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Energold Consolidates Control Over Drilling Operations
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Energold Drilling Corp. (EGD: TSX.V) ("Energold" or the "Company") is
pleased to announce that it has obtained 100% ownership and control of
its drilling operations in Peru, Brazil, the Dominican Republic,
Nicaragua, Zambia and Vietnam. The increase in the Company's interest
in these operations results from an agreement entered into between
Kluane International Drilling Inc. ("KID"), in which the Company held a
50% interest, and Energold's former joint venture partners in both KID
and in Pac Rim Drilling S.A.C. ("Pac Rim"). As a result of the
transactions, completed over the last two days, Energold now owns,
directly and indirectly, 100% of both KID and Pac Rim. Its former
partner acquired a 100% interest in Kid's subsidiary companies
operating in Ecuador and Guatemala which have 7 drilling rigs.
Prior to entering into this agreement, the Company shared a 50%
interest in 17 drilling rigs with its joint venture partners,
effectively owning an equity income interest in 8.5 drilling rigs.
Following closing of the transactions, the Company will have 100%
interest in all of its 35 drilling rigs, including 10 drill rigs in
which it previously only had a 50% interest.
Fred Davidson, President and CEO of the Company said:
"We are extremely pleased at this new development and believe it is
very beneficial to our Company and shareholders moving forward.
We believe this streamlines the Company from a legal, corporate,
accounting and financial analysis perspective. The Company will be
also become more cost effective and management will be able to focus
totally on their own operations.
We expect to order six additional drilling rigs during the next quarter
and to have at least forty-one rigs by year end. We are actively
expanding and plan to grow into one of the major drilling contractors
in Mexico by mid 2008. We are also planning expansion in other
countries. We now control all our operations and rigs, are well
financed with a strong working capital position with very positive
business prospects."
As part of the agreement, all amounts due to related parties and
non-controlling interests will be settled in full. Following the
closing, Energold will have no long term debt or long term liabilities
outstanding, other than a small allowance for deferred income taxes.
The Company will have the financial strength and capacity to continue
with its planned expansion plans unencumbered by issues involved with
managing joint venture operations. KID will recognize
goodwill and a gain on the sale of its' previously wholly owned
Ecuadorian and Guatemalan subsidiaries to Energold's former joint
venture partners, net of tax thereon.
The Company expects that the implementation of this agreement should
have a positive impact to net income in 2007 and in future years as the
Company capitalizes on the strong growth opportunities that it sees in
Peru, Brazil, the Dominican Republic, Zambia and other countries in
which the Company previously had to share its profits as a result of
being involved in joint venture operations. To protect their mutual
interests and investments, the Company and its former joint venture
partners, have agreed to enter into a 30 month non compete agreement
with respect to countries in which the subject companies were operating
prior to closing.
On behalf of the Directors of Energold Drilling Corp.
"Frederick W. Davidson"
President, CEO
For further information, please contact:
Darrell Rader - Corporate Development
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
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Copyright (c) 2007 ENERGOLD DRILLING CORP. (EGD) All rights reserved.
For more information visit our website at http://www.energold.com/ or
send mailto:info@energold.com
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