Capital records solid second-quarter progress

19th July 2023 By: Tasneem Bulbulia - Senior Contributing Editor Online

London-listed Capital recorded another strong step forward in the quarter, with the award of its second significant mining services contract at the Ivindo iron-ore project in Gabon, CE Peter Stokes says in a trading update for the period April 1 to June 30.

“This not only continues our strategy to diversify revenues but alongside further growth in our drilling business and the impressive growth trajectory of MSALABS, [it] decouples the group’s growth trajectory from prevailing commodity prices,” he outlines

Stokes says the second quarter featured some temporary operational interruptions, specifically at the Meyas Sand gold project in Sudan. Following the resolution of these, the group expects a strong second half and remains confident in its revenue guidance of $320-million to $340-million.

“This will be driven across all business divisions, with the Ivindo iron-ore mining contract commencing in the third quarter, the world-class drilling contracts at Ivindo iron-ore and Barrick’s Reko Diq project in Pakistan announced earlier in the year ramping up through quarter three 2023, and also MSALABS continuing to build its global network of laboratories,” Stokes highlights.


Revenue for the period was $76.5-million, a 7.4% increase on the previous year and a 1.7% decrease on the previous quarter.

The business is said to be geared for a strong second half driven by the ramp-up of three high-quality contracts, namely drilling at the Ivindo project and the Reko Diq copper/gold project, and Capital’s recently announced mining services and crushing contract at Ivindo.

There was the temporary shutdown of operations at Perseus Mining’s Meyas Sand project.

Following the escalation of conflict in Sudan in April, Capital, alongside Perseus, made the decision to temporarily cease operations at the Meyas Sand gold project.

Following monitoring, it is now in discussions with Perseus to return to operations in the second half of the year.

Non-drilling revenue contributed 36% of total revenue in the period with consistent Mining Services operations and MSALABS continuing along its growth path.

In the quarter, Capital paid the final dividend of $2.6c apiece declared at the full year 2022 results for the 2022 financial year.


Capital achieved a first-half total recordable injury frequency rate of 1.03 per one-million hours worked.

Fleet use was 73%, compared with 85% the previous year and 77% in the first quarter, the decrease in part driven by the temporary shutdown of rigs in Sudan.

Average monthly revenue per operating rig was said to have remained strong at $183 000, a 7% increase on the previous year and a 4.7% decrease on the first quarter.

Capital achieved a new contract win, a reverse circulation exploration drilling contract with Centamin, at the Nugrus Block in the Egyptian Eastern Desert.

The rig count increased from 123 to 125 through the period, net of depletion.

Capital Mining also saw a second material contract win.

A new major earthmoving and crushing services contract – Capital has secured its second high-quality mining services contract with Ivindo Iron.

This site is located in the northeast of Gabon, one of the world’s largest undeveloped, high-grade hematite iron deposits with the potential to become a globally significant iron-ore mine, the group highlights.

This contract has a term of up to five years and will generate about $30-million of revenue yearly once fully operational.

A waste mining contract at the Sukari gold mine in Egypt saw consistent operations once again through the period.

MSALABS is continuing to deliver on its multi-year growth trajectory. Its Chrysos’ PhotonAssay unit rollout is progressing well as MSALABS now has the largest international network of Chrysos PhotonAssay technology.

MSALABS now has ten units deployed or under construction across Africa and Canada.

In accordance with Capital’s sustainability goals, the laboratory in Kankan in Guinea is set to be solar powered through Mine Power Solutions, Capital’s 50:50 joint venture with Enerwhere that focuses on providing solar hybrid power solutions.

The expanded relationship with Chrysos will see MSALABS deploy 21 units by 2025.

MSALABS also continued the rollout of its traditional geochemical business in the quarter, with a fire assay laboratory currently under construction in Marsa Alam, Egypt.

MSALABS has completed a $10-million equity raise to fund the expansion of the business. Following this Capital’s shareholding in MSALABS has increased from 77.76% to 81.79%.


Revenue guidance for the full-year remains at $320-million to $340-million.

Capital Drilling is expected to see growth in revenues in the second half of the year driven by the addition of two high-quality long-term contracts at Reqo Diq, Pakistan and Ivindo, Gabon set to ramp up through the next quarter.

Capital Mining will also see an improvement in revenues in the second half with the mining contract at Ivindo, Gabon set to being in the next quarter, with mobilisation to site having already begin in the second quarter.

In addition, the Sukari earthmoving contract is expected to perform at steady state through the remainder of the year.

MSALABS will continue its multi-year laboratory roll-out, particularly focused on Chrysos PhotonAssay units, with guidance for MSALABS remaining $40-million to $50-million for 2023.

Tendering activity remains robust across the group with a number of opportunities progressing, Capital says.