Capital Drilling notes improved demand, wins contract

It also confirmed the award of a four-rig deep hole exploration directional drilling contract by a subsidiary of Canada's Nevsun Resources.

Capital said mobilisation had begun with two newly purchased deep-hole rigs and two from within the existing fleet.

Drilling was expected to start on or before 30 July and be finished by December 2017.

Chief executive Mark Parsons said the increasing mining-industry interest to invest in assets along with the firming of selected metal pricing had injected some momentum in tendering for new contracts and boosted demand from existing clients for its drilling solution services.

"These market conditions, which have been particularly strong in the gold industry, Capital's largest market segment, together with the continued success in our Lean Operating Model, are increasing the utilization of our exploration rigs in line with our growth strategy.

"For the balance of FY 2016 we will continue to focus on further geographic and underground expansion in emerging markets, building on our operational capability to ensure we are appropriately resourced to manage increasing activity levels and diligently managing our costs."

At 12:00 BST, shares in Capital Drilling were up 8.82% to 37p.