|April 19, 2007|
Energold Announces Record Year-End Results
|Energold Drilling Corp. (EGD:TSX.V) ("the Company") is pleased to announce its 2006 consolidated results. Earnings for the year were $3,697,000 (2005- $1,087,000), which includes a "dilution gain" on the investment in IMPACT Silver Corp. Gross revenues were $25.5 million on 190,000m of drilling up 71% from gross revenues of $14.9 million in 2005 on 118,000m of drilling. Earnings per share were $0.17 up from $0.05 in the prior year. A dilution gain of $1,177,000, net of future income taxes, on the investment in IMPACT was recorded for the year (2005- $184,000). This "dilution gain" arises when a subsidiary issues its own shares to third party interests, which results in a difference between the Company's share of the proceeds and its carrying value of the subsidiary. |
The Company ended the year with a very strong balance sheet with a net consolidated working capital position of about $18.6 million, an increase of just over $5.0 million from its net consolidated working capital position of $13.5 million at December 31, 2005. Consolidated group cash and cash equivalents at the end of the year were about $10.8 million. A significant portion of our increased working capital position reflects our increased investment to $8.2 million in drilling inventories. Our balance sheet strength also does not reflect the current market value of our equity investment in IMPACT. Based on closing market prices at April 18, 2007 the investment has a current market value of $13 million or $10 million more than our carrying cost. Energold had 22.2 million shares outstanding as of December 31, 2006.
Year-end 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 Inc. and its affiliates. The Company's 16.7% interest in IMPACT Silver Corp. (IPT: TSX.V) is accounted for on an equity basis. As at December 31, 2006, the Company shared a 50% ownership with partners in 17 drill rigs.
The increase in the overall level of activity reflected the existing demand within the industry and the growth of the Company's particular niche within that industry. With the exception of Central America, every region experienced significant growth. The efforts of prior years provided the establishment of the infrastructure necessary to handle this increase and the Company is anticipating further growth in 2007. The Company anticipates the addition of approximately 6-7 new rigs during the period, and plans to more deeply penetrate certain existing markets while expanding into at least one new market.
A webcast discussing the annual results is being been scheduled. Further details will follow.
Energold Drilling Corp. is an environmentally- and socially-sensitive diamond drilling company that services the mining industry. Energold also holds 6.6 million shares of IMPACT Silver Corp. (IPT: TSX-V) and a portfolio of exploration projects 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
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