Performance Of The Geodrill Limited Company Essay

Geodrill Limited is an geographic expedition boring contractor, which was incorporated in the Isle of Man in June 1998 and centers its attending on the excavation industry in West Africa. It operates in 3 West African states, which are Burkina Faso, Ghana and the Cote D’Ivoire through an wholly owned subordinate, Geodrill Ghana Limited. The Head Office is located in Accra, Ghana and manages operations throughout the West African part.

However, there are merely two runing entities, Geodrill Ghana Limited and Geodril CI SARL in Cote D’Ivoire. Geodrill Ltd ( Isle of Man ) operates contracts in Burkina Faso. The two entities are whole owned subordinates of Geodrill Ltd ( Isle of Man ) .

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Geodrill Ltd. has 2 issued portions owned by Blue Croft Limited and Red Croft Limited. All drill rigs were bought new except ore 650/1 which was bought 2nd manus in the twelvemonth 2000.

Geodrill started operations in Ghana in 1998 with one UDR 900 multi-purpose drill rig and in 1999 added another.

At the terminal of December 1999, Geodrill owned 10 UDR multi-purpose Drill rigs all with supporters, subsidiary compressors, modern fleet of MAN trucks, track support vehicles and light vehicles.

Geodrill besides owns three nucleus merely Sandvik DE 710 sycophant mounted drill rigs and two Auztex Air core truck mounted rigs. Current enlargement in 2010 includes two extra rigs conveying entire fleet to seventeen.

It is envisaged that by the terminal of 2010 the fleet size in footings of drill rigs will be twenty. The rigs to be added in 2010, while still of the UDR brand ( hold late changed to Sandvik ) depart from bing scheme by being specialized drill rigs. Two of the rigs will offer RAB services while the other offer Air Core. The full care operations of Geodrill Limited is carried out at Anwian Kwanta a suburb of Kumasi in the Ashanti Region of Ghana. It is based on a 10 acre land which has a modern workshop, offices and adjustment for both exiles and subjects. The workshop purely adheres to universe category safety criterions. Our wellness and safety and environmental plan was designed by Tracmin to at a minimal comply with Australian safety criterions.

Ownership and Directors

Geodrill Limited has a Trust set up by Dave Harper, presently the Managing Director of the group. He is besides the Chairman and CEO of Geodrill Ghana Limited, the operating entity in West Africa. The Trust is held by the City Trust house based in Douglas, the Isle of Man, on behalf of the Harper Family Trust of Perth, Australia. It has 2 issued portions. The other manager of Geodrill Ghana Limited is Terry Burling who is besides the Operations Manager of the house.

Figure 1: Organizational Structure of Geodrill

The Organisational Structure

Dave Harper is the Managing Director and CEO. He has about 30 old ages of experience in the boring industry holding worked both in Australia and West Africa. He started working in Ghana in 1991 as General Manager of SMS, an geographic expedition boring house. Mr. Harper, a driller by profession, resigned in 1996 and set up Geodrill 2 old ages subsequently. The Chief executive officer is straight responsible for undertaking flow and undertaking with clients, client dealingss, invoicing and acquisition of major equipment. He besides leads in puting corporate and concern scheme. He is assisted by 2 departmental directors.

Terry Burling is the Operations Manager with 20 old ages of experience in the boring industry. He antecedently worked with SMS in New Zealand, Australia, Papua New Guinea, Indonesia and in Ghana. Fortunately for the company, Terry Burling is an expert in both the mechanical and geographic expedition facets of the profession. His accomplishments span boring, mechanical technology, electrical technology and fiction.

Greg Conroy is the F & A ; A Manager. He has worked in that capacity at several geographic expedition boring and excavation houses including SMS ( Ghana ) , Equigold CI SARL ( Ivory Coast ) . He has over 20 old ages of experience in the industry. Conroy started working with the company in December 2008, holding taken over from a Ghanaian who had been in the place since Geodrill was established and besides antecedently worked with SMS. The F & A ; A Manager is straight responsible for pull offing relationships with all external stakeholders except clients.

The Structure of the Firm

Geodrill has approximately 120 staff organized into 2 sections, Operations and Administration. There are 4 subdivisions under Operationss: Exploration, Maintenance, Stores and HSE.

Exploration performs the boring required by clients ; the nucleus activity of the company. The Exploration workers are organized in crews of 4 per rig per displacement of 12 hours, hence 8 per working day. A Site Supervisor manages all facets of the undertaking being undertaken including a hard currency disbursal budget, adjustment, liaises with the client ‘s representation normally a geologist, and supervises the crew. If it ‘s a big undertaking with 2 or more rigs present, a shop is set-up and stocked with consumables. In this instance excessively there may be one or more supervisor. The Exploration staff typically constitutes about 80 % of the staff strength.

