TIDMCAPD
RNS Number : 4248Q
Capital Limited
18 October 2023
Capital Limited
("Capital", the "Group" or the "Company")
Q3 2023 Trading Update
Capital (LSE: CAPD), a leading mining services company, today
provides its trading update for the period 1 July to 30 September
2023 (the "Period").
THIRD QUARTER (Q3) 2023 KEY METRICS
Q3 2023 Q3 2022 vs Q2 2023 vs
Q3 2022 Q2 2023
===================================== ========== ========== =========== ========== ==========
Revenue ($m) 79.7 73.1 9.0% 76.5 4.2%
===================================== ========== ========== =========== ========== ==========
Drilling and associated revenue ($m) 51.2 52.3 -2.1% 52.6 -2.7%
------------------------------------- ---------- ---------- ----------- ---------- ----------
Mining revenue ($m) 18.0 13.0 38.5% 14.3 25.9%
===================================== ========== ========== =========== ========== ==========
MSALABS revenue ($m) 10.5 7.7 36.4% 9.6 9.4%
------------------------------------- ---------- ---------- ----------- ---------- ----------
All amounts are in USD unless otherwise stated.
* Unaudited numbers
Financial Highlights
-- Revenue US$79.7 million, a 9.0% increase on Q3 2022 (US$73.1
million) and a 4.2% increase on Q2 2023 (US$76.5 million);
- Drilling and associated revenue for the quarter was $51.2
million, down 2.1% on Q3 2022($52.3 million) and 2.7% on Q2 2023
($52.6 million);
- Mining revenue for the quarter was $18.0 million, up 38.5% on
Q3 2022 ($13.0 million) and 25.9% on Q2 2023 ($14.3 million);
and
- Laboratories (MSALABS) revenue for the quarter was $10.5
million, up 36.4% on Q3 2022 ($7.7 million) and 9.4% on Q2 2023
($9.6 million).
-- Interim dividend of 1.3 cents per share (cps), paid on 3 October 2023, (1.3 cps H1 2022).
Operational Update
-- Safety performance remains world-class with the nine-month
YTD Total Recordable Injury Frequency Rate ("TRIFR") of 1.23 per
1,000,000 hours worked (FY 2022 1.2).
-- Capital Drilling: Continuing geographical expansion:
-- Fleet utilisation for the quarter was 72%, down 6.5% on Q3
2022 and 1.4% on Q2 2023, impacted by seasonal weather conditions
in West Africa as well as softer activity levels in Mali; and
-- Average monthly revenue per operating rig ("ARPOR") was
US$179,000 in Q3 2023, down 1.6% on Q3 2022 ($182,000) and 2.2% on
Q2 2023 (US$183,000) similarly impacted by seasonal weather
conditions.
-- New major multi service drilling contract won:
- Capital has secured a new comprehensive drilling services
contract with Nevada Gold Mines (NGM), USA, extending our drilling
presence into North America. The contract encompasses a wide array
of drilling services including underground reverse circulation and
diamond, both surface and underground. The contract has a term of 3
years and will generate approximately $35 million of revenue per
annum once fully operational from 2025.
-- Other contract wins:
- An extension of the exploration drilling contract with Allied
Gold Corp at its Sadiola project in Mali; and
- An additional grade contract drilling contract with Allied
Gold Corp at its Sadiola project.
-- Ongoing ramp up of material contracts: The two high-quality
contracts at Reko Diq, Pakistan and Ivindo SA, Gabon began to ramp
in the third quarter and will continue towards full operating rates
as we progress through Q4 2023.
-- Meyas Sand Gold Project update:
- Operations at Perseus Mining's Meyas Sand Gold Project had
been temporarily ceased following the escalation of conflict in
Sudan in April 2023. Capital alongside Perseus Mining have been
closely monitoring the situation and are actively engaged in
discussions with the anticipation of resuming operations in
2024.
-- Rig count increased from 125 to 126 through Q3 2023, net of depletion.
Q3 2023 Q3 2022 vs Q2 2023 vs
Q3 2022 Q2 2023
=========================================== ========== ========== ============ ========== ==========
Closing fleet size 126 127 -0.8% 125 0.8%
=========================================== ========== ========== ============ ========== ==========
Average Fleet 125 119 5.0% 124 0.8%
------------------------------------------- ---------- ---------- ------------ ---------- ----------
Fleet utilisation (%) 72 77 -6.5% 73 -1.4%
=========================================== ========== ========== ============ ========== ==========
Average utilised rigs 90 91 -1.1% 90
------------------------------------------- ---------- ---------- ------------ ---------- ----------
ARPOR*($) 179,000 182,000 -1.6% 183,000 -2.2%
=========================================== ========== ========== ============ ========== ==========
Drilling revenue ($m) 48.6 49.8 -2.4% 49.4 -1.6%
------------------------------------------- ---------- ---------- ------------ ---------- ----------
Surveying revenue 0.9 1.1 -18.2% 0.9
=========================================== ========== ========== ============ ========== ==========
Other Associated revenue (1) ($m) 1.8 1.4 28.6% 2.3 -21.7%
------------------------------------------- ---------- ---------- ------------ ---------- ----------
Total Drilling and associated revenue ($m) 51.2 52.3 -2.1% 52.6 -2.7%
------------------------------------------- ---------- ---------- ------------ ---------- ----------
*Average revenue per month per operating rig
*Unaudited numbers
(1) Associated revenue refers to revenue generated from
complementary services tied to our drilling operations.
