Orbit Garant Drilling
Orbit Garant Drilling, based in Val-d’Or, Quebec, has done something not many companies can say they’ve done successfully – formed a merger of two powerhouse companies to the benefit of both clients and employees. The Canadian mining services company provides diamond drilling for underground and surface exploration, and has a history that rivals the biggest mine services companies in the country.
History of Garant Brothers Diamond Drilling
Garant Brothers Diamond Drilling, one of the two merged companies was established in 1985 by Jean and Robert Garant, brothers and business partners. The company was later sold to Michel Mathieu and Maurice Groleau in 1994, and by this time had earned a stellar reputation in the industry. Mathieu was the son of an experienced miner and businessman, and also owned other successful companies and a long list of contacts in the mining industry. From 1994 to 2006 the company saw massive expansion – from operating 15 to 50 drills in that time. The company became one of the largest underground drillers in Canada.
History of Orbit Drilling
In 1986, during the same time period when the Garant company was establishing itself, brothers Pierre and Bernard Alexandre founded Orbit Drilling. The company specialized in surface and underground diamond drilling and by 1988, the brothers had 4 major contracts. A strong market in the early ‘90s allowed the brothers to expand the business into the international landscape. It was this international success that helped the Orbit team to decide to create an R&D department, in order to further enhance equipment and services. In 1994, the first Orbit drill came out, and this manufactured product leveraged the company’s already expansive international industry coverage. The manufacturing and servicing of Orbit machines, surface and underground rigs, are now done at subsidiary operation Soudure Royale Concept.
With both successful companies on board, Orbit Drilling and Garant Brothers Drilling merged on January 31, 2007. The result: a company that is one of the “largest surface and underground drilling companies in Canada”. Eric Alexandre, President and COO, explains that the merger was definitely an ultimate benefit to all involved. The Orbit Garant website echoes his reflections: “The combination of the two companies has enabled them to consolidate their resources and provide better service to their customers”. Alexandre says that a careful amount of planning and resources went into doing the major merger, and several elements had to be considered. “One of the things to be considered was the name of the company” he recalls. “We wanted to show the employees that one company had not taken over the other – hence the name Orbit Garant. We were very successful with that strategy. We met with all the employees on each side and offered them all stable, quality jobs.” Alexandre adds that “within four to five months the merger had been absorbed and employees were happy to see that they were working in good conditions with a good company”.
The company believes that the merger has created an excellent opportunity for growth and expansion, and from what Alexandre says about the business – there is no reason to expect otherwise.
The project pipeline
Orbit Garant currently has almost 500 employees, and operates 134 drills. They have an impressive list of clients including GoldCorp and Xstrata, and take their business internationally into the US, Mexico, Suriname, and Guyana. Alexandre says that although the economy took a turn for the worst last year, the business is in fine standing, because of solid relationships with their loyal customers. “Sixty per cent of our revenue is specialized drilling service. Because of that revenue our contracts are typically two to three years in length and we already have agreements with all of our clients. Those budgets have already been laid out. We have minimal meters to drill for those projects and we are in line with all of them and haven’t seen any cut backs” Alexandre assures.
He explains that with major and intermediate companies, such as Xstrata, things move along even during tough times. The difficulty, according to Alexandre, is with the junior mining companies in the base metal sector. “We have increased our portion of revenue that comes from gold, because we are located in Val D’Or and most of the business in the area comes from gold exploration – our company sees stability in that” he says.
Orbit Garant has seen demand drop from clients that used to be active with them, but the demand from intermediate and top-tier companies is strong. As juniors struggle to get financing for their projects, Orbit Garant keeps their eye on stable revenue. “We keep having activity [from the juniors], but it’s not like a year to a year and a half ago when we saw the demand coming from everywhere.”
The competitive advantage
Orbit Garant have been public since June 26th, 2008. Since then, the economy has taken a steep downturn, and many companies have had to regroup and figure out ways to stay afloat. When Orbit Garant were going public, they had an advantage despite the economic crisis. Alexandre explains: “We have a very strong presence in the Canadian market, so we’ve been able to stay stable more so than our peers. In addition, 95 per cent of our revenues are in Canadian dollars, so we don’t have affects on our revenues from the currency standpoint”.
The international business activity that Orbit Garant enjoys is because they have international clients, and Orbit Garant “follows them where they go”.
“Our customers know what we can do and we usually have a long relationship with them. We can be efficient and very low cost, and the fact that we build our own machines means that we can adapt to their needs.”
Where an Orbit Garant competitor must rely on outside sources to provide equipment for each project, the company is able to be there on time – a machine can be built within two or three weeks compared with competitors who buy equipment from suppliers and have to wait months. “And we’ll do it at half the cost” Alexandre remarks. It’s clear why IAMGOLD has been an Orbit Garant customer for more than 20 years, and why Xstrata has stuck with them for more than a decade.
Orbit Garant recently signed a contract with Rubicon Minerals Corporation to provide underground drilling services at the company’s Phoenix Gold Project in Red Lake, Ontario. Under the agreement, Orbit Garant expects to conduct 40,000 metres of drilling at the Phoenix Project. They anticipate using up to four drill rigs to carry out the project. There are many other projects on the horizon for Orbit Garant in the near future as well.
In addition to new contracts, Alexandre expects to continue implementing a lean management strategy that was started in October of last year to increase operational efficiency. The company also runs a training school for foremen, drillers, and drillers’ helpers, and they plan to continue developing that initiative. The company runs their own health and safety programs in addition to what is mandated by the province and federal government – they were recognized in 2006 by the MASHA (Mines and Aggregates Safety and Health Association) for industry-leading performance in the prevention of workplace incidents. Alexandre says that the company plans to be the “number one player in health and safety”.
With plans to grow the business and improve health and safety initiatives, Orbit Garant is well positioned to be a leader in all scopes of their business for years to come.
For more information, visit www.orbitgarant.com.