Maintenance provides technology back up services for fixs and care. This subdivision besides fabricates a batch of equipment including heavy responsibility, pneumatic vehicles. They work out of one of the most advanced workshops in West Africa and drive out to offer on-site support in their modified and well-equipped Land Cruiser pick-ups.

The Store subdivision manages the stock of consumables, fuel and trim parts. Though many houses in the industry dainty stock as finance and accounting map because of its consequence on profitableness, Geodrill has placed its Shop as Operationss to better guarantee closer integrating with the nucleus maps of the concern. Decisions on purchases are made with overriding respect to the necessity of the point for undertaking executing instead than cost or any other consideration. Requests routinely originate from the Supervisors and are validated by the Operations Manager.

The Health, Safety and Environment subdivision oversees the design, execution, monitoring and rating of Health, Safety and Enviornment criterions that, at a lower limit, are required to conform to Australian mandated criterions. The Australian criterion is regarded as the most rigorous for boring houses globally and much higher than what is required in Ghana. Puting that as the minimal criterion is a strictly discretional determination by Geodrill ‘s Chief Executive Officer.

The Administration section is made up of Histories, Human Resource, Information Technology and Logistics.

The Accounts subdivision is responsible for all fiscal describing including direction studies and statutory studies. Geodrill tracks income by drill rig and by undertaking. Major direct disbursals such as fuel are tracked by drill rig and undertaking. The Accounts subdivision besides manage the monthly hard currency budget.

Human Resource subdivision co-ordinates with departmental directors in the enlisting procedure, the scene of wages and publicities. Salary degrees are determined harmonizing to the hierarchy ( organisational construction ) and each set has 3 sub-levels. Junior employees earn a basic wage and overtime for work done beyond 8 hours in a weekday. For senior employees, a fixed wage that consolidates both a base wage and overtime is determined and their wage does non vary by the hours done. The subdivision prepares the paysheet and executes payments.

The Logistics subdivision act as a go-between with Stores, and the remainder of the company to guarantee that procurances, imports and exports and in-migration demands for expatriate workers are swimmingly executed.


Geodrill provides Reverse Circulation and Core Drilling services. The object of all prospective boring is to acquire samples from different deepnesss below the surface. The two basic methods are cuttings recovery and nucleus recovery. Reverse circulation boring falls in the first class and diamond nucleus boring in the 2nd.

Reverse Circulation

Rearward Circulation is the method of pick for obtaining systematically high quality stone bit samples with velocity and efficiency. Geodrill provides rearward circulation boring utilizing the latest Face Sampling cocks and equipment boring holes with 140mm diameter to deepnesss of between 50 – 400 metres.

In footings of pricing, this boring methodological analysis is positioned in the center. It is more expensive than RAB and Air Core boring but less dearly-won than diamond boring. It is the most normally used method. It collects samples from deepness by powderizing the stone which is so blown up through an interior tubing and collected in a sample bag.

Diamond Core Drilling

This technique is used to bore to about 1500m deep. A diamond-impregnated drill spot cuts a nucleus of stone hence the name Diamond nucleus. The nucleus sample is removed at intervals and catalogued. This is a much more expensive boring method.

Directional Drilling

Geodrill provides the Deep Directional boring utilizing Down Hole Motor and Wedging ; to command divergence so mark is achieved, to cross marks below unaccessible locations, to change class of a drill hole to cross mark and to let multiple mark intersections by diverting subdivision holes from a parent hole.

Two other types of boring, common in the industry but non antecedently offered by Geodrill, are RAB and Air core boring. These are most ideal for shallow deepnesss, are speedier and cheaper for clients.

Market and Industry

Geodrill ‘s current client list includes Newmount Ghana Gold, Golden Star Resources, Keegam Resources, Perseus Mining, Azumah Resources, Castle Minerals, Lihir Equigold, in Cote d’Ivoire, Ampella Mining and Gryphon Minerals both in Burkina Faso.

Geodrill is presently the market leader in Ghana with approximately 35 % of the market portion. In 2009, 50 % runing capacity in Ghana, 20 % in Cote d’Ivoire and 30 % in Burkina Faso. Geodrill hopes to increase operations in Burkina Faso in the close hereafter as that industry is less concentrated than Ghana in footings of competition and there are a batch of contracts readily available.

For 2010, the order book is full including 2 new rigs on order. Geodrill is still having invitations to tender on contracts all over West Africa in Gold and base metals.

Geodrill ‘s rivals in Ghana are Boart Longyear, AMS geographic expedition, Pontil Minerix, Drillmasters and Burwash.

In Cote d’Ivoire, their rivals are Boart Longyear CI, Ore-ex and Drill ex.

In Burkina Faso, its Boart Longyear BR and West Africa Drilling Services.

Current industry challenges include monetary value fight, and the labour market get downing to fasten.

Opportunities include gold and trade goods roar, an inflow of active geographic expedition companies into West Africa and bettering political stableness in the part.

