HARVEY TREMBLAY

Questions

Harvey Tremblay started his career doing carpentry. He then climbed his way up from service work at drill sites, to exploration services, to working as both a driller and a foreman. He bought an off-theshelf JKS-300 drill rig from his old boss and launched Hy-Tech Drilling from his home in 1991. After a couple of small jobs, Harvey landed what turned out to be a nine-year contract. Over the next 30 years and countless completed projects, the company grew to a fleet of 75 drill rigs and 500 employees, operating throughout Canada, the US, Europe, and South America.

Nowadays, Harvey is the Chairman of Hy-Tech and in the past has served as Director of both the Canadian Diamond Drilling Association and the Association for Mineral Exploration in British Columbia.

Grigor Topev: Harvey, thank you for taking the time to answer our questions. Firstly, tell us your current business status and if there are any projects or initiatives you are working on.

Harvey Tremblay: Hy-Tech Drilling has gone through an aggressive period of growth these last few years with projects across Canada, the US, South America and Europe. As we’ve grown, the company has effectively morphed into several companies – including a dedicated R&D arm to create new hardware and software for both surface and underground applications. It’s always been our goal to innovate and improve every aspect of what we do. Now we’re partnering with others who share the same vision, while looking at ways to open up and share many of these new technologies with the industry as a whole.

GT: You began your career in construction. Tell us the story of how you switched to drilling.

HT: I was doing carpentry work for a man named Henk van Alphen, who also happened to own an exploration services company. He asked me to help them build camps in some very remote areas, then one thing led to another. When you’re already out in the field, the jobs just keep coming because it’s too expensive to ship in somebody else. I was putting in the grid lines, setting up the power system, the water system, setting up radio antennas, taking soil samples, and staking new claims. At that time, I was also building drill pads by myself with a chainsaw – not a safe practice these days, but it was a huge learning experience.

Then Henk got his hands on a diamond drill, and everything changed. He’d hired a couple of drillers and I became one of the helpers. These guys wound up quitting as fast as they could be hired, so I was promoted very quickly until I became both the drilller/foreman and the mechanic. I would work on the drill when the season was over, taking it apart, putting it back together, and learning a lot as I went. That’s how it all started.

When the industry went into a downturn, I made a deal with Henk to buy the drill. I only had enough money to pay for half, but another guy came on the scene to buy Henk’s dozer and after chatting for a bit, he offered to buy the other half with me. We went into business together for a few years, then I bought him out.

GT: So, I assume, this is the origin story of Hy-Tech Drilling, right? Where was your first project?

HT: Yes, indeed, the origin of Hy-Tech starts with my old partner Joe Nouch and the offthe-shelf JKS-300, which we’d bought fromHenk. We made a few modifications and ran the drill for two or three years on some small jobs, then Joe decided to get out of it and offered to have me buy him out.

Joe agreed to four payments over two years on a promissory note, so I had to work very hard in a short time. With a deal in place, I was able to get an operating line from the bank using the drill as collateral. It was ‘jump or walk away,’ and I decided to jump in with both feet.

The drill itself came with a small job that had already been booked with a company called Ore Quest, which gave us our start. Our next project was with Peter Holbeck from Homestake, and we were off to the races. These were pretty small jobs, but for one drill it was an ideal way to start. Having to do everything makes you into a very busy person – drilling all day, then going home at night to wrangle parts and supplies.

I had just paid off Joe and set out to build a better drill. At Homestake, a young Andrew Kaip was aware of my plans and called me with a project that required exactly the kind of drilling solution I had in mind. He asked me what I would need to tackle this job. I told him I’d need a CAD 50 000 advance, a contract in hand, and a month to get ready, which he agreed to. This allowed me to tackle a new design that would marry power with portability. Andrew’s project was proof of concept for our design, which then allowed us to land what turned out to be a nine-year job at Eskay – enabling us to build out much of the infrastructure that supports Hy-Tech to this day. When we built our shop, our largest competitor had just been sold and was in the process of shuttering theirs. We had a little corner of Northern BC to ourselves for a few years, along with a fly drill that could do come to life. This all comes back to our quality system to drive improvement.

5000 ft (1524 m). The timing could not have been better.

GT: Please share with our readers the relative size of Hy-tech Drilling today.

HT: We have a fleet of 75 rigs, with no more than 50 turning at any given time. We currently sit at around 500 employees, drilling approximately 600 000 m (1 968 503 ft) on an average year. Hy-Tech Griffith is a recent partnership in South America, where we are operating another dozen rigs on some truly challenging terrain at very high altitudes.

The other thing that stands out is our infrastructure. We pick an area to support, then we invest in it. If we had one drill in every country, it wouldn’t work out the same way. We focus on areas and support them fully.

From day one, innovation was a big part of our DNA. Designing and building our own rigs, shacks, support equipment – it’s again a driver for us to always be better and build better equipment, and we were effectively forced into it because other companies simply wouldn’t build drills the way we wanted them built. Going all the way back, our drill was designed around the specs of personnel-sized helicopters, versus ferrying in a medium sized one. This cut the bill from CAD 50 000 per move to CAD 1000, so it was a very big deal.

