Major Drilling Group International Inc.

The business

Major Drilling Group International, headquartered in Moncton, New Brunswick, describes itself as the largest provider of drilling services to the mining sector. It does contract drilling for mining and mineral-exploration companies in North America, South and Central America, Australasia and Africa. Its services include coring, reverse-circulation, directional, sonic and geotechnical drilling. At the end of July 2026, the fleet stood at 683 rigs.

The company earns its money by putting rigs and crews into the field under contracts with senior mining companies and junior explorers. Revenue therefore depends on global exploration spending, which in turn follows commodity prices, mining-company budgets and the junior financing market. Specialized work, such as deep-hole drilling, remote locations and difficult geology, makes up a large part of the business and typically commands better pricing than conventional drilling.

Activity is now in an upswing. Fiscal 2026 (ended April 30, 2026) brought record annual revenue of $889.1M, up 22%. The first quarter of fiscal 2027 (ended July 31, 2026) then set a quarterly record of $277.3M, up 22.4% year over year, with every region posting double-digit growth.

The moat

The company has scale and global reach. It is the largest drilling contractor focused on mining, with a fleet of several hundred rigs spread across multiple continents and long-standing relationships with senior miners.

Specialized drilling (deep holes, remote and difficult sites) depends on experienced crews and purpose-built equipment that smaller contractors struggle to match.

A conservative balance sheet with net cash lets it keep investing in its fleet and pursue acquisitions through the industry's deep downturns.

Financial snapshot

Most recent reported period : Q1 fiscal 2027 (quarter ended July 31, 2026). Figures reflect the review date — confirm current numbers before acting.

Free cash flow yield & sustainable growth

Free cash flow yield : ≈1.4%FCF TTM $18.54M (to Jul 31, 2026) / market cap ~$1.33B, StockAnalysis, Oct 13, 2026

Free cash flow has fallen steadily as the company reinvested in its fleet and absorbed lower margins: $54.5M in fiscal 2023, $38.5M in fiscal 2024, $28.4M in fiscal 2025 and $20.8M in fiscal 2026. Over the trailing twelve months it was $18.5M, with operating cash flow of $78.7M and capital spending of $60.1M. In Q1 fiscal 2027, rising rig utilization temporarily increased working-capital needs, and company-reported net cash fell to $15.7M.

Management expects rigs to keep moving into the field at gradually higher prices, and margins to improve as ramp-up costs fade. EBITDA rose 15.9% to $37.2M in the July quarter. If revenue growth starts to show up in margins, free cash flow has room to recover toward earlier levels. Cash has also gone to acquisitions: about $93.6M in fiscal 2025 and $7.7M in fiscal 2026.

See the full free-cash-flow yield ranking →

Valuation & what to watch

After a gain of about 42% over the past 52 weeks, Major Drilling trades at about 52 times trailing earnings, according to StockAnalysis (mid-October 2026), and about 22 times forward earnings. Its enterprise value is about $1.31B, slightly below its market cap because of net cash, and about 12 times EV/EBITDA. Trailing earnings are depressed: margins were squeezed by ramp-up costs, labour shortages and trainee crews, so EPS of $0.31 is well below the $0.64 to $0.90 the company earned in fiscal 2023 and 2024.

On cash flow, trailing free cash flow of about $18.5M against a market cap of about $1.33B gives a free-cash-flow yield of roughly 1.4% (StockAnalysis shows a P/FCF near 72). The valuation therefore assumes that higher rig utilization and better pricing will restore margins and cash generation. That is a typical way to price a contractor early in an exploration upcycle, but it leaves the stock exposed if the cycle stalls.

Dividend

Major Drilling does not currently pay a dividend. Free cash flow is reinvested in the rig fleet and in acquisitions, with occasional buybacks (about $11.3M in fiscal 2024).

Risks & the bear case

• Revenue is highly cyclical. It depends on mining-company exploration budgets and on junior explorers' access to financing, both of which can fall sharply when commodity prices drop.
• A tight market for skilled drillers raises costs and lowers productivity as trainee crews ramp up. Management calls labour its most significant challenge.
• The stock trades at a high trailing multiple (about 52x P/E, roughly a 1.4% free-cash-flow yield), so the price assumes a margin recovery that has not yet been delivered.
• Operating in many countries, including in South and Central America and Africa, exposes the company to political, security and currency risk.
• Heavy, continuous capital spending on the fleet absorbs much of operating cash flow.

Recent developments

2026-06-10: Major Drilling reported fiscal 2026 results, with record annual revenue of $889.1M (up 22%), EBITDA of $102.9M and year-end net cash of $20.6M after $61.0M of capital spending.

2026-09-02: First quarter of fiscal 2027 brought record quarterly revenue of $277.3M (+22.4% YoY), EBITDA of $37.2M (+15.9%) and net earnings of $14.5M ($0.18 per share, +43.6%). The fleet ended the quarter at 683 rigs.

2026-09-03: At the annual shareholder meeting, all director nominees were elected.

Verdict

Major Drilling is a high-quality, net-cash way to play a mining-exploration upcycle, and the cycle appears to be turning: revenue is at a record and pricing is improving. The shares already reflect much of that, trading at about 52 times trailing earnings with a free-cash-flow yield near 1.4%. Whether the stock is fairly priced depends on margins and cash flow recovering as utilization rises and labour costs are absorbed. It suits investors who want cyclical exposure to mineral exploration and can tolerate volatility, with the understanding that an exploration slowdown would hurt both earnings and the multiple.