Capital delivers new quarterly revenue record of $61.6 million

Capital Ltd (LON:CAPD), a leading mining services company focused on the African markets, has provided its Q3 2021 trading update for the period to 30 September 2021.

THIRD QUARTER (Q3) 2021 KEY METRICS

 Q3 2021Q3 2020Q2 2021% change from Q3 2020% change fromQ2 2021
Revenue (US$m)61.635.354.774.5%12.6%
ARPOR*(US$)182,000171,000180,0006.4%1.1%
Average utilised rigs81608135.0%0.0%
Fleet Utilisation (%)7661                 7924.6%-3.8%
Average Fleet10798               1039.2%3.9%
Closing fleet size1089810610.2%1.9%

* Average monthly revenue per operating rig

Financial Highlights

·        Revenue of $61.6 million represents a new quarterly revenue record for the Group, up 12.6% on Q2 2021 ($54.7 million) and 74.5% up on Q3 2020 ($35.3 million);

·        Mine-site services continue to underpin revenue streams, contributing 90% of Group revenue;

·        Non-drilling revenue contribution of 26% to total revenue, up from 17% in Q2 and 12% in Q3 2020, driven by mining services and MSALABS;

·        Average monthly revenue per operating rig (“ARPOR”) up marginally (1.1%) on Q2 2021 at US$182,000, but up 6.4% on Q3 2020 (US$171,000);  

·        Interim dividend of 1.2 cents per share (cps), paid on 1 October, up 33.3% on 2020 interim dividend (0.9 cps);

·        Increasing 2021 Revenue Guidance: After a strong first three quarters of 2021 with better than anticipated drilling utilisation rates, and Sukari mining operations delivering ahead of contract targets, the Group is increasing guidance on anticipated revenues for 2021 to $220-225 million (up from $200-210 million guided at our Q2 2021 trading update and up from $185-195 million originally guided at the FY20 results).  

Operational Update

·        Fleet utilisation slightly reduced through the quarter to 76%, a decrease of 3.8% on Q2 2021 (79%) but an increase of 24.6% on Q3 2020 (61%). This was due to seasonal weather impacts, particularly in West Africa, and some short term rig movements. Despite lower utilisation, the number of active rigs remained constant with the Group’s total rig count increasing to 108 rigs at the end of Q3 2021;

·        Safety performance remains world class with the Group maintaining the eight LTI free milestones achieved since January 2021, six being in excess of three years;

·        Commenced exploration drilling for Allied Gold Corp, Egypt (contract previously announced); 

·        New contract wins include:

–       An exploration contract with Thani Dubai Mining at its Anbat project in Egypt, due to commence in Q4;

–       Exploration contract with Golden Rim Resources at its Kada project in Guinea, due to commence in October; and

–       A two-year maintenance contract with Kinross at its Tasiast Gold Mine in Mauritania, due to commence in Q4. The contract expands our services on site, adding to the existing drilling and laboratory services contracts.

·        Transformational Sukari Gold Mine (Egypt) waste mining and expanded drilling contracts performing ahead of contract targets:

–        Operations hit target run rates of above 1Mbcm per month in August, three months ahead of contracted commitments;

–        Full fleet of heavy mining equipment, ancillary equipment and drilling fleet operational; and

–        Workforce recruitment is now complete.

·        MSALABS is advancing the installation of Chrysos’s PhotonAssay units:

–        The initial unit at the Bulyanhulu (Tanzania) laboratory has now been commissioned and is expected to commence operations in October;

–        Val d’Or (Canada) is expected to arrive in December, expanding our presence in the country and facilitating our entry into the prolific Abitibi Belt;

–        Morila Gold Mine in Mali (80% owned by Firefinch ASX:FFX) expected to arrive in Q4, to service a five-year contract with Societe Des Mines De Morila SA, subject to final terms and conditions;

·      MSALABS commissioning of Thor Explorations mine site laboratory is complete and the first analyses have commenced;

·      Rig count increased from 106 (30 June 2021) to 108 with the acquisition of new rigs to support existing contracts together with new business; and

·      The Group’s portfolio of ten long-term mine-site based contracts performed well.

Outlook

·      The Company once again delivered the highest quarterly revenues since its inception, and we see a robust outlook for the remainder of the year;

·      As a result we are increasing revenue guidance for 2021 to $220-225 million compared to $200-210 million at the Q2 trading update and $185-195 million originally guided at the FY20 results;

·      The drilling business has a strong outlook for the remainder of the year, as we move past the seasonally weak Q3, and further rigs arrive in the last quarter;

·      Sukari earth moving has achieved target run rates ahead of contract expectations;

·      MSALABS is seeing strong demand for its laboratory services and the rollout of the Chrysos units is progressing well with two further units due to be installed in Q4 2021;

·      Tendering activity across all business units remains robust, with a number of opportunities progressing; and

·      Macro conditions continue to suggest sustainability in the strong demand environment with gold still trading at near decade long highs – a strong tailwind for Capital with c.90% of revenue exposed to the African gold mining sector.

