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News Releases

 April 26, 2019
Energold Drilling Corp Announces Q4 2018 and Fiscal 2018 Results


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Energold Drilling Corp. (EGD: TSX.V) (“Energold” or “The Company” or “Energold Group”) is pleased to announce its annual results for the year ended December 31, 2018 with a four-year high revenue of $84.1 million across all business divisions, representing an increase of 12% on a year over year basis compared to 2017’s $75.0 million revenue. This continued revenue rebound can be attributed to a successful diversification and turnaround strategy the group has put in place since 2012 to mitigate the effects of a prolonged downturn in the mineral sector. In 2018, over 50% of revenues for Energold came from non-mining activities.

Positive EBITDA (earnings before interest, tax, depreciation & amortization) was achieved for the first three quarters of 2018, the first positive earnings since 2012. Q4 2018 was a challenging quarter due to lack of junior mining capital, seasonal delays, combined with work start costs in the oil sands which culminated in a yearly EBITDA loss of $2.9 million. This is a significant improvement from EBITDA loss of $5.6 million in 2017 and a testament to improving commodities outlook, better margins, and the growing diversified segments of renewables and geothermal.

Despite a lukewarm recovery in mineral exploration, Energold’s diversified sectors are growing.

In 2018, gross margin for the group was 17% compared to 14% in 2017 demonstrating a continued push for operational efficiency and resulting in better margins. Net loss for 2018 totaled $14.6 million compared to a loss of $17.6 million in 2017 and operation losses narrowed by 51% to $6.9 million in 2018 from $14.1 million in 2017. Looking forward, Energold believes 2019 will be conducive for higher EBITDA and earnings.

At the end of December 31, 2018, the Company had cash of $5.0 million, trade and receivables of $13.5 million, and net working capital of $32.4 million. The working capital decrease was affected by the reclassification of $10.8 million in inventory from current assets to long term assets and bank indebtedness of $2.5 million becoming current in 2018.

Fred Davidson, CEO and President of Energold, commented as follows: “2018 signified a continual turnaround in the Energold story with the group achieving the first positive EBITDA in over six years and narrowing losses significantly for the full year. This strategically positions the group to continue to work towards achieving breakeven and net income in 2019 as our diversified business segments continue to demonstrate growth against a backdrop of tepid mineral exploration markets.”

Quarter-to-date and year-to-date results comparison

  For three months ended Dec 31 For the year ended Dec 31
CAD$ (000s) 2018 2017 2018 2017
Mineral 6,512 10,948 39,275 45,294
Energy and infrastructure 7,164 5,056 35,034 22,681
Manufacturing 844 2,279 9,770 7,004
Total Revenue $14,520 $18,283 $84,079 $74,979
Gross profit
Gross Margin %
Operating loss (3,337) (5,383) (6,888) (14,073)
Net loss (7,370) (5,918) (14,602) (17,598)
Amortization 633 2,125 6,013 8,384
Finance Cost 1,049 922 4,265 3,330
Current and deferred income tax expense (recovery) 456 (29) 1,453 266
EBITDA $(5,232) $(2,900) $(2,871) $(5,618)


In 2018, mineral revenues decreased to $39.3 million in 2018 from $45.3 million in 2017. Not surprisingly, S&P Global Intelligence quoted grassroots explorations budget at record decade lows at below 30% of global expenditures of $9 billion which is barely above 2009 budgets.

This decrease in revenue for mineral drilling is impacted by the downturn of previous years and inability for most juniors and developers to access new capital. While there are positive signs in the industry and an improvement in exploration spending worldwide primarily in the development phase of mining, most of the early stage exploration juniors market remains relatively challenged.

The Company believes with the start of the mergers and acquisitions in the sector now underway, more efforts will be placed to upgrade reserves, replace reserves, or discover new projects in coming years which should benefit the mining division.

At December 31, 2018 the Company had 139 rigs in its mineral drilling fleet, many of which the Company has developed conversion kits to address evolving client needs beyond portable frontier drilling to reverse circulation, underground drilling, and even open-hole drilling.

