Own the Drill Rig. Let CED Run It. The Case for Owner-Operated Exploration Drilling
YOU BOUGHT THE DRILL RIG. NOW WHO'S GOING TO RUN IT?
Buying a drill rig is relatively straightforward.
Keeping it drilling?
That's where things get interesting.
Across the mining industry, exploration companies face a familiar choice.
Do we hire a drilling contractor, purchase our own equipment, or find a better way to combine the two?
Traditional drilling contractors offer convenience. They supply equipment and personnel, usually charging against agreed commercial terms.
Owning equipment offers a different proposition. Greater control over the asset, potentially lower long-term costs and the ability to build an exploration drilling capability around your own requirements.
But there's a catch.
Owning a drill rig doesn't automatically make you a drilling company.
You still need experienced operators, supervisors, mechanics, maintenance systems, consumables, spare parts, logistics and somebody who understands what happens when the ground starts fighting back.
That's where Cylinder Exploration Drilling (CED) comes in.
We manufacture and supply drilling equipment.
We also provide drilling personnel and operational management.
And increasingly, we're interested in helping exploration companies build owner-operated drilling programmes without having to build an entire drilling department from scratch.
What Is Owner-Operated Exploration Drilling?
Owner-operated exploration drilling is a model where the mining or exploration company owns the drilling equipment rather than relying exclusively on contractor-owned rigs.
There are different ways to structure it.
Some companies employ their own drilling crews and manage everything internally.
Others retain ownership of the equipment while appointing a specialist drilling company to provide personnel, maintenance and operational management.
CED can support the second model.
You own the equipment. We help run the operation.
That can include Diamond Core, Reverse Circulation (RC), Air Core and specialist remote-access drilling programmes.
The exact responsibilities depend on the agreed scope.
Why Would a Mining Company Want to Own Its Drill Rigs?
Because exploration programmes can become expensive.
Especially when they're successful.
A company might begin with a relatively small drilling campaign.
A few thousand metres.
One rig.
A limited number of targets.
Then the geology delivers something interesting.
The programme expands.
More holes.
Deeper holes.
Another rig.
Another season.
Before long, drilling has become a major recurring expenditure.
At that point, owning equipment deserves serious consideration.
1. Greater Control Over Equipment Availability
Contractor availability can be a problem.
A rig may be committed elsewhere when the exploration team wants to accelerate drilling.
Owning equipment can provide greater scheduling flexibility, provided the company has suitable crews and operational support.
2. Potential Long-Term Cost Savings
Under a conventional drilling contract, the contractor's pricing must account for equipment ownership, financing, depreciation, personnel, maintenance, mobilisation, overheads and commercial risk.
Owning the equipment changes that cost structure.
But it doesn't eliminate those expenses.
It transfers many of them to the equipment owner.
For sufficiently long and well-utilised programmes, ownership may be commercially attractive.
For short or uncertain campaigns, conventional contracting may still be the better option.
The answer is in the numbers, not the sales pitch.
3. Building a Long-Term Exploration Asset
A properly maintained drilling rig can support multiple campaigns over its working life.
Instead of paying for equipment availability through successive contracts, a company may choose to invest in its own fleet.
That equipment can potentially move between projects, subject to local requirements and mobilisation costs.
4. More Control Over Equipment Configuration
Different projects require different machines.
A shallow Air Core campaign has very different requirements from a deep Diamond Core programme.
Owning equipment allows the company to select configurations suited to its intended drilling strategy.
And that's an area where CED can help.
We manufacture equipment across several drilling disciplines.
THE PROBLEM: THE RIG IS ONLY ONE PART OF THE OPERATION
Here's where owner-operated drilling can go wrong.
A company buys a machine.
The machine arrives.
Everybody admires the new equipment.
Then someone asks:
Who's the driller?
Who's the fitter?
Where are the spare hydraulic hoses?
Who ordered the bits?
What happens if the mud pump fails?
Who's managing the night shift?
How many metres of drill string do we actually have?
Suddenly, the purchase price of the rig looks like the easy part.
