🕐29.08.11 - 19:27 Uhr
ENERGOLD ANNOUNCES NET EARNINGS, SIGNIFICANT GROWTH, AND RECORD REVENUE IN SECOND QUARTER 2011
=======================================================================
Re: News Release - Monday, August 29, 2011
Energold Announces Net Earnings, Significant Growth, and Record
Revenue in Second Quarter 2011
=======================================================================
Energold Drilling Corp.
(EGD: TSX.V) ("Energold" or "the Company") is
pleased to announce continued growth and another profitable quarter
reflected by strong demand for contract drilling services resulting in
record revenues of $28.4 million, up 120% from $12.9 million in the
comparable period in 2010 and up 25% from the first quarter of 2011.
The Company recorded $3.7 million in consolidated net earnings at $0.09
EPS (earnings-per-share), as compared to $1.0 million net earnings at
$0.03 EPS in the same period of 2010.
Energold earned $0.14 EPS for
the six months ended June 30, 2011, as compared to $0.01 EPS net loss
in the same period in 2010.
The Company drilled 155,300 meters for the quarter, outpacing the
previous Company record number of meters drilled of 125,800 meters
recorded in the first quarter of 2011.
The Company drilled a new
record of 281,100 meters in the first half of 2011, up 100% from
140,300 meters drilled in the same period of 2010 (see Energold news
release dated August 3, 2011).
The Company remains in excellent financial position with a working
capital position of $66.1 million and cash and cash equivalents of
$16.8 million and no long-term debt.
The Companys balance sheet
strength also does not reflect the market value of its equity
investment in IMPACT Silver Corp.
(IPT: TSX-V).
The Companys 10.27%
interest in IMPACT Silver Corp.
is accounted for on an equity basis.
Based on closing market prices at August 22, 2011, the investment has a
quoted market value of $15.4 million, amounting to $8.83 million more
than our carrying value.
Second Quarter Results Comparison
(CAD 000s except per-share amounts and meters drilled)
(View this table on our website:
http://www.energold.com/s/NewsReleases.asp?ReportID=475776 )
The Company completed its ninth quarter of consecutive growth in meters
drilled resulting in positive growth in revenues and consolidated net
earnings.
A substantial portion of the drilling continues to be the
more competitively bid "brownfields" exploration, typically mine sites
or near mine site drilling; however, as new rigs are built an
increasing portion of the drilling mix over the last few quarters has
been shifting towards frontier drilling in areas such as West Africa
and South America.
Average revenue per-meter increased to $169 in the second quarter of
2011 as compared to $149 in the second quarter of 2010 and decreased
marginally from $170 in the first quarter 2011 due to the Canadian
dollar strengthening against the U.S.
dollar, as compared to the second
quarter of 2010 which dampened the effect of higher U.S.
dollar rates
on revenues.
Gross margins from drilling remained strong at 27.9% in
the second quarter, compared to 23.8% in the comparative quarter in
2010 and 28.6% in the prior quarter.
The higher revenues per meter and
gross margins reflect the steady addition of more frontier drilling
programs into the overall mix.
This trend is expected to accelerate
during the second half of 2011 and into 2012.
Energolds manufacturing
arm, Dando Drilling International Ltd., recorded $2.4 million in sales,
but as forecasted, experienced a loss of $300,000.
It is expected that
once existing contracts are completed, the orders for new equipment
will increase margins in subsequent quarters, reflecting a stronger
contribution from this sector.
Six Months Ended June 30, 2011 Results Comparison
(CAD 000s except per-share amounts and meters drilled)
(View this table on our website:
http://www.energold.com/s/NewsReleases.asp?ReportID=475776 )
Mexico and Central America remain as the strongest market for the
Company with 42 rigs located in the region and contributed
approximately half of the total meters drilled with further rig
expansion.
Brazil, Peru and specifically Argentina showed significant
growth in the South America operations.
Over 30 rigs are located in
the Africa operations with planned rig additions throughout 2011.
At June 30, 2011, the Company had 115 drilling rigs with an additional
3 more rigs under construction in response to continued demand for
highly mobile drilling rigs and increased exploration expenditures in
frontier drilling.
The fleet includes 87 EGD Highly Mobile Surface
Rigs, 7 Underground Rigs as well as a number of conventional rigs.
Further investment into research and development has resulted in
retrofitting a number of the rigs to enhance their performance and the
field testing of new prototypes designed to expand the potential of its
highly mobile fleet and the value of the Companys service offering to
its clients.
Subsequent to the end of the quarter, the Company acquired 100% of
Bertram International Corp.
("Bertram") a diversified specialty
drilling company servicing the energy sector in Canada and U.S.
(see
Energold news release dated July 25, 2011).
Bertram has a fleet of 119
rigs specially designed for oil sands coring, shot hole seismic and
geothermal drilling services markets.
Bertram also provides diamond
and pipeline drilling services.
The Bertram acquisition provides
Energold a unique opportunity to acquire, on an accretive basis, a
proven leader of specialty drilling services in a niche, high growth
area of the energy sector.
This will diversify Energolds revenue
sources and dramatically scale up operations of the Energold Group in
pursuit of its overall strategic goal to become a leading international
specialty drilling services company delivering above average returns in
comparison to its peer group.
On July 25 2011, the Company also completed a $10.0 million secured
convertible debenture (CD) issue (see Energold news release dated July
21, 2011).
The net proceeds of the CD will be used to provide interim
funding of Energolds ongoing business operations, in particular for
the funding of acquisitions and capital commitments.
The second quarter of 2011 further demonstrates the continued strong
positive trend of growing drilling demand across our markets.
Energolds strategic goal is to continue to utilize our cash reserves
to capitalize on the favourable market conditions and build the
foundation to fuel further growth.
Energolds 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 Second Quarter 2011 results via
Conference Call at 11:30 am ET, 8:30 am PT, Tuesday, August 30th.
The
dial-in numbers are 1-866-782-8903 or 647-426-1845.
Management will be
discussing the Companys financial and operational results ending with
a question-and-answer period.
Investors are encouraged to forward any
questions they may have to .
The recorded conference
call can be accessed at our website on August 30th 2011:
http://www.energold.com/s/Events.asp
Energold Drilling Corp.
is an environmentally- and socially-sensitive
diamond drilling company that services the international mining
industry.
Energold holds 6.91 million shares of IMPACT Silver Corp.
On behalf of the Directors of Energold Drilling Corp.
"Frederick W.
Davidson"
President, CEO
For further information, please contact:
Sunny Pannu -- Investor Relations
(604) 681 9501 or via email at
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.
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, 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.
IMPACT does not assume the obligation to update any
forward-looking statement.
1100 - 543 Granville St.
Vancouver, BC V6C 1X8
www.energold.com
Facsimile 604 681 6813
Telephone 604 681 9501
=======================================================================
Copyright (c) 2011 ENERGOLD DRILLING CORP.
(EGD) All rights reserved.
For more information visit our website at http://www.energold.com/ or
send mailto:
=======================================================================
To Unsubscribe from this email list, please click on the link below:
http://www.energold.com/s/Unsubscribe.asp?
=======================================================================
This email was sent to
=======================================================================