Meters Drilled During the Quarter

  Q4-2018 Q3-2018 Q2-2018 Q1-2018 Q4-2017
Meters Drilled 42,400 56,400 83,100 72,400 66,300


Diversified energy and infrastructure work this year brought in over $35.0 million compared to $22.7 million in 2017 which is a 54% increase. Continued strength, improving prices and the supply situation is buoyant for oil prices, resulting in strong oil sands and seismic activity of $11.0 million in 2018 compared to $9.6 million in 2017.

Energold’s horizontal directional drilling (“HDD”) division generated $6.9 million in revenue in 2018, nearly doubling year over year compared to $3.6 million in 2017. The HDD division captured the growing demand for technology, infrastructure connectedness, and telecommunication retrofit work around cities in North America, and there are additional markets in developing nations as well.

Meters drilled:

  For the three months ended Dec 31 For the year ended Dec 31
  2018 2017 2018 2017
Infrastructure 15,100 11,500 58,700 43,700
Oil sands 6,700 7,000 29,200 19,900
Sustainable drilling 23,200 23,600 240,900 118,300
  45,000 42,100 328,800 181,900


Dando, Energold’s manufacturing division’s core business, remains challenging given the global slowdown in mining activities and thus mining related equipment. To combat operation losses, corporate restructuring for potential divestiture commenced in 2017 aiming at reducing fixed costs and streamlining production and product portfolio.

The manufacturing division demonstrated strong turnaround with new management, generating $9.8 million in revenue, a 40% increase from 2017’s $7.0 million.

The turnaround process has seen early success with Dando achieving profitability for the first time in years early in 2018. In March 2019, Energold entered into a binding heads of agreement (“HoA)” with a private UK company to acquire Dando. The new owners will fund Dando for up to an additional GBP 1,000,000 and own 51%, purchasing the remaining 49% for GBP 3.1 million (approximately $5.35 million CAD) over a ten-year period. Additional information is available on the news release dated March 7, 2019.


The mining industry has seen several years of under expenditures resulting in a hollowing out of the mid-tier development projects feeding the need of grade and ore replacement trend for majors. As evident through recent mergers and acquisitions on the largest scale, the rush to explore and generate greenfield projects could soon increase which should benefit service companies such as Energold.

In the Canadian oil and gas sector, we have also seen a dramatic reversal of the collapse of the WCS price resulting from Alberta mandating production cuts which coupled with the resurgence of world oil prices is strongly positive for the sector. The Canadian oil sands is the third largest source of world oil reserves and account for more than two-thirds of Canadian exports with increases forecasted out to 2035 according to CAPP. This entails considerable future drilling and well service programs.

The green and infrastructure drilling space continues to grow with significant data network upgrades throughout developed cities, energy efficiency upgrades, and public capital allocated to larger projects such as fiber optics network and high-speed network upgrades for $4.7 billion in BC through to 2020.

A conference call to review financials is planned for Monday, April 29, 2019 at 4:00 p.m. Eastern Time. Dial-in numbers are 647-689-4231 or 1-833-297-9922. All our earnings calls are also archived online at www.energold.com under the Investors tab and Earnings Calls Archive page.


Energold Drilling Corp. is a leading global specialty drilling company that services the mining, energy, infrastructure, geothermal, water and manufacturing sectors in 24 countries. Specializing in a socially and environmentally sensitive approach to drilling, Energold provides a comprehensive range of drilling services from early stage exploration to onsite operations as well as manufacturing.

On behalf of the Directors of Energold Drilling Corp.,

Frederick W. Davidson”
President, CEO

Jerry Huang -- Chief Financial Officer (604) 681-9501 or via email at

1100 - 543 Granville St.
Vancouver, BC V6C 1X8
Telephone 604 681 9501
Facsimile 604 681 6813

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.

Cautionary Note Regarding Forward-Looking Statements:

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, a reduction in the demand for the Company's drilling services, the price of commodities, changing foreign exchange rates, actions by government authorities, the failure to find economically viable acquisition targets, 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.


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