|April 08, 2010|
Energold Announces Year-End Results
|Energold Drilling Corp. (EGD: TSX.V) ("Energold" or "the Company") announces its results for the year ended December 31, 2009. Overall, demand for drilling activity dropped dramatically in the first quarter of 2009; however demand increased each quarter throughout 2009 and the trend is continuing into 2010. Revenues were $23.7 million on 151,333 meters of drilling in 2009, down from revenues of $42.3 million on 237,828 meters of drilling in 2008. Revenues increased each quarter throughout 2009 and came in at $7.2 million in the fourth quarter, up 87% from $3.9 million in the first quarter, and meters drilled increased 145% to 50,159 meters in the fourth quarter from 20,490 meters in the first quarter.|
Energold incurred a net loss of $1.95 million in 2009, largely due to an unrealized foreign exchange loss of $2.0 million. The Company remains in excellent financial position with a very strong balance sheet with a working capital position of $46.5 million and cash and cash equivalents of $18.5 million. The Company's balance sheet strength also does not reflect the current market value of its equity investment in IMPACT Silver Corp. (IPT: TSX-V). The Company's 13.74% (6.6 million shares) interest in IMPACT Silver Corp. is accounted for on an equity basis. Based on closing market prices at April 6, 2009, the investment has a quoted market value of $6.98 million, amounting to $3.3 million more than our carrying value.
Summary of Quarterly and Annual Results ($CAD 000s except per-share amounts and meters drilled)
The Company's strategy for 2009 was to preserve cash, focus on increasing rig utilization rates and expand its markets including diversifying its service offerings. During 2009, the Company experienced a significant reduction in drilling activity as clients were still cautious on exploration budgets. This was mainly due to delays and cancellations of frontier drilling programs. This impacted pricing and created a shift in the Company's business mix towards a greater amount of mine site drilling.
Quarterly Results Comparison (CAD 000s except rig fleet and meters drilled)
Senior and intermediate base metal and gold mining companies were successful in raising substantial amounts of capital in 2009. It is expected that with greater amounts of cash and financial flexibility, our clients will further increase the demand for drilling services in 2010. In the drilling industry, price tends to follow demand and thus as demand increases, we expect to see drilling price increases once again in late 2010.
At December 31 2009, the Company had a total of 80 rigs, which included five new rigs delivered in 2009. The Company continues to expand its rig fleet with a target of 100 rigs by year-end 2010. On March 8, 2010, Energold announced the strategic acquisition of the assets and drilling operations of Envirodrill Ltd. of the United Kingdom, adding 9 rigs and expanding its operational expertise in Africa. At March 31, 2010, Energold Drilling's rig fleet was over 90 rigs.
The Company's focus is to also expand its underground drilling segment which has been fully contracted out. A prototype surface rig is currently being designed to access depths beyond 1,000 meters and a modification program to increase the capability of the standard EGD Highly Mobile Surface Type II rigs is currently underway.
In 2009, Energold was acknowledged by PROFIT 100 magazine as being one of Canada's fastest growing companies.
Looking forward to the balance of 2010, with new rigs and additional contracts, the Company has strategically positioned itself for future growth in 5 continents. The early stage drilling segment of the industry is the primary focus; however, the Company is more than capable of completing reserve definition and mine site drilling as well.
The Company will be reviewing its 2009 Year-End results via Conference Call at 4:15 pm ET, 1:15 pm PT, Friday April 9, 2010. Dial-in numbers are 1-866-782-8903 or 647-426-1845. Management will be 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 firstname.lastname@example.org. The recorded audio file can be accessed at our website: http://www.energold.com/s/Events.asp
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"
President and Chief Executive Officer
For further information, please contact:
Sunny Pannu -- Investor Relations
Telephone: 604 681-9501
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.
1100 - 543 Granville Street
Vancouver, BC V6C 1X8
Telephone 604 681 9501
Facsimile 604 681 6813
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