A growing sense of caution gripping the mining industry is having a big impact on exploration service providers such as Major Drilling Group International Inc, which posted a quarterly loss on Monday and offered little hope of an early turnaround.

The mining sector’s new emphasis on austerity in the face of stagnant metal prices has led to a sharp pullback in exploration spending. Juniors and more established miners alike have delayed or canceled exploration programs, clouding the outlook for Major and its rivals for years.

Major Drilling Chief Executive Francis McGuire, speaking on the sidelines of the Prospectors and Developers Association of Canada (PDAC) convention in Toronto, said he saw some potential for a brighter outlook during mid-year, but a full turnaround depended largely on the return of small explorers to the market.

“We are not going to see the peaks of activity in the exploration markets that we saw in the first half of 2012, which was an all-time high,” he said. “It’s going to take several years before we get back there. It really takes the juniors to come back in.”

His comments followed the release of a study by SNL Metals Economics Group warning that a three-year surge in exploration spending would likely come to a grinding halt this year.

The study said a sharp decline in financing for miners with early-stage exploration projects would crimp how much they spend to find and outline new mineral deposits. Spending rose to a record $21.5 billion in 2012.

Major Drilling, the world’s second largest metal and mineral exploration drilling company, behind Boart Longyear Ltd, is a bellwether of activity in the mining industry.

With many of the senior mining companies now undertaking major operational reviews, customers are booking shorter-term contracts and starting with just a fraction of their drilling activity last year, said McGuire.

“Everybody’s being a little bit careful,” he said. “There’s a base of work, but it’s going to be slow materializing this year as they take their time to do things.”

The Moncton, New Brunswick-based company warned that volatility in the mining sector would crimp revenue in the current quarter.

The company’s stock closed down 3.88 percent at C$8.42 on Monday on the Toronto Stock Exchange.

Major Drilling reported a loss of C$4.3 million, or 5 Canadian cents a share, in the fiscal third quarter ended Jan. 31. That compared with a profit of C$9.6 million, or 12 Canadian cents a share, a year earlier.

Quarterly revenue fell 32 percent to C$123.2 million.

Metal and mineral explorers, which depend heavily on equity financing to raise capital to fund drilling programs, flock to PDAC’s Toronto event each year in search of willing investors to fund the programs.

Investors have panicked this year, leading many to shun the sector, due to lackluster metal prices and weak shareholder returns from some of the world’s largest precious and base metal miners.

And it is not just the juniors, but also the intermediate- and large-cap miners that are looking to cut costs, as CEOs of many of the world’s top miners have faced the axe in recent months in the face of spiraling costs and writedowns.

Iamgold Corp said Monday it aimed to reinforce its financial position and improve its return on capital by cutting annualized spending by $100 million.

The mid-sized Canadian gold miner said it would achieve its goal by reducing mine operating costs, exploration expenditures and mine site and administrative costs.