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Energold Announces Record Year-End Results Net Earnings Up 129%
And Number Of Meters Drilled Up 63%
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Energold Drilling Corp. (EGD: TSX.V) ("Energold" or "the Company") is
pleased to announce its results for the year ended December 31, 2007.
Earnings for the year were $8,475,000 (2006 -- $3,697,000), up 129 per
cent from the 2006 earnings. Gross revenues were $26.2 million on
192,000 meters of drilling up 63 per cent from gross revenues of $16.5
million in 2006 on 118,000 meters of drilling. The Company also
achieved record net earnings of $3.064 million for the fourth quarter
($0.11 per share basic) from continuing operations.
Year-End Results Comparison (Canadian $000's except per-share amounts
and meters drilled)
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December 31 2007 2006 Percentage of Change
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Gross Revenue (Note 1) 26,200 16,500 63
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Revenue Net of Direct Costs 10,600 4,700 125
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Net Income (Note 2) 8,500 3,700 129
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Earnings Per Share - Basic 0.31 0.17 82
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- Diluted 0.30 0.16 88
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Cash and Term Deposits 20,800 8,200 152
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Consolidated Working Capital 33,800 18,600 82
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Metres Drilled 192,000 118,000 63
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1) Represents only continuing markets.
2) Includes $4.7 million from continuing operations, $2.5 million from
gain on reorganization and $1.2 million from discontinued operations.
Canadian generally accepted accounting principles requires, for
financial statement presentation, that the gain on reorganization and
the discontinued operations be grouped on the income statement for
earnings per share.
The Company ended the year with a very strong balance sheet with a net
consolidated working capital position of $33.8 million, an increase of
over $15.2 million from its net consolidated working capital position
of $18.6 million at December 31, 2006. Consolidated group cash and
cash equivalents at the end of the year were $20.8 million, as compared
to $8.2 million at year-end 2006.
Gross margins remained amongst the highest in the industry and improved
significantly despite the U.S. dollar decline during the year, while
indirect administrative and amortization expenses, as a percentage of
billable revenues, declined to 12.3 percent of revenue in 2007,
compared to 15.0 percent of gross billings in 2006. As a result of the
decline in the U.S. dollar, the Company is actively revising its
contract rates to reflect the change. It is expected that most of the
contracts will be on new rates by the second quarter of 2008.
Inventory was increased during the year by $2.4 million in anticipation
of continued growth as well as to avoid any potential supply shortages.
The Company finds itself in a very strong minerals market with
continued growth anticipated in the long term. With the combination of
a decreasing number of large economic deposits being discovered and the
demand for commodities globally, mineral exploration expenditures will
continue to rise. The senior and intermediate mining clientele that
represent a significant part of the Company's customer base have
increased their 2008 exploration budgets from 2007. Over the last
year, a number of the junior exploration clients have also raised
substantial amounts that should fund their exploration programs through
2008 and beyond.
Latin America has also been a very strong market for the Company's
growth over the years and continues to be a significant source of
revenue. With new rigs and additional contracts, the Company has
strategically positioned itself for future growth in five continents.
The early stage drilling segment of the industry is the primary focus;
however, the Company is more than capable of exploiting the reserve and
in mine drilling. Especially in the sector of frontier exploration
over the last twelve months, the demand has certainly exceeded supply
and with current commodities prices, the Company anticipates ongoing
pressure for mobile drilling services during 2008.
At the beginning of 2007, the Company owned a net of 17 drill rigs and
by the end of the year, a total of 41 drill rigs, with eight more rigs
scheduled for delivery in the first quarter and a further seven in the
second quarter. By mid-summer, therefore, the Company expects to be
mobilizing or have in the field 56 drill rigs, well on our way to
achieving our target of approximately 60 rigs by the end of 2008, all
100 percent owned. It typically takes between two and four months for
a rig to be mobilized into the field and we expect to see increased
levels of production by the second quarter.
The Company's rapid expansion of its drilling capacity is designed to
respond to the very significant demand in its particular industry
segment. The Company intends to remain primarily focused on its
successful, highly-mobile drills that service frontier drilling.
Almost 50 percent of all the new rigs being built have the capability
of the new Series III rigs. Recent field tests with existing
prototypes have provided upgrades that will continue to improve the
Series III model overall performance well beyond the original design
parameters of 700+ meters depth capacity. Combined with a program of
redesign and retrofitting of older models, we anticipate improved
performance capabilities from all our rigs in the coming year.
Over the next two to three years, the Company is focusing its efforts
on a number of key objectives, including increasing our market share.
The Company plans to continue its high rate of investment in research
and development in order to ensure it remains ahead of the industry, as
well as expansion of its product lines to better serve its clients.
The Company will be reviewing its 2008 year-end results on Thursday,
April 24, 2008 at 10:00 A.M., Pacific (1:00 P.M. Eastern). Please
dial-in through (416) 695 9745 / 800-355-4959. The webcast (audio
only) can be accessed at:
http://events.onlinebroadcasting.com/energold/042408/index.php
and will feature management discussing the Company's financial and
operational results and will end with a question-and-answer period.
Energold Drilling Corp. is an environmentally and socially-sensitive
diamond drilling company that services the 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:
Darrell Rader - Corporate Development
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this news release.
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Copyright (c) 2008 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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