Drilling equipment is a capital asset. Drilling is an operational discipline.
They are not the same thing.
A successful owner-operated programme requires both.
CED'S MODEL: CLIENT-OWNED EQUIPMENT, SPECIALIST DRILLING MANAGEMENT
CED can work with mining and exploration companies that want to own their drilling equipment while bringing in specialist operational support.
Depending on the project, our involvement can cover:
Experienced drillers and drilling supervisors
Mechanical fitters and maintenance personnel
Rig commissioning and operator training
Consumables and critical spare-parts planning
Drill rods, bits, core barrels and tooling
Mud pumps, compressors and support equipment
Drilling-fluid programmes
Preventative maintenance systems
Shift planning and operational reporting
Mobilisation and field logistics coordination
Expansion into multi-rig operations
The objective is simple.
Give the client the benefits of equipment ownership without expecting them to become drilling specialists overnight.
DIAMOND DRILLING: OWN THE RIG, MANAGE THE METRES
Diamond Core drilling is particularly interesting for owner-operated models.
A mineral exploration company might have a multi-year resource definition programme requiring substantial drilling.
Purchasing a suitable Diamond Core rig could provide long-term equipment availability.
But the quality of the operation still depends on the team.
Drillers need to understand ground conditions, drilling parameters, core recovery, casing requirements, drilling fluids and equipment limitations.
Poor operating practices can quickly destroy the economic case for ownership.
Damaged rods.
Prematurely worn bits.
Lost equipment.
Unnecessary downtime.
Poor core recovery.
CED can supply Diamond drilling equipment alongside the personnel, consumables and technical support needed to operate it.
From compact remote-access rigs through to larger surface Diamond drilling systems, the package should be designed around the actual drilling programme.
Not simply the biggest machine in the brochure.
RC DRILLING: DON'T FORGET THE AIR
Reverse Circulation drilling introduces another important consideration.
An RC rig without the correct compressor is an expensive ornament.
Air volume.
Operating pressure.
Hole diameter.
Depth.
Groundwater.
Hammer selection.
Drill-string configuration.
Sampling requirements.
All need consideration.
For owner-operated RC programmes, CED can help configure complete systems rather than treating the rig and compressor as unrelated purchases.
That includes compressors, rods, hammers, bits, sampling equipment, consumables and spares.
And, where required, experienced personnel to operate and manage the package.
AIR CORE DRILLING: THE VALUE IS IN THE PROGRAMME
Air Core drilling often involves relatively shallow holes across large exploration areas.
The economics depend heavily on operational efficiency.
Rig movement.
Hole setup.
Sample handling.
Consumable availability.
Daily productivity.
Access between targets.
An owner-operated Air Core programme may make sense where a company expects recurring shallow exploration campaigns.
CED can support those programmes with suitable equipment, tooling, compressors, crews and operational planning.
But again, the correct commercial model depends on planned utilisation and operating conditions.
REMOTE EXPLORATION CHANGES EVERYTHING
Now take that owner-operated model and move it into a remote exploration environment.
Jungle.
Mountains.
Desert.
Islands.
Limited roads.
Helicopter access.
Suddenly, a minor missing component can become a major operational problem.
A spare part that costs relatively little may require expensive freight, customs clearance and several days of mobilisation.
That's why CED puts considerable emphasis on planning consumables, critical spares and maintenance before the equipment reaches site.
Remote drilling is not simply about having a portable rig.
It's about having an operation capable of supporting that rig.
CED's man-portable and heli-portable Diamond drilling capability is particularly relevant to exploration companies working in difficult-access terrain.
THE REAL QUESTION: WHAT DOES EACH METRE COST?
Equipment ownership should be evaluated against the full cost of drilling.
Not just the rig purchase price.
Consider a simplified owner-operated cost model:
Total drilling cost per metre =
Equipment depreciation and financing + personnel + fuel + consumables + maintenance + mobilisation + logistics + management + downtime costs
Divided by total productive metres drilled.
The calculation should use realistic utilisation, recovery and productivity assumptions.
A rig drilling consistently over a long programme may produce a very different result from the same rig sitting idle for months.