All amounts are in USD unless otherwise stated
-- Capital Mining: Ramp up of major contract continues
-- Mobilisation at our mining contract with Ivindo SA is
progressing rapidly, with the majority of mining equipment now on
site. The contract has a term of up to 5 years and will generate
approximately $30 million of revenue per annum once fully
operational. The contract involves both earthmoving and crushing
services; and
-- Sukari Gold Mine (Egypt) waste mining contract saw consistent
operations once again through Q3 2023.
-- MSALABS: Building momentum of its multi-year growth strategy:
-- The deployment of Chrysos' PhotonAssay(TM) units remains on
track and continues to advance successfully:
- MSALABS possesses the largest international network of Chrysos
PhotonAssay(TM) technology with ten units currently deployed or
under construction across Africa and Canada; and
- MSALABS relationship with Chrysos remains strong and is making
significant progress towards the deployment of 21 units by
2025.
-- MSALABS continues to make strides with its traditional
geochemical business with the establishment of a mine site fire
assay laboratory at Barrick's Kibali, DRC Phase II project which is
set to become operational imminently.
-- Capital Investments: Allied Gold IPOs during the quarter:
-- The total value of investments (listed and unlisted) was
$47.8 million as at 30 September 2023 ($42.1 million at as 30 June
2023);
-- The portfolio continues to be focused on a select few key
holdings with our holdings in Predictive Discovery, Allied Gold
Corp, WIA Gold and Leo Lithium comprising the majority of our
investments; and
-- Allied Gold Corp listed on the Toronto Stock Exchange during
the quarter with a market capitalisation of C$1.3 billion, Canada's
largest mining IPO since 2010. Capital's holding in Allied Gold was
worth $10 million as at 30th September 2023, at Allied Gold's share
price of C$4.74.
Outlook
-- Revenue guidance for 2023 remains $320 to $340 million;
-- Capital Drilling will see positive momentum into Q4 2023 from
the continued ramp up of operations particularly at Ivindo and Reko
Diq . This momentum will continue further into 2024 as operations
commence with Nevada Gold Mines, USA;
-- Capital Mining is focusing on finalising the mobilisation of
equipment at our mining contract at Ivindo, Gabon. In addition, the
Sukari earth moving contract is expected to perform at steady state
through the remainder of the year;
-- MSALABS is continuing its multi-year laboratory expansion,
with a strong emphasis on the deployment of Chrysos PhotonAssay(TM)
units. Client assay trials continue to grow the reputation of
Chrysos PhotonAssay technology and we remain very confident on the
continued rollout of 21 units over the next 12 months; and
-- Tendering activity remains robust across the Group with a
number of opportunities progressing.
Commenting on the trading update, Peter Stokes, Chief Executive,
said:
"The Group recorded an increase in revenue during the quarter,
despite the typical seasonal impacts, underscoring the high quality
and diverse nature of our services. This growth was bolstered by
the ramp-up in our high-quality contracts at Reko Diq, Pakistan,
and Ivindo, Gabon, across drilling and mining as well as the
continued laboratory rollout in MSALABS.
Furthermore, we are thrilled to continue expand our services
with Barrick at the Nevada Gold Mines complex. This contract
represents a significant milestone for our Group extending our
geographic reach in drilling into North America, adding to our
growing presence in the Americas with MSALABS and building a strong
platform for additional growth as we look towards 2024 and
beyond."
- ENDS -
For further information, please visit Capital's website
www.capdrill.com or contact:
Capital Limited investor@capdrill.com
Peter Stokes, Chief Executive Officer
Rick Robson, Chief Financial Officer
Conor Rowley, Corporate Development & Investor Relations
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Stifel Nicolaus Europe Limited +44 20 7710 7600
Ashton Clanfield
Callum Stewart
Rory Blundell
Buchanan +44 20 7466 5000
Bobby Morse capital@buchanan.uk.com
George Pope
About Capital Limited
Capital Limited is a leading mining services company providing a
complete range of drilling, mining, maintenance and geochemical
laboratory solutions to customers within the global minerals
industry. The Company's services include: exploration, delineation
and production drilling; load and haul services; maintenance; and
geochemical analysis. The Group's corporate headquarters are in the
United Kingdom and it has established operations in Côte d'Ivoire,
Canada, Democratic Republic of Congo, Egypt, Gabon, Ghana,Guinea,
Kenya, Mali, Mauritania, Nigeria, Pakistan, Saudi Arabia and
Tanzania.
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END
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