REG - Capital Limited - Q1 2025 Trading Update

CapitalAnnouncement

23/04/2025 07:00

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RNS Number : 7277F  Capital Limited  23 April 2025

Capital Limited

("Capital", the "Group" or the "Company")

 

Q1 2025 Trading Update

 

Capital (LSE: CAPD), a leading mining services company, today provides its
trading update for the period 1 January to 31 March 2025 (the "Period").

 

FIRST QUARTER (Q1) 2025 KEY METRICS

                                  Q1 2025*  Q1 2024  vs        Q4 2024  vs

                                                     Q1 2024            Q4 2024
 Revenue                          71.8      80.2     -10.5%    84.9     -15.4%
 Drilling and associated revenue  57.7      52.2     10.5%     62.9     -8.3%
 Mining revenue                   0.6       18.2     -96.7%    9.6      -93.8%
 MSALABS revenue                  13.5      9.8      37.8%     12.4     8.9%

All amounts are in USD million unless otherwise stated

* Unaudited numbers

 

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

"Q1 2025 revenue was in line with our expectations, down on Q1 2024 due to the
conclusion of the mining contracts at both Sukari and Belinga but we are
pleased to have made a strong start to the mobilisation of equipment at the
Reko Diq project in Pakistan. We have made excellent progress in the
onboarding of local employees and have commenced generating revenue in Q2 2025
with the commissioning of the initial fleet from Belinga, with the first of
the Sukari fleet due to arrive in country imminently.

Drilling revenue was up YoY with utilisation remaining around our target
level. As management continue to focus on our operations in the US, we expect
to drive further gains through the year, albeit weighted to the second half.
MSALABS has had a strong start to the year, with Q1 revenues up significantly
YoY, particularly driven by increased utilisation at Nevada Gold Mines as well
as our new commercial laboratory in Fairbanks, Alaska.

This quarter saw the business lay the foundations to drive positive momentum
through the remainder of the year and we reiterate the $300 - 320 million
revenue guidance set at our FY24 results."

Financial Highlights

·     Revenue of $71.8 million, a 10.5% decrease on Q1 2024 ($80.2
million) and a 15.4% decrease on Q4 2024 ($84.9 million);

-     Drilling and associated revenue for the quarter was $57.7 million,
up 10.5% on Q1 2024 ($52.2 million) and down 8.3% on Q4 2024 ($62.9 million);

-     Mining revenue for the quarter was $0.6 million, down 96.7% on Q1
2024 ($18.2 million) and down 93.8% on Q4 2024 ($9.6 million); and

-     MSALABS revenue for the quarter was $13.5 million, up 37.8% on Q1
2024 ($9.8 million) and up 8.9% on Q4 2024 ($12.4 million).

·     Final dividend of 1.3cps declared at the FY24 results for the 2024
financial year (2023: 2.6cps) will be payable 15 May 2025.

 

Operational Update

·     Safety performance remains outstanding with Q1 2025 Total Recordable
Injury Frequency Rate ("TRIFR") of 0.99 per 1,000,000 hours worked (FY 2024
0.78).

Capital Drilling: Expecting positive momentum through the year

·     Fleet utilisation for the quarter improved to 73%, from 66% in Q1
2024 and decreased from 77% in Q4 2024. Average utilised rigs, however,
remained broadly in line with Q4 2024, with utilisation remaining broadly in
line with our target rate of 75% across the fleet.

·     Average monthly revenue per operating rig ("ARPOR