GT: What is the most challenging drilling project your company has ever worked on?

HT: The one that really stretched us was called the ‘Sullivan Deeps.’ The Sullivan mine went for over 100 years, but when you looked at the ore body, it felt like only half of it had ever been realized. It was a common belief that half of it was still out there. The company we were working with was confident they had found it, but it also happened to be under the Kimberly Water Catchment Area.

There could be no roads to this site, and they needed us to drill 7000 ft (2134 m). We couldn’t guarantee 7000 ft, because at that point we’d only drilled 5500 ft (1676 m). We had to do a lot of modifications to the drill, but we ended up hitting the horizon of the ore body at 8856 ft (2699.3 m) in two holes, back-to-back. It was quite an unusual thing to tackle, where the best we could promise was to do our best.

GT: What is your approach towards clients and partners and what do you think makes Hy-tech different from other companies? What were/are the key factors for success?

HT: What makes us different, I think, is that we’ve become quite proactive over the years. We have a talented group that used to pride themselves on their responsive firefighting abilities, and now we’ve become more focused on fire prevention. It’s not as ‘exciting,’ but we’ve always been very careful about maintaining quality and making sure that the things we say we’re going to do actually

Funny thing, we ended up trucking in this fly drill, because they got approvals to build a road at the last minute. So, the fly drill never saw any airtime, but it did the job anyway and showed what our little drill could do.

GT: Please share a particularly funny story from your drilling days.

HT: We had just bought the drill from Henk, we had our hands full with two little kids on a farm, we had a mortgage and all the bills that young couples have, and everything was on the line.

Late in that year, I was lucky enough to land a job to drill a project in the coastal mountains in some very challenging terrain.

I wanted to make sure the drill head was in good working order, but we didn’t have a shop to work in. So, I said to my wife, ‘I gotta bring this thing to the house.’ Much to her chagrin, I ended up doing all the work on our kitchen table!

Finally, we took it to work, and it did the job. It’s funny to think about servicing my first drill in our kitchen now, but I definitely wasn’t laughing back then. That’s what it looks like when you start a drilling company with no money. It forces you to be resourceful, because you must get the job done no matter what.

GT: Please share more about your mentors or the people that taught you drilling. What skills did you find useful?

HT: In the beginning, when Henk threw me in the deep end, I thought, ‘How am I going to keep up?’ No one was teaching me, so I figured I would do everything I could to teach myself. I ordered an old book from one of my suppliers called The Diamond Drill Handbook by James D. Cumming, and I studied it from cover to cover. It gave me a good understanding of how drilling had evolved over the years, a complete breakdown of all the tools, the case studies for different challenging projects, and the technical know-how to solve many different problems.

Out in the field, I had the pleasure of working with some old-time drillers – real rugged types who, in their day, would move drills around the bush with the hoisting cable of the drill. The frame of the drill was built like a toboggan, and they would winch themselves from tree to tree. The crazy lives these guys lived inspired me all on their own. It would take days to move from one spot to another, but they got it done. Once they got on a site, they’d make a tripod with three suitable trees and hang a pulley on it to pull rods. This was before hydraulics came into the picture. You had to use a wrench to tighten the jaws and they were all independent, so it was a challenge to keep them centered. This predated carbide inserts, so the steel jaws would get dull, and you’d have to tighten them like you would not believe.

Marcel Carrier was one of those guys who taught me a lot. He’d been all over, and just his stories while we were driving across Canada from North Bay and back – the questions I was asking and his can-do experiences from around the world – it all contributed to making me a better driller.

GT: By chance, I’ve visited a couple of HyTech drill sites. I was always impressed by how mobile, organized, and efficient the working space was. How was that achieved?

HT: When we designed the drill, we made the footprint compact on purpose because we knew we’d be flying. What really shocked people was the fact that this small hydraulic fly drill could also reach 5000 ft (1524 m) in depth.

I think what people see more now is a reflection of the steps we took to manage quality. Adopting ISO 9001 helped us create a culture of constant improvement, where

GT: You have vast experience in the exploration drilling industry. How has it changed since you started?

HT: The beginning was a rough time. Hard hats weren’t even that common. Everyone smoked a lot, drank a lot, and it was rare to see ten fingers on any one person. It was not very disciplined at all. People just went in and did their best and worked very hard.

Drilling depths in the thousands of feet versus hundreds of feet changed our industry immensely. Now, it’s bigger diameter and much deeper than it’s ever been. The equipment used to be all cable with a hoist, a basket, and winches. I called our business Hy-Tech Drilling because I wanted to go all hydraulic. I knew something had to change. I wanted to get out of the baskets and onto the deck. Our focus on hydraulics helped build our company.

