|November 26, 2009|
Energold Announces Third Quarter Results
|Energold Drilling Corp. ("Energold") is pleased to announce its results for the third quarter. Drilling revenues for the third quarter were $6,408,000. Energold drilled 43,484 meters in the third quarter, up 17% from 37,200 meters in the second quarter of 2009. During the quarter, activity levels were up compared to the prior quarter but due to the weakening U.S. dollar and pricing pressures, Energold did not post a commensurate increase in revenue. The Company expects to continue generating positive cash flow before changes in non-cash working capital. |
Energold incurred a net loss of $1,580,000 largely due to a foreign exchange loss of $1.3 million and future income tax expense of $1.0 million. During the fourth quarter and into the first quarter of 2010, Energold expects to renegotiate a number of its existing contracts replacing them with new contracts reflecting the current U.S. dollar environment.
Energold continues to be in an excellent financial position remaining debt free with an industry leading balance sheet including a working capital position of $47.9 million and cash and cash equivalents of $19.4 million.
Energold has used the slowdown to improve its existing drill fleet as well as develop additional technical ability in complementary activities including underground drilling. A prototype surface rig is currently being designed to access depths beyond 1,000 meters and a modification to increase the capability of standard Series II rigs is currently underway. Due to demand for complementary underground drilling services, Energold took delivery of four new underground drilling rigs in the first nine months of 2009 and one early in the fourth quarter. All five of the underground drills are currently under contract. The underground rigs are similar to existing surface rigs, using approximately ninety percent of the same equipment and supplies as the surface rigs. This substantially reduces crew training time, logistics and inventory requirements.
Energold's strategic goal is to continue to enhance cash reserves to fuel further growth as market conditions improve. While Energold is open to exploring suitable acquisitions, the primary focus will be on organic growth through new rig development and expansion into new markets. With a modern fleet of drilling rigs and continued expansion into new operating regions, Energold has laid the foundation for future growth on five continents. Energold currently has drilling rigs deployed in 17 countries resulting in the ability to react immediately to the growing demand for drilling services.
Looking forward to the balance of 2009 and the first quarter of 2010, Energold is well positioned to benefit as economic conditions continue to improve. The increase in the price of base and precious metals along with the substantial amounts of capital that have been raised in the late summer of 2009 are beginning to be reflected in increasing demand from both major and junior mining companies. On average there is a six month lag period between senior and junior mining companies raising capital and spending it on the ground. Energold has seen drilling activity increase each month with this trend continuing, as October has been the strongest month in 2009. In October, the total number of meters drilled exceeded the total production in the first quarter. While most clients have decided to postpone larger drill contracts until the first quarter of 2010, drilling continues to increase.
Energold will be discussing its 2009 third quarter results and hosting a question-and-answer period via a conference call on Friday, November 27th at 11:00AM PT, 2:00PM ET. The dial-in numbers are 1-866-400-3310 and 416-850-9144. The webcast (audio only) can be accessed after the call has been completed at:
Energold Drilling Corp. is an environmentally and socially sensitive diamond drilling company that services the mining industry.
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.
You can view the Next News Releases item: Tue Feb 9, 2010, Energold Named To The 2010 TSX Venture 50
You can view the Previous News Releases item: Thu Oct 1, 2009, Stock Options Granted
You can return to the main News Releases page, or press the Back button on your browser.