|November 29, 2010|
Energold Announces Profitable Third Quarter, Revenues Up 155%
|Energold Drilling Corp. (EGD: TSX.V) ("Energold" or "the Company") is pleased to announce continued increased demand for contract drilling services resulting in a profitable third quarter of $0.8 million in net earnings, which includes a foreign exchange loss of $379,000 for the period, as compared to a $1.6 million net loss in the same period of 2009. Revenues in the third quarter were $16.4 million, up 155% from $6.4 million in the same period of 2009. |
The Company drilled a new company record of 102,500 meters in the third quarter, up 136% from 43,500 meters drilled in the same period of 2009, and up 19% from the prior quarter (see Energold news release dated November 3, 2010). The previous record number of meters drilled in any quarter was 86,000 meters drilled during the second quarter of 2010. Furthermore, over 242,900 meters were drilled in the nine months ended September 30, 2010, up 140% from the comparable period of 2009, demonstrating continued strong demand for exploration drilling.
The Company remains in excellent financial position with a working capital of $46.8 million and cash and cash equivalents of $9.3 million and no long-term debt. The Company's balance sheet strength also does not reflect the market value of its equity investment in IMPACT Silver Corp. (IPT: TSX-V). The Company's 13.56% interest in IMPACT Silver Corp. is accounted for on an equity basis. Based on closing market prices at September 30, 2010, the investment has a quoted market value of $7.4 million, amounting to $3.5 million more than our carrying value.
Third Quarter Results Comparison
(CAD 000s except per-share amounts and meters drilled)
During the quarter, the Company continued to experience a shift towards more traditional levels of drilling demand. Average revenue per meter increased to $160 in the third quarter of 2010 as compared to $147 in the third quarter of 2009, in spite of a five-year weaker U.S. dollar. Gross margins for the third quarter increased to 24.7% from 21.4% in the third quarter 2009, reflecting the gradual addition of more frontier drilling programs, which command higher rates and is expected to grow significantly into 2011.
The Company continued its initiative to invest in current and emerging markets and is seeing renewed interest in both segments in West Africa and South America, including Brazil and Colombia. The Company also expanded its investment in rig infrastructure and at September 30, 2010, the Company had reached its target of 100 rigs, which included delivery of five new surface drilling rigs in the first two quarters with an additional five new surface rigs and one new underground rig in the third quarter. Some of the rigs were outfitted with new inventories and in some cases, upgraded. Two prototype surface rigs are being designed to access depths beyond 1,000 meters and a modification to increase the capability of the standard EGD Highly Mobile Surface Type II rigs is currently underway.
Despite the difficult environment experienced last year, the third quarter of 2010 has shown the continued positive trend as drilling demand is increasing on a quarterly basis. Energold's strategic goal is to continue to enhance cash reserves to fuel further growth. Energold's primary focus continues to be on organic growth through new rig development, expansion into new markets and a focus on strategic acquisition targets.
The Company will be reviewing its third quarter 2010 results via conference call at 12:00 pm ET, 9:00 am PT, Tuesday, November 30th. The 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 conference call can be accessed at our website on November 30, 2010:
Energold Drilling Corp. is an environmentally and socially-sensitive diamond drilling company that services the international 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:
Sunny Pannu - Investor Relations
(604) 681 9501 or via email at email@example.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to proposed activities, work programs and future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the effects of general economic conditions, the price of commodities, changing foreign exchange rates, actions by government authorities, title matters, environmental matters, reliance on key personnel, the ability for operational and other reasons to complete proposed activities and work programs, the need for additional financing and the timing and amount of expenditures. Energold Drilling Corp. does not assume the obligation to update any forward-looking statement.
1100 - 543 Granville St.
Vancouver, BC V6C 1X8
Telephone 604 681 9501
Facsimile 604 681 6813
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