Jentech Drilling Supply – Well Grounded Business – Dec 2010

Well-grounded business
Rob Sabo12/27/2010

Jentech Business Weekly CompressedJosh Henry, manager of the Elko office of Jentech Drilling Supply, started with the company about five years ago rebuilding parts in the garage of Jentech owner Kim Jensen in Sparks.

Henry parlayed his inauspicious start with the company into a job delivering parts and supplies and rebuilding tools at Elko-area mine sites, and today he manages several employees at Jentech’s most valuable business office.

Kim and Jeannie Jensen founded Jentech Drilling Supply in 2002, and all they wanted to do their first year is make enough money to cover their household expenses. For startup costs the Jensens’ took out a $50,000 mortgage on their home — which they paid back in just three months as business exploded.

Outside of borrowing capital for a new 6,000-square-foot building with a 7,000-square-foot yard on Ingenuity Way off Pyramid Highway, the Jensen’s haven’t had a penny of debt since, President Kim Jensen says.

Jentech employs 12, including four new hires since July. The company expects to hire several additional people next year as well.

“We will be bringing people on pretty steadily,” Jensen says.

Henry, 30, has known Kim Jensen for nearly two decades. He moved to Elko four years ago to better position Jentech to service mining customers.

“Ninety-five percent of our work is in exploration drilling, and Elko is a huge part of our business,” Henry says. “That is why I moved over here, and it has allowed us to be more visible here in the Elko area and be more available for the mines. As soon as I moved out there it gave us opportunities to commit to people we couldn’t commit to before and just put us in the right place.”

Kim Jensen, who had worked in the drilling supply industry for 15 years, founded Jentech in a 28-by 24-foot shop behind the home he occupied with his wife, and started rebuilding drilling tools. The couple purchased a vehicle from a dealership in Idaho to pick up and deliver rebuilt tools to mine sites, and several trusted vendors provided the fledgling company with credit during its infancy.

But the Jensen’s timing couldn’t have been better: During Jentech’s first two years in business gold prices skyrocketed from $300 to $400 and then to $800 an ounce. Today, with gold prices at more than $1,400 an ounce, the Jensens predict their business in 2011 will double from already record levels.

“We happened to catch the gold market on the uptick,” Kim Jensen says. Jentech’s original business model was to provide supplies for blast-hole drilling at mine sites. But as commodities prices rose, the Jensens ventured into exploration drilling supplies, and again added to their revenue stream by supplying drilling fluids to Nevada mines.

After a few years in business the Jensens moved their operations to a 1,500-square-foot facility on Hymer Avenue in Sparks, which allowed room for growth and also provided a much-needed storefront for customers. But they quickly outgrew that facility and moved to their new location using a U.S. Small Business Administration loan packaged by Heritage Bank and the Nevada State Development Corporation.

Jentech, which is purchasing an additional half-acre to expand the footprint of its yard space to store more drilling fluid supplies, also operates a small facility in Elko staffed by Henry.

“They don’t come much better than Josh,” Jeannie Jensen says. “We are a family.”

The Jensen’s two daughters also work for the company.

Barrick and Newmont are two of the company’s largest customers on the mining supply side, as are drilling companies such as Redcor and DeLong Drilling of Winnemucca, and Hardrock Exploration of Elko.

Mine-site safety poses one of the biggest challenges for Jentech employees. Jentech estimates it spends upwards of 40 hours a year per employee on safety training, both in-house and through its mining partners and the Mining Safety and Health Administration.

“Safety is huge,” Jeannie Jensen says.

The business has exceeded all expectations, but the Jensens remain humble about the rapid growth of their company.

“We feel pretty blessed to be where we are at,” Kim Jensen says. “When Jeannie and I started the business we were worried about supporting ourselves and making our house payment. We were able to exceed that and it has been a combination of a lot of experience, blessings, and people around us who want to work and are excited to be here.”