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Drilling company to touch base with African clients at expo

23rd January 2015

By: Pimani Baloyi

Creamer Media Writer

  

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Global drilling solutions provider Energold Drilling Corp says it will use the 2015 Investing in African Mining Indaba, which will take place at the Cape Town International Convention Centre from February 9 to 12, to get to know existing and potential clients better and get a sense of the state of the mining industry in Africa.

Energold Drilling president and CEO Frederick Davidson tells Mining Weekly that, in the past three years, during which the mining industry experienced a slowdown in growth, the company focused on strengthening its marketing strategy and relationships with clients.

“The indaba presents a platform where one gets a complete overview of the state of the mining sector, with exposure to government officials, the financial community, contractors for various services to mining, and the miners. To have all these resources together at one show is a tremendous time saver for any mining stakeholder,” he explains.

Davidson adds that Energold Drilling has booked appointments with many clients. The company works extensively in Africa, with a client base across 14 countries, including Liberia, Ghana, Côte d’Ivoire, Gabon and Sierra Leone.

Energold’s client base is mostly in the Americas, Africa and Asia, where it operates on more than 266 rigs in 25 countries worldwide. Its services cover the early stages of exploration and mine-site operations.

He states that, at the event, the company will provide corporate presentations, in addition to an exhibition. “We have always benefited from . . . potential new business leads and catching up with existing clients while at the indaba. We place the indaba on our to-do list every year.”

Diversifying Services
Davidson explains that, to survive the downturn over the last four years, Energold has diversified its services to cater for the energy, water and geotechnical industries. Beyond just providing drilling services, Energold also designs and now sells rigs from its facility in Europe.

“Given the seasonality and cyclical nature of mining, we also decided to use resources sparingly and strategically when markets were good, so that when markets were slow, we would be able to weather the storm,” he adds.

Davidson expects discussions at the indaba to be dominated by ways of ensuring how companies can survive the downturn. He also expects discussions on the price of precious metals to take centre stage at the indaba.

“With tax revenues down and unemployment high in frontier mining countries, another concerning trend is resource nationalism, and the risk of countries attempting to increase ownership of projects after companies have invested millions in them,” Davidson states.

Latest Developments
Energold Drilling released its 2014 third-quarter (Q3) results in November. The company recorded revenue of $20.2-million across its three business divisions, which is a 21.9% increase from the $16.6-million recorded over the same period in 2013.

Energold Drilling’s combined gross margin increased to 9.7% during Q3 of 2014, compared with 4.5% in Q3 of 2013. The adjusted net loss in Q3 of 2014 was $4.8-million, compared with $6.8-million in 2013.

“Despite a continued challenging environment across most commodity markets, the company’s improved results reflect management’s strategy to focus on key markets, while selectively opening new ones to grow the business amid ongoing industry headwinds,” the company said in a statement released after the Q3 report.

Energold Drilling ended Q3 in good territory, with a strong balance sheet, including cash equivalents of $14.5-million and working capital of $81.2-million.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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