London-listed Capital Drilling on Tuesday reported that it had achieved continued solid operational profitability, driven by consistent revenue from long-term contracts and ongoing prudent cost management, during the third quarter ended September 30.
The company's revenue rose by 6.1% quarter-on-quarter to $29.4-million, but its average revenue per operating rig decreased by 4.4% quarter-on-quarter to $174 000, mainly as a result of a reduction in drilling activities at Barrick Gold's North Mara mine, in Tanzania, as a result of the suspension of the use of the tailings facility at the mine.
This has, however, been resolved and activity at North Mara has increased so far in the fourth quarter.
"In the first nine months of 2019, Capital Drilling has positioned itself for further growth, which is now bearing fruit with strong exploration contracting and mobilisation activity and, as recently announced, broadening our service offering with the award of our first comprehensive mining services contract with Allied Gold Corp at their Bonikro gold project.
"Our West African growth strategy continues to pay dividends, with a record number of contracts commencing in the fourth quarter.
"During the quarter, we have invested to support the new contracts, and we are confident that Capital Drilling is building a stronger, broader revenue base as a result. With increasing activity levels already seen in the fourth quarter, underpinned by high-quality, long-term contracts, we are optimistic of a solid performance for the remainder of the year as well as into 2020," commented chairperson Jamie Boynton.
Capital Drilling continued to expand its presence in West Africa, with the number of rigs in operation having increased to 35, from 33 in the second quarter. Further rigs will start operating at other mining operations during the fourth quarter as new contracts get under way.
The company expects high activity levels to continue in the fourth quarter, adding that recent strength in the gold price was providing a "highly encouraging" outlook.
"Mine site tendering for drilling has increased, a positive signal for future growth," it stated.
Capital Drilling expects to achieved its targeted revenue of $110-million to $120-million for this year.