|May 29, 2007|
Energold Announces Record First Quarter Results
|Energold Drilling Corp. (EGD: TSX.V) ("Energold" or "the Company") is pleased to announce its 2007 first quarter results. Earnings for the quarter were $819,000 (2006 - $420,000), up 95% from the 2006 earnings, which have been restated to record a dilution gain on the Company's investment in IMPACT Silver Corp (IPT: TSX.V) ("IMPACT"). Gross revenues were $7.47 million on 53,000m of drilling up 82% from gross revenues of $4.10 million on 32,000m in the comparable quarter of 2006. Fully diluted earnings per share were $0.04 up from a restated $0.02 in the comparable quarter. |
The Company ended the quarter with a very strong balance sheet with a net consolidated working capital position of $19.6 million, an increase of over $5.5 million from its net consolidated working capital position of $14.1 million at March 31, 2006. Consolidated group cash and cash equivalents at the end of the quarter were $9.4 million and accounts receivable totalled $7.0 million. The investment in drilling inventories increased to $8.6 million at March 31, 2007. Our balance sheet strength also does not reflect the current market value of our equity investment in IMPACT. Based on closing market prices at May 25, 2007, the investment has a current quoted market value of $10.7 million. This is $7.8 million more than our carrying value. Energold had 22.93 million shares outstanding as of March 31, 2007.
Subsequent to the first quarter end, on May 15, 2007, as part of a private placement, the Company sold 6,830,000 units at a price of $2.20 per unit. Each unit consists of one common share and one-half share purchase warrant. One full warrant entitles the holder to purchase an additional share of the Company at a price of $2.85 per share until May 15, 2008. The Company paid an underwriter's commission in the amount of $1,051,820 and also granted to the underwriter 478,100 "compensation options" entitling the underwriter to acquire up to 478,100 units at a price of $2.20 per unit for a period of twelve months under the same terms and conditions as the private placement. The net funds received from the private placement have been added to the Company's working capital and will be used to enhance the growth of its future operations.
First Quarter Results Comparison (Canadian $ 000's except per-share amounts and meters drilled)
* restated to record dilution gain on investment in IMPACT.
The Company fully consolidates its wholly owned subsidiaries and its 50.01%-owned Pac Rim Drilling S.A.C., and 50%-owned subsidiary Kluane International Drilling Inc. and its affiliates. The Company's 16.4% interest in IMPACT is accounted for on an equity basis. As at the end of March, the Company had a total of 30 drills, either jointly or wholly-owned being mobilized or in the field and a further two drill rigs under construction.
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 added two new rigs during the quarter, and plans to more deeply penetrate certain existing markets while expanding into at least one new market.
The Company will be reviewing its 2007 First Quarter results via the Internet at 4:00 pm ET, 1:00 pm PT, Thursday May 31. The webcast (audio only) can be accessed at:
http://events.onlinebroadcasting.com/energold/053107/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 holds 6.6 million shares of IMPACT Silver Corp.
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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