And difficult ground can change the economics considerably.
A good shift in broken, unstable ground may produce fewer metres than a shift in competent rock.
That doesn't automatically mean the crew is performing poorly.
Metres matter. But ground conditions, hole quality and actual operating costs matter too.
DRILLING CONTRACTOR VS OWNER-OPERATED DRILLING
Consideration | Conventional Contractor | Client-Owned Rig + CED Management |
Equipment ownership | Typically contractor | Client |
Initial equipment investment | Usually lower for client | Higher for client |
Equipment availability | Subject to contract and scheduling | Greater potential control |
Drilling personnel | Contractor supplied | CED can supply |
Maintenance | Typically contractor responsibility | Allocated under management agreement |
Consumables | Contract dependent | Can be supplied or managed by CED |
Long-term economics | Depends on contract rates | Depends on utilisation and total ownership costs |
Residual equipment value | Contractor retains | Client retains |
Neither model wins automatically.
A conventional contractor can be the sensible choice for short-duration programmes or projects with uncertain drilling requirements.
An owner-operated model becomes worth investigating when there is enough predictable work to justify equipment ownership.
CED can discuss both approaches.
WHY BUY EQUIPMENT FROM A COMPANY THAT CAN ALSO OPERATE IT?
This is where CED has an interesting advantage.
We're not simply supplying a machine and wishing the client good luck.
We understand the equipment from a manufacturing and operational perspective.
That allows us to discuss the complete drilling package before the purchase is finalised.
What drill string is required?
Which mud pump?
How many core barrels?
What compressor specification?
What critical spares?
How many operators?
What maintenance intervals?
What support equipment?
What happens when drilling expands?
These conversations should happen before the equipment is shipped.
Not after the first breakdown.
ONE RIG TODAY. THREE RIGS TOMORROW.
Successful exploration programmes rarely remain static.
A company may start with one Diamond rig.
Then add an RC programme.
Then move into resource definition.
Then require deeper drilling.
Then introduce a second shift.
A scalable owner-operated model can allow the equipment fleet to grow alongside the project.
CED can support equipment supply, additional personnel, consumables and operational management as requirements develop.
The objective is to build a drilling capability, not simply complete an equipment transaction.
WHEN DOES OWNER-OPERATED DRILLING MAKE SENSE?
It's worth examining when:
The company expects sustained drilling over multiple campaigns.
Equipment utilisation is likely to remain high.
The exploration programme is sufficiently defined.
Suitable operational management can be secured.
The company wants control over its drilling assets.
There is a credible maintenance and spares strategy.
The economics support the initial capital investment.
It may be less attractive when drilling demand is irregular, the project has a short life or the company doesn't want the responsibility of equipment ownership.
The commercial structure needs to suit the geology, programme and business.
Not the other way around.
CED: MORE THAN A DRILL RIG
CED supplies Diamond, RC, Air Core, underground and specialist drilling equipment.
We also supply the systems required to keep that equipment working.
Drill rigs. Compressors. Pumps. Rods. Bits. Core barrels. Consumables. Critical spares. Experienced crews. Mechanical support. Operational management.
Whether a client wants a conventional drilling contractor, an equipment purchase with commissioning and training, or a client-owned drilling fleet managed by CED, we're interested in finding the right structure.
Because buying the machine is only the beginning.
The real business is getting metres in the ground.
THINKING ABOUT BUYING YOUR OWN EXPLORATION DRILL RIG?
Before making the investment, talk to CED about the complete operation.
Tell us the country, commodity, planned metreage, hole depths, drilling method, ground conditions and expected programme duration.
We'll discuss suitable equipment, supporting systems, consumables, personnel and management requirements.
YOU OWN THE ASSET.
CED CAN PROVIDE THE EXPERIENCE.
TOGETHER, WE KEEP IT DRILLING.
Visit www.cylinder-ed.com to discuss your next exploration drilling programme.
Final question
If your exploration company expects to drill 20,000–50,000 metres over the next few years, would you rather keep hiring contractors or own the rigs and bring in specialists to operate them?
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