How does the NCIB Program benefit shareholders?
By repurchasing shares, Major Drilling aims to increase the proportionate interest of remaining shareholders and potentially improve share prices.
When will the NCIB Program commence?
The NCIB Program is set to commence shortly at the end of October and will run through to late October the following year.
