Trading Symbol: "EGD: TSX.V"

VANCOUVER, April 17, 2018 /CNW/ - Energold Drilling Corp. ("Energold" or "the Company") announces annual revenue in 2017 of $75.0 million across all business divisions, compared to 2016 revenue of $65.4 million, representing an increase of 14.6% on a year over year basis. Improving fundamentals including recovering commodity prices led to the improvement in revenue and activity in the Company's core mineral and oil & gas drilling markets. Mineral drilling revenue rose 22.2% in 2017 compared to 2016 while revenue in the oil and gas drilling business increased by 24.4% compared to 2016.

There were substantial improvements in certain regions during the year and market improvements in general strengthened considerably throughout 2017 that carried over into early 2018. The Company's geographic and market diversification efforts continue to pay off in the green and infrastructure drilling markets.

In 2017, the Company's overall gross margin was 14.4% compared to 14.1% in 2016. Continued overhead cost containment and increases in activity levels were partially offset with start-up costs and increased usage of working capital to begin new programs, namely in the mineral, green and infrastructure drilling markets. The net loss in 2017 was $17.6 million or ($0.32) per share compared to an adjusted net loss of $18.6 million or ($0.36) per share in 2016. At the end of 2017, Energold's balance sheet had $7.7 million in cash and $51.5 million in working capital.

 

MINERAL DRILLING DIVISION

Revenues increased to $45.3 million in 2017 from $37.1 million in 2016 as a result of a 27% increase in meters drilled. Average revenue per meter in 2017 was $154 compared to $159 in 2016. Although the market is recovering, there was still some excess rig capacity in the industry in 2017 that impacted pricing. As capacity utilization rises, pricing and margins are expected to expand, coupled with continued focus on low operating costs and increased productivity. The margin for the year ended December 31, 2017 was $5.7 million or 13%, compared to $4.9 million or 13% in the comparable period in 2016.

 

ENERGY DRILLING DIVISION (Oil & Gas, Green Energy, Geotechnical, Water)

Revenues for the year ended December 31, 2017 were $22.7 million compared to $18.2 million in 2016. Although activity levels are still lower than what the Company has experienced in previous years, Q1-2017 was more active in the oil sands compared to Q1-2016. Gross margin improved to $4.6 million or 20% in 2017 compared to $3.3 million or 18% in 2016.

EBITDA for the energy division was positive for 2017. In 2017, Bertram drilled 33,400 meters in Canada and 104,800 in the U.S. compared to 18,000 meters in Canada and approximately 112,700 in the U.S. in 2016. Cros-Man, which does infrastructure drilling in Central Canada, drilled 43,500 meters in 2017 compared to 30,500 in 2016 (from March 4, 2016 acquisition). Subsequent to December 31, 2017, the Company was awarded more than $10 million in new green drilling contracts in the United States and $9 million in infrastructure drilling contracts in Canada.

 

MANUFACTURING

Revenues for Dando for the year ended December 31, 2017 were $7.0 million with a gross margin of 6% compared to revenues of $10.1 million with a gross margin of 11% in 2016. In 2017, a complete restructuring of the manufacturing division was undertaken to improve profitability while offering a more focused suite of products. The restructuring process was completed in the second half of 2017 and the Company has had several meaningful improvements in the production and financial areas of the division in early 2018.

INDUSTRY OUTLOOK

The recovery taking hold in the Company's key divisions in 2017 has continued in 2018. Mineral drilling is expected to remain stronger than in past years through the balance of the year in the Company's strongest geographical regions, namely Central and South America, as well as in West Africa. In the energy drilling division, stronger activity is expected to persist in 2018 as spending ramped up considerably in the most recent winter drilling season. Management has deployed energy drilling equipment in non-winter seasons when equipment typically sits idle, which has led to new contracts in the green energy and infrastructure drilling sectors. Public spending in North America on improving infrastructure and developing the green economy has provided the Company with significant opportunities to win new business as a diversification to strictly commodity-based drilling activities.

A conference call is planned for April 18, 2018 at 10:00am Eastern time. Dial-in numbers are (647) 689-4231 or (833) 297-9922.

Energold Drilling Corp. is a leading global specialty drilling company that services the mining, energy, water, infrastructure and manufacturing sectors in approximately 25 countries. Specializing in a socially and environmentally sensitive approach to drilling, Energold provides a comprehensive range of drilling services from early stage exploration to mine site operations for all commodity sectors and has an established drill rig manufacturer, Dando Drilling International, based in the United Kingdom. Energold also holds 6.98 million shares of IMPACT Silver Corp., a silver producer in Mexico.

On behalf of the Directors of Energold Drilling Corp.,

"Frederick W. Davidson"
President, CEO

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, 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.

SOURCE Energold Drilling Group

View original content: http://www.newswire.ca/en/releases/archive/April2018/17/c1300.html