Energold Announces Profitable Third Quarter, Revenues Up 155%
Energold Drilling Corp. (EGD: TSX.V) ("Energold" or "the Company") is pleased to
announce continued increased demand for contract drilling services resulting in
a profitable third quarter of $0.8 million in net earnings, which includes a
foreign exchange loss of $379,000 for the period, as compared to a $1.6 million
net loss in the same period of 2009. Revenues in the third quarter were $16.4
million, up 155% from $6.4 million in the same period of 2009.
The Company drilled a new company record of 102,500 meters in the third
quarter, up 136% from 43,500 meters drilled in the same period of 2009, and up
19% from the prior quarter (see Energold
news release dated November 3, 2010). The previous record number of
meters drilled in any quarter was 86,000 meters drilled during the second
quarter of 2010. Furthermore, over 242,900 meters were drilled in the nine
months ended September 30, 2010, up 140% from the comparable period of 2009,
demonstrating continued strong demand for exploration drilling.
The Company remains in excellent financial position with a working capital of
$46.8 million and cash and cash equivalents of $9.3 million and no long-term debt.
The Company's balance sheet strength also does not reflect the market value of
its equity investment in IMPACT Silver Corp. (IPT: TSX-V). The Company's 13.56%
interest in IMPACT Silver Corp. is accounted for on an equity basis. Based on
closing market prices at September 30, 2010, the investment has a quoted market
value of $7.4 million, amounting to $3.5 million more than our carrying value.
Third Quarter Results Comparison
(CAD 000s except per-share amounts and meters drilled)
|
Three Months
Ended
September 30 2010
|
|
|
2010
|
2009
|
% Change
|
Revenues
|
16,359
|
6,408
|
+155
|
Net
Earnings (Loss)
|
839
|
(1,580)
|
n/a
|
Earnings Per Share
|
-
Basic
|
0.02
|
(0.05)
|
n/a
|
|
- Diluted
|
0.02
|
(0.05)
|
n/a
|
Cash
and Cash Equivalents
|
9,298
|
18,460
|
(49)
|
Working Capital
|
46,844
|
46,519
|
+1
|
Meters Drilled
|
102,500
|
43,500
|
+136
|
Rig Fleet
|
100
|
79
|
+27
|
During the quarter, the Company continued to experience a shift towards more
traditional levels of drilling demand. Average revenue per meter increased to
$160 in the third quarter of 2010 as compared to $147 in the third quarter of
2009, in spite of a five-year weaker U.S. dollar. Gross margins for the third
quarter increased to 24.7% from 21.4% in the third quarter 2009, reflecting the
gradual addition of more frontier drilling programs, which command higher rates
and is expected to grow significantly into 2011.
The Company continued its initiative to invest in current and emerging markets
and is seeing renewed interest in both segments in West Africa and South
America, including Brazil and Colombia. The Company also expanded its
investment in rig infrastructure and at September 30, 2010, the Company had
reached its target of 100 rigs, which included delivery of five new surface
drilling rigs in the first two quarters with an additional five new surface
rigs and one new underground rig in the third quarter. Some of the rigs were
outfitted with new inventories and in some cases, upgraded. Two prototype
surface rigs are being designed to access depths beyond 1,000 meters and a
modification to increase the capability of the standard EGD Highly Mobile
Surface Type II rigs is currently underway.
Despite the difficult environment experienced last year, the third quarter of
2010 has shown the continued positive trend as drilling demand is increasing on
a quarterly basis. Energold's strategic goal is to
continue to enhance cash reserves to fuel further growth. Energold's
primary focus continues to be on organic growth through new rig development,
expansion into new markets and a focus on strategic acquisition targets.
The Company will be reviewing its third quarter 2010 results via conference
call at 12:00 pm ET, 9:00 am PT, Tuesday, November 30th. The dial-in numbers
are 1-866-782-8903 or 647-426-1845. Management will be discussing the Company's
financial and operational results ending with a question-and-answer period.
Investors are encouraged to forward any questions they may have to info@energold.com. The recorded conference call can
be accessed at our website on November 30, 2010:
http://www.energold.com/s/Events.asp
Energold Drilling Corp. is an environmentally and
socially-sensitive diamond drilling company that services the international
mining industry. Energold holds 6.6 million shares of
IMPACT Silver Corp.
On behalf of the Directors of Energold Drilling
Corp.,
"Frederick W.
Davidson"
President, CEO
For further information, please contact:
Sunny Pannu - Investor Relations
(604) 681 9501 or via email at info@energold.com
Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Some statements in this news
release contain forward-looking information. These statements include, but are
not limited to, statements with respect to proposed activities, work programs
and future expenditures. These statements address future events and conditions
and, as such, involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by the statements. Such factors include, among others, the
effects of general economic conditions, the price of commodities, changing
foreign exchange rates, actions by government authorities, title matters,
environmental matters, reliance on key personnel, the ability for operational
and other reasons to complete proposed activities and work programs, the need
for additional financing and the timing and amount of expenditures. Energold Drilling Corp. does not assume the obligation to
update any forward-looking statement.
1100 - 543 Granville St.
Vancouver, BC V6C 1X8
www.energold.com
Telephone 604 681 9501
Facsimile 604 681 6813
info@energold.com