Commenting on the trading update, Jamie Boyton, Executive Chairman, said:

“The third quarter of 2021 has again seen Capital hit its strongest revenue performance since its inception. While we saw a slight seasonal dip in drill rig utilisation, ARPOR remained strong and performance for the Group improved as contribution from the Company’s non-drilling services increased. This reinforces Capital’s strategy of diversifying its revenue streams and focusing on mine sites to drive strong organic growth and ensure a sustainable business through the cycle. 

Sukari mining has hit target run rates having outperformed contract expectations, and with new contract wins cementing the outlook for drilling for the remainder of the year, today we have raised our revenue guidance once again for 2021. Amongst the strong momentum across all areas of the business it is of particular note that we have seen continued excellence in our safety performance.

Looking ahead we continue to see strong demand across all our business areas with the tender pipeline looking very encouraging. We see increased activity with our existing clients, given high commodity prices, but also new opportunities are opening in our key market Egypt, with exploration in the country showing very positive signs as we begin exploration contracts at Sukari and also with Thani and Allied.”

Click to view all articles for the EPIC:
Or click to view the full company profile:
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Capital Limited

More articles like this

Capital Limited

Gold prices surge

Gold prices rose as soon as the U.S. Federal Reserve announced that it may slow the pace of interest rate hikes in the future. Globally, gold prices bounced above the key $1,750 an ounce level on Thursday, consolidating

Capital Limited

Gold pinned near 3-month high

Gold prices hovered near three-month highs on Tuesday as mixed signals from Federal Reserve officials on the path of U.S. interest rates kept the dollar pinned to recent lows, while copper prices sank as rising COVID-19 cases in

Capital Limited

Improving safety standards in Africa

At Capital, we have an uncompromising commitment to the occupational health and safety of our employees and others where we work. Through our Tanzanian-based JV partner, International Apprenticeship and Competency Academy Limited (IACA) we now have access to

Capital Limited

Capital Ltd appoints Rick Robson as Chief Financial Officer

Capital Ltd (LON:CAPD) has announced the appointment of Mr. Rick Robson as Chief Financial Officer (“CFO”) following the departure of Mr. Giles Everist. Mr. Robson will replace Mr. Giles Everist with effect from 01 January 2023 and will

Capital Limited

Gold firms as dollar rally pauses

Gold prices rose on Monday after declining more than 1% in the previous session, as a pause in the dollar rally alleviated some pressure from the greenback-priced bullion, though looming U.S. rate hikes restricted further gains. Spot gold XAU= rose

Capital Limited

Capital welcomes new CEO

Capital have welcomed new Chief Executive Officer, Peter Stokes, who commenced on 3 October 2022. Peter’s appointment will support the next phase of Capital’s growth strategy, as they continue to rapidly expand their four key pillars. Peter has

Capital Limited

Gold firms on softer dollar

Gold prices edged higher on Monday on a softer dollar, although prospects of central banks worldwide retaining their aggressive monetary policy stance limited the gains for safe-haven bullion. Spot gold XAU= rose 0.3% to $1,663.99 per ounce, as of 0416

Capital Limited

Gold firms on slightly softer dollar

Gold prices rose on Tuesday as the dollar slipped, but the metal languished near a 2-1/2-year low on prospects of further rate hikes by the U.S. Federal Reserve to tame soaring inflation. Spot gold was up 0.4% at $1,628.78

Capital Limited

Capital Ltd extends drilling contract at B2Gold’s Fekola mine to end 2024

Capital Ltd, the leading mining services company, has announced the award of a new drilling contract and the associated purchase of additional drill rigs and other capital equipment. The new contract is an expanded drilling services agreement with B2Gold Corp at the Fekola Gold Mine in Mali, which

Capital Limited

Capital Ltd – Interim results presentation

Capital Ltd (LON:CAPD) provide complete exploration and production drilling solutions to customers within the global minerals industry, with a focus on the African markets.

Capital Limited

Gold edges higher

Gold prices inched up in early Asian hours on Tuesday, as the dollar eased off a 20-year high, offsetting pressure from expectations of the U.S. Federal Reserve keeping interest rates higher for longer to combat inflation. Spot gold ticked

Capital Limited

Gold prices edge higher

Gold prices edged higher on Tuesday after hitting a near one-month low in the previous session, helped by a slight pullback in the dollar although lingering worries over further aggressive U.S. interest rate hikes kept gains in check.

Capital Limited

Perth Exploration & Mining Sundowner

AAMEG PERTH EXPLORATION & MINING SUNDOWNER BROUGHT TO YOU BY CAPITAL LTD LOCATION: Mayfair Lane – 72 Outram Street, West Perth WA 6005 TIME: From 4.30pm, Wednesday 17 August Join AAMEG together with major event sponsor, Capital Ltd to enjoy

No more posts to show