What has been AK Drilling's performance over the last months?

2023 has been a quite positive year for us, as we have managed to consolidate our operations both in the northern and southern regions of Peru. In fact, we have seen a 5% growth in Peru compared to 2022, and we have also consolidated ourselves in other countries such as Chile, Panama, and the Dominican Republic in terms of services. We are very grateful to our clients because I believe that the market has reached a phase of maturity where clients do not seek the lowest-priced services, but instead balance safety, production, and price. This holistic approach has been pivotal in maintaining client trust and our operational continuity.

How has inflation affected drilling costs and profits?

Inflation has undeniably affected results and the bottom line of the entire organization. However, we are convinced that success is not only determined by income, but rather by prudent spending practices. Therefore, our approach is based on controlling expenses to achieve the desired results, rather than obsessing over increasing revenues. Pressuring to increase revenues could lead us to sacrifice the quality of our work and jeopardize the stability we have built with our professionals. Our approach aligns with the mature market's values, where clients prioritize quality, safety, and reliability over cost alone. 

What type of exploration is more prevalent in the Peruvian market at the moment?

We have seen a greater inclination towards brownfield projects while the number of greenfield projects, particularly those undertaken by junior companies, has been significantly reduced. 

Currently, approximately 60-70% of our drilling is performed in mining operations. However, we are confident that this trend will reverse in the future. We have observed a significant capital migration towards industries like technology, which paradoxically relies on minerals such as copper. The market has been cautious due to the challenges faced by junior companies in terms of permits and social issues, but we believe that these obstacles are being resolved and that the market will balance out in the coming years, especially in 2025 and 2026.

What capacity does AK Drilling have for lithium exploration?

Currently, our company is not actively engaged in lithium drilling operations, however, we have the necessary technology to do so. Lithium drilling is very similar to water well drilling, given that the mineral is typically found in brines, an aqueous medium. Therefore, the lithium extraction process mainly relies on machinery, equipment, and technology tailored for water well drilling – a domain in which we are market leaders. We are constantly exploring opportunities to execute lithium operations, particularly in Chile. 

How has the implementation of AK Drilling’s new compact drilling equipment progressed?

The implementation of this new equipment has been highly successful. These machines address a specific need in markets with complicated topographies, such as South America, where customers demand portable machines, but this conflicts with their high safety standards. On the one hand, the customers’ safety requirements limit manual handling of heavy loads and establish strict protocols for handling hydrocarbons. On the other hand, when using portable machines, we face the challenge of transporting heavy components and handling hydrocarbons in mountainous terrain, where any spill could have a significant environmental impact. So, to address the needs of our customers while meeting safety and environmental standards, we have introduced these compact machines that can be transported autonomously and even operated remotely, eliminating the need for people to perform these tasks. 

What can we expect from AK Drilling in the near future, and do you have a final message?

AK Drilling remains steadfast in our commitment to sustainable growth, constantly improving our processes and controlling our expenses to continue offering high-quality service. We understand that a company that grows too quickly can lose that personalized treatment that we value so much. At AK Drilling, we know each of our clients by name and have a close and personalized relationship with them. 

I want to express my sincere gratitude to all our current and past clients who have trusted AK Drilling. Their continuous support, even during difficult times like the pandemic, is fundamental to us. We consider ourselves part of a large family not only at AK Drilling but in the entire mining community. Together, we are committed to fostering growth and development in South America.