‘ We’ve introduced some significant changes for drill performance , information tracking, water management, automation and most recently, new ideas around directional drilling for our customers. Faster, better, cheaper, safer - those are always good goals to have .’ we’re always looking for new ways to add value and reduce any unknown variables. Everything from the motor to the tools is standardized. Everything is brought to one standard, from the way we work to maintaining our drills. We figure out the best way, then we adopt it across the board. It’s saved us all a lot of time and trouble.

GT: Is there a game-changer advancement or a new technology in diamond drilling that you wish existed nowadays?

HT: The advancement I wanted from DAY ONE was understanding what was going on at the bottom of the hole. When the bit was 8000 ft (2438 m) in the ground, and all you had was the sound of the exhaust and gear backlash to interpret, it was more art than science. Things have certainly improved, and we have more gauges that help us, but measurements are still from the surface. This is something that’s being actively worked on by a number of players, but I feel like we’re making real advances towards a solution.

Truly, all our innovations center around better control and better information. We’ve introduced some significant changes for drill performance, information tracking, water management, automation and most recently, new ideas around directional drilling for our customers. Faster, better, cheaper, safer – those are always good goals to have.

On every job, all the rigs are standardized. Europe sees these same rigs mounted on tracks, underground is an entirely different configuration, but it’s all the same components and quality standards at the end of the day.

GT: There is a well-known labor shortage within the industry, particularly in Canada. What do you think companies should do to solve it?

HT: I think it boils down to three things. The first would be automation to increase safety and reduce the physicality of the job, enabling a much larger workforce for us to tap into. The second would be to find ways to bring in more people from abroad.

Lastly, I think the industry needs to do more to educate people around the life of a driller or driller’s helper. The job is kind of mysterious today, in that you have to hear about it from another person who’s already working in it. We can do much more to increase the visibility of our industry, because let’s face it: you’ve really got to have a head in this business. Not everyone gets to be an astronaut. This is a job that’s heavily supported and requires the right kind of person to succeed.

GT: In your opinion what makes a good driller? What qualities should a driller possess in order to advance to foreman and even beyond?

HT: For us, the thing we look for is people that can get the job done, no matter what. It’s the ‘can do’ attitude we need, because there’s a million reasons why it can’t be done. Our people are our people because they can modify and change things up to keep it all moving forward. It’s an attitude.

You also have to be able to work with people. The wrong person in camp simply won’t last. In the end, these people weed themselves out, because everyone has to depend on each other to be successful and safe. It’s all about the team. A healthy camp becomes a very close-knit group, with little tolerance for toxicity.

GT: What is your take on automated rod handlers? I have a feeling that Hy-Tech is not a huge fan of this technology…

HT: We have some rod handlers. We are huge fans of rod handlers. We just need to find a solution that’s practical. The early versions were as big as the drill itself, with too many moving parts.

I do wish we could eliminate the human element from rod handling because that’s where most of the safety and physicality issues happen. And we’re working to come up with a better solution for this – something the industry hasn’t explored enough yet.

If we could achieve this, we could open the industry to more diversity. We are putting in serious work to find a more elegant solution. The current solutions are just a bit too primitive. They cost a lot and take a lot of time. Long term, it’s our goal to create a solution that is cheaper, faster, better and above all, safer.

GT: Considering my background and involvement in directional drilling, I have to ask you: what does directional drilling lack and what would you like to see available?

HT: My view is that we need to find a better solution than the ones that are currently available. They are, for most clients, prohibitively expensive and time-consuming. It’s our goal to lower the cost and reduce the time required for this type of work. Hitting the target every time would be nice to offer if the cost was reasonable.

GT: We are facing increased inflation (among many other difficulties). What are the changes you see in your business?

HT: Wages are far and away our largest cost, but the industry is still experiencing a shortage of workers. We’re always impacted by outside costs like steel because it affects so many of our own estimates. We need to think about these things when we’re bidding.

The cost to finance our growth is another consideration. On the one hand, we have an increase in work. On the other hand, the cost of borrowing is now much higher. The rising risk demands that we be more cautious about the companies we engage with. Do they rely on the market, or do they have their own source of revenue? Organic growth is great if it can be done without taking on significant long-term debt. It’s the small operators that rely on the junior market that are most vulnerable.

GT: Following up from the previous question, what is your advice for drilling company managers and leaders?

HT: Being financially conservative has certainly served us well over the years. The markets rarely go up at the same speed that they go down – the rise is gradual, but the fall can be overnight. We’re in a big upcycle right now, but we all know it won’t stay that way. Being prepared for both success and failure puts you in a better spot.

GT: Harvey, a final question, looking into the next five to ten years… Do you think we will see an increase in diamond drilling activity?

HT: I would say it would be an increase in five, but the next ten are unknown. We may hit an apex before ten years. You can always bet on eventually hitting a saturation point. That would be my guess. I would expect things to ramp up to some level where we can keep up with demand. Today, it feels like there’s just not enough rigs to go around. But these things always get overbuilt, so there’s that. As always, there will be drillers that get checked out along the way. What I can say is there will always be room for big ideas and better solutions, regardless of where the market chooses to take us next. C