|November 28, 2006|
Energold Announces 98% Increase In Year To Date Earnings
|Energold Drilling Corp. ("the Company") is pleased to announce record results for the quarter ended September 30, 2006. Gross drilling revenues for the year-to-date are a record $18.8 million on 140,000 m drilled and for the third quarter are $7.7 million on 56,000 m. The Company recorded a year-to-date profit of $1.974 million ($0.09 EPS) (2005- $.996 million ($0.05 EPS)) and for the third quarter a profit of $1.197 million ($0.05 EPS). This is the largest profit for a quarter since the company began contract drilling.|
The Company continues to maintain a strong balance sheet with a net consolidated working capital position of $17.6 million and consolidated cash position of $7.3 million. Our balance sheet strength also does not reflect the current market value of our equity investment in IMPACT, of which the Company currently owns 6.6 million shares. Based on closing market prices at November 28th, the investment has a current market value in excess of $10 million or approximately $9 million more than our carrying cost. Energold has 22.2 million shares outstanding as of November 20, 2006.
Quarterly Results Comparison (Canadian $ 000's except per-share amounts and meters drilled)
The Company fully consolidates its 50.01%-owned Pac Rim Drilling S.A.C., 50%-owned subsidiary Kluane International Drilling and its affiliates. The Company's 17.5% interest in IMPACT Silver Corp. (IPT: TSX.V) is accounted for on an equity basis.
As part of the Company's expansion strategy, it has commenced offering clients a new form of business arrangement involving up-front client funding to cover a portion of the costs of constructing and equipping a new drill rig. The client receives exclusive use of the rig for a specified period of time. The Company repays the advance by providing a credit towards metres drilled. For clients, this provides a powerful exploration and promotional tool. For the Company, it provides increased expansion capabilities without the commensurate drain on cash resources. The construction of two wholly-owned rigs based on this new arrangement, has already been initiated.
The Company is aggressively developing new markets for its services. It has recently mobilized a Series II portable rig to Argentina and has another Series II rig currently operating in Madagascar. In Mexico, the Company anticipates bringing the number of wholly-owned rigs to eight in 2007 while leaving the door open to increased additions dependent on market conditions.
Investment in drilling supply inventories to support operations has increased by approximately $2 million in the past twelve months, from $5.6 million at September 30, 2005 to $7.6 million at September 30, 2006. This increase in inventory carrying value is attributable to; higher supplier prices, an increase in the number of drills, and larger field inventories. Because of the man portable nature of the equipment and the need to
be self sustaining in remote operating locations, it is estimated that an investment in inventory of approximately $300,000 for each new drill that is put into the field is necessary.
Energold will be reviewing its 2006 Third-Quarter results via the Internet at 4:00 pm ET, 1:00 pm PT, Thursday,
November 30, 2006. The webcast (audio only) can be accessed at:
http://events.onlinebroadcasting.com/energold/113006/index.php and will feature management 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 email@example.com.
Energold Drilling Corp. is an environmentally and socially sensitive diamond drilling company that services the mining industry. Energold also holds a controlling interest in silver miner IMPACT Silver Corp. and a project portfolio in the Dominican Republic.
On behalf of the Directors of Energold Drilling Corp.
"Frederick W. Davidson"
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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