Energold Announces
Strong Revenues Across All Business Divisions for
Third Quarter 2011
Energold Drilling Corp. (EGD: TSX.V) ("Energold" or "the Company" or "Energold Group") is pleased to announce continued
growth and another profitable quarter reflected by strong demand in all
business divisions of Mineral Drilling, Manufacturing and Energy in the Energold Group.
The Energold Group generated record revenues of $47.0
million, up 188% from $16.4 million in the comparable period in 2010 and up
163% for the nine months ended September 30 2011. For the quarter, the Company
recorded $8.2 million in net earnings or $0.20 earnings-per-share
("EPS"), as compared to $1.1 million net earnings, or $0.03 EPS in
the same period of 2010. Energold earned a record
$0.34 EPS for the nine months ended September 30, 2011, as compared to $0.02
EPS in the same period in 2010. Gross margin increased 253% to $14.5 million
(30.9%) from $4.1 million (25.1%) in 2010. For the nine months ended September
30, 2011, gross margins were $28.3 million (28.8%) as compared to $8.4 million
(22.4%) in 2010. The Company is in excellent financial position with a working
capital position of $72.0 million including cash and cash equivalents of $25.5
million. Energold's strategic goal remains to become
a leading global specialty drilling company.
Third Quarter Results Comparison
(CAD 000s except per-share amounts and meters drilled)
|
Three Months Ended September 30
|
|
|
2011
|
2010
|
% Change
|
Revenues
|
47,033
|
16,359
|
+188
|
Gross Margins
|
14,517
|
4,107
|
+253
|
Gross Margin %
|
30.9
|
25.1
|
+23
|
Net Earnings (Loss)
|
8,190
|
1,084
|
+656
|
Earnings Per Share -
Basic
|
0.20
|
0.03
|
+567
|
- Diluted
|
0.20
|
0.03
|
+567
|
Cash and Cash Equivalents
|
25,508
|
9,298
|
+174
|
Working Capital
|
71,956
|
46,844
|
+54
|
MINERAL DRILLING
The Company drilled 170,300 meters for the quarter, outpacing the previous
Company record number of meters drilled of 155,300 meters recorded in the
second quarter of 2011. The Company drilled a new record of 451,400 meters in
the first nine months of 2011, up 85% from 242,900 meters drilled in the same
period of 2010 (see Energold news release dated November 16, 2011). Due to
the significant demand, Energold completed its tenth
quarter of consecutive growth in meters drilled.
An increasing portion of the drilling mix included 'frontier drilling' oriented
programs primarily in West Africa and South America, with a majority of the
drilling projects worldwide continue to be the more competitively bid
'brownfields' mine site programs. However, as new rigs were built earlier in
the year, an increasing portion of the drilling mix during the quarter has been
shifting towards frontier drilling in areas such as West Africa and South
America.
Revenues for the Mineral Division in the third quarter of 2011 were $31.2
million, up 90% from $16.4 million in the third quarter of 2010, with a year to
date total of $78.7 million. The combination of general price increases on
drilling projects, nominal decreases in cost per-meter and an increase in
higher priced frontier drilling activity increased the average revenue
per-meter to $183 in the third quarter of 2011 as compared to $160 in the third
quarter of 2010. Gross margins from mineral drilling increased to 36.0% in the
quarter, compared to 25.1% in the comparative quarter in 2010. This trend is
expected to accelerate during the balance of the year and into 2012.
At November 23, 2011, the Company had 126 mineral drilling rigs with 3 more on
order. All regions performed strongly with Africa outperforming all markets.
Mexico experienced a significant increase in demand and productivity
contributing to approximately 40% of the total meters drilled for the nine
months ended September 30th, with Brazil, Central America, Peru continuing to
remain active, with significant improvement in Madagascar. Africa's growth
continues to be very strong with approximately one third of the fleet now
located there with most programs devoted to frontier oriented projects and new
projects to introduce larger multipurpose rigs.
Nine Months Results Comparison
(CAD 000s except per-share amounts and meters drilled)
|
Nine
Months Ended September 30
|
|
|
2011
|
2010
|
% Change
|
Revenues
|
98,181
|
37,340
|
+163
|
Gross Margins
|
28,263
|
8,372
|
+238
|
Gross Margin %
|
28.8
|
22.4
|
+28
|
Net Earnings (Loss)
|
13,702
|
793
|
+1,628
|
Earnings Per Share -
Basic
|
0.34
|
0.02
|
+1,600
|
- Diluted
|
0.33
|
0.02
|
+1,550
|
MANUFACTURING
The Company's Manufacturing division, Dando Drilling
International Ltd. (U.K.) ("Dando"), has
experienced continued positive growth and turnaround quarter for the start of
the second half of the year. Year to date the division generated $9.8 million
in revenues at gross margins of 18%, with 20 drilling rig units built and
shipped to organizations in the mining and water well sectors. Eight additional
rigs are on order and procurement of which three rigs will be completed and
delivered by year end. Dando's core business of
providing water well rigs remains strong with further marketing and investment
planned for its multipurpose mineral rigs.
ENERGY
The Company's Energy division, Bertram International Corp.
("Bertram") was very active during the traditionally slower
summer/fall season. The division generated $9.7 million in revenues at gross
margins of 19%, and completed over 19,000 holes and a total of 229,730 meters
from the date of acquisition, July 25 to September 30, 2011. The majority of
drilling programs completed by Bertram were shot-hole seismic projects spread
across five states in the U.S. The summer and fall drilling levels experienced
by Bertram were back to levels not experienced since 2006. Preparations are
well underway to undertake contracted coring services with a number of
international oil and gas clients scheduled for the traditional winter season.
The Company will be reviewing its Third Quarter 2011 results via Conference
Call at 11:30 am ET, 8:30 am PT, Tuesday, November 29, 2011. 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, www.energold.com, on
November 29, 2011.
Energold has also launched a new website and investor
presentation. The address of the new website will remain the same as
www.energold.com. The website has a new, user-friendly interface with concise,
informative content to give visitors to the site a better understanding of Energold's operations.
Energold Drilling Corp. is an environmentally and
socially sensitive diamond drilling company, taking the lead on what is rapidly
becoming the new standard for the mining industry. Energold
holds 7 million shares of IMPACT Silver Corp., a profitable silver producer in
Mexico.
On behalf of the Directors of Energold
Drilling Corp.
"Frederick W. Davidson"
President, CEO