Master Drilling CEO on why he believes South America will deliver returns this year

Master Drilling CEO, Danie Pretorius, recently shared his optimism about the company's future growth prospects, particularly in South America, during an interview with CNBC Africa. The global mining sector endured significant disruptions due to the COVID-19 pandemic, leading to a 17% decrease in Master Drilling's revenue for the year ended December. Despite the challenges faced in South America, including countries like Chile, Peru, Brazil, and Mexico, which collectively lost $25 million in revenue, Pretorius remains confident in the region's potential for recovery. With current indicators like copper prices in Peru showing promising trends, Pretorius believes that South America could potentially make a significant contribution to the company's top line this year. South America, historically a major revenue generator for Master Drilling, could once again play a significant role in the company's growth trajectory in the near future, provided there are no further disruptions from potential future pandemic waves. Looking ahead, Pretorius discussed the company's stable and healthy order book, currently valued at around $539 million, with a significant portion earmarked for projects in Africa and Scandinavia. The CEO highlighted the potential opportunities in these regions, indicating a pipeline of over $200 million for the year. Africa and Scandinavia are expected to account for approximately 50% of the company's upcoming projects, with the remaining allocations spread across South America and North America. Pretorius also expressed optimism about Master Drilling's ability to benefit from past investments and position itself for a successful future, particularly in light of expected commodity price increases. With significant capital investments made over the years, the company is well-positioned to capitalize on the current market conditions and potentially achieve revenues exceeding $160 million, if not higher. The CEO emphasized the company's readiness to reap the rewards of its strategic investments and capitalize on the expected bull run in the sector. While discussing the investment landscape in South Africa, Pretorius acknowledged the challenges and bottlenecks that have hindered potential growth and investments in the country. He cited issues like regulatory hurdles, bureaucratic processes, and delays in the approval of exploration licenses as key obstacles for foreign investors. Despite these challenges, Pretorius believes that addressing these issues could unlock significant opportunities for investment in South Africa, potentially leading to substantial growth in the sector. Overall, the CEO remains cautiously optimistic about the company's future outlook, with a focus on leveraging its strengths and strategic positioning to drive growth and profitability in the coming years.