The excavation, energy and substructure markets are expected to see the hightes neer to medium term growing in the bomber Saharan African part.

In general, mining companies with a higher per centum of long term renewable contracts are viewed as being lower hazard and Geodrill prefers to cover with such clients.

Analysis of the Industry

There is no replacement for geographic expedition boring services in the excavation industry. The geographic expedition procedure progresses from initial surveies of the geological construction of an country, a history of excavation and other indexs of prospective potency. However, existent samples must ever be collected both from the surface and at deepness to find the existent presence of mineral. This aggregation of samples from deepness can merely be done by boring down into the land.

The menace of new entrants likely offers competitory force per unit area to bing houses in the West African market. The excavation industry is made up of many little houses but dominated by a few really big houses. Exploration boring, though it has a touchable terminal merchandise in the signifier of samples, is truly a service and depends every bit much on relationships as on the quality of the sample. It is a capital-intensive concern but any entity that can acquire entree to about $ 3m in start-up capital can get down with a 2nd manus rig, some trim parts and consumables. The geographic expedition boring houses normally operate under the umbrella of the client and so are indirectly regulated hence regulative issues will non impede a start-up.

The geographic expedition boring concern is characterised by short drill programmes ( contract continuance of 3 months to 1 twelvemonth ) . Each drill programme can be decently viewed as a existent option, and determines the following measure for the client. The degree of activity is driven by the easiness of fund-raising on the capital markets and the monetary value of gold as it determines the value of any discovery. The boring service is homogeneous in nature, barely differentiated except by the velocity and efficiency of executing and the safety record of the boring house. There is non much coaction among the houses.

Suppliers of major inputs such as boring consummables are rather powerful when the industry is dining. When the monetary value of gold falls or the capital markets are non making good, there is normally an surplus of serviceable 2nd manus equipment available. This dilutes the power of the providers slightly. The beginnings of consumables are many therefore the providers here are much less powerful than the providers of equipment.

There are two types of clients: Mining houses and geographic expedition houses. The excavation houses have runing mines and earn gross from selling the gold that they mine. The geographic expedition houses hold grants and carry out drill plans to find their possible. Exploration houses do non gain runing grosss ; they earn a return finally by selling the grant if it is proven to hold the potency to give some gold. Therefore, geographic expedition houses finance their drill plans by raising equity on the capital markets.

The clients are really powerful and monetary value medium. Drill plans tend to be one of the largest costs of the client. For both types of clients, it determines the life and value of the concern.

Accounting Policies

Drill rigs undergo major rebuilds to widen their life span every 3 – 5 old ages. The cost is capitalized.

Depreciation rates are 10 % for drill rigs, 20 % as works and equipment, 20 % on motor vehicles, 20 % on furniture and adjustments and 5 % on land and edifices.

Currency of record is the US dollar. Audited fiscal statements are submitted to the internal gross service and revenue enhancements are paid in US dollars.

Geodrill is permitted by the Minerals Commission and Bank of Ghana to have at least 50 % and Bank of Ghana to have at least 50 % of its drilling income in US dollars.

Fiscal twelvemonth ends on 31st December.

Administration Scheme

From origin, direction decided it did non desire a Worker ‘s Union. Management alternatively formed an informal workers commission which is made up of senior employees and who are subjects for that affair. Management so acts as a brotherhood and seeks to guarantee the general public assistance of workers in audience with the workers commission. This is itself is alone in an industry where brotherhoods are common.

2. Geodrill operates merely in West Africa whereas its cardinal rivals operates globally. From Ghana the president who besides doubles as the main executive officer oversees everything. This gives Geodrill the advantage to follow the market more closely and adopt rapidly. For its rivals, there might be a general director heading a peculiar part who will miss concluding authorization on determination devising.

3. Geodrill adheres to a rigorous healthy, safety and environment policy and every bit much as possible used trade name new equipment which are serviced on a regular basis and maintain in top form by the operations section from its workshop which is fitted out with the most advanced equipment needed. Rivals frequently deploy other rigs that have been in service in other parts of the Earth and this gives Geodrilll an border over rivals when it comes to contract executing.

4. Geodrill has more subjects in their top hierarchy than its rivals. Locals are found in direction places normally reserved for exiles among their rivals. This enables direction to maintain the pay measure lower than that of their rivals because subjects independently earn lower than exiles while at the same clip actuating subjects to give off their best because they know the top places are non kept for merely expatriates.

5. Geodrill pays higher than market rates and keeps occupation content interesting so as to pull the best work forces available and besides keep them. To put off full clip lasting employees nevertheless, is hard under the labour Torahs of Ghana and other West African provinces hence Geodrill keeps 80 % of subjects on 2 twelvemonth contracts renewable so far as the company has contracts to back up figure of staff. If rigs become idle so the workers on that rig can be laid off with a month ‘s wage in stead of notice and are recalled when a contract is secured for that rig.


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