|August 27, 2008|
Energold Announces Record Second Quarter Revenue And Profit
|Energold Drilling Corp. ("Energold") is pleased to announce record 2008 second quarter results. Gross drilling revenues for the second quarter were $11.4 million, up 91% from $6 million in the second quarter of 2007. Net income from continuing operations for the second quarter was $2.4 million, up 54% from $1.5 million. The Company ended the quarter with a very strong balance sheet with a fully consolidated working capital position of $43.6 million. Consolidated group cash and cash equivalents at the end of the quarter were $20.4 million.|
Second Quarter Results Comparison (Canadian $000's except per-share amounts and meters drilled)
Energold has drilled a record number of meters for the second quarter of over 63,000 meters, up 65 per cent from 38,000 meters in the comparable quarter of 2007. For the first six months Energold drilled 120,000 meters (70,000 meters -- 2007). Strong growth in Mexico and Africa provided, once again, the largest increases for the period.
Energold commenced the second quarter with 49 drill rigs. Through the quarter, 20 additional drill rigs were added bringing the total number of rigs operating or being mobilized at the end of the second quarter to 69. However, the effect of these additions on revenues and meters drilled will not become apparent until the second half of the year. Six of these newly added rigs came through acquisition, the remainder through organic growth. Energold ordered another seven drills subsequent to the end of the second quarter. They are anticipated to be delivered over the next three to four months.
Energold's rapid expansion of its drilling capacity is designed to respond to continued significant demand in its industry segment. By the end of the second quarter, the average revenue per meter had risen to $179 per meter compared to $135 per meter in 2007
Investment in drilling supplies inventories to support continuing operations increased to $14.4 million, up from $8.7 million at December 31, 2007. The increase in the carrying values of inventory is attributable to: higher supply prices, outfitting new drill rigs and the decision to increase inventories in the field. Due to the need to be self-sustaining in remote operating locations, Energold estimates that it requires an investment in inventory of approximately $225,000 for each new drill that is put into the field. In certain countries, the Company has also built strategic inventories in order to reduce time delays experienced in clearing customs.
Of the more than 15 countries with ongoing operations, Mexico has become the largest. Energold had approximately 15 rigs in Mexico at the end of the quarter, with two more being mobilized in comparison to four rigs at the end of March 2006. Clientele are primarily larger companies with a considerable portion of the drilling occurring at either existing mines or major projects with multiple drills. With additional crews and improved local logistics, additional rigs (including two underground drills) will be added in response to the continuing demand for the balance of 2008. Energold anticipates ending the year with approximately 20 rigs in Mexico.
Energold is now active throughout most of Latin America and has currently 13 rigs in sub-Sahara Africa, with five more to be delivered to Africa in the third quarter of 2008.
Energold will be discussing its 2008 Second Quarter Earnings results and hosting a question-and-answer period via a conference call at 1:00 pm ET, 10:00 am PT, Thursday, August 28, 2008. The dial-in numbers are (416) 695 9745 and (800) 355 4959. The webcast (audio only) can be accessed at: http://events.onlinebroadcasting.com/energold/082908/index.php.
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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