|May 28, 2008|
Energold Announces Record First Quarter Revenue And Profit
|Energold Drilling Corp. ("Energold") is pleased to announce its 2008 first quarter results. Gross drilling revenues for the first quarter were $8.6 million up 48% from $5.8 million in the first quarter of 2007. Net income for the first quarter was $1.7 million, up 116% from $800,000 (including $308,000 from discontinued operations). Energold drilled 56,862 metres in the quarter compared to 31,300 for 2007. The Company ended the quarter with a very strong balance sheet with a fully consolidated working capital position of $36.1 million, an increase of over $16.5 million from its net consolidated working capital position of $19.6 million at March 31, 2007. Consolidated group cash and cash equivalents at the end of the quarter were $20.6 million. |
First Quarter Results Comparison (Canadian $000's except per-share amounts and meters drilled)
The contract drilling industry remains highly cyclical with a slow-down experienced in the months on either side of the Christmas holiday and high season occurring during late summer. The production mix during the quarter varied as more drill contracts reflected price increases driven by the declining U.S. dollar. As a result, the average revenue per meter exceeded $150.00, compared to last year's average of $135.00. As anticipated, start-up situations in new markets and rig mobilizations contributed to increased operating costs. Even with the large number of rigs being mobilized, margins remained at about 40%.
Over the next two to three years, Energold is focusing its efforts on a number of key objectives, including increasing its market share. More of the industry's interest is becoming focused on "frontier areas" where the lack of infrastructure has held back exploration in the past. As a direct result of this, Energold believes that the demand for its style of drilling is expanding faster than the industry as a whole. New contracts and requests for tenders suggest that the balance of 2008 will continue to be extremely busy.
Energold is also continuing its investment in drill rig development. The Series III model continues to provide enhanced depth capabilities well beyond 800 meters. In January 2008, the Series III model was recognized by the prestigious London-based Mining Magazine in the category of Exploration for Capital Equipment. Combined with a new program of redesign and retrofitting of older models, improved performance capabilities from the drill fleet in the coming year are anticipated.
The Company will be discussing its 2008 First Quarter Earnings results and hosting a question-and-answer period via a conference call at 12:00 pm PT, 3:00 pm ET, Monday, June 2, 2008. The dial-in numbers are 416 695 9745 or 800 355 4959.
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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