|April 23, 2008|
Energold Announces Record Year-End Results Net Earnings Up 129% And Number Of Meters Drilled Up 63%
|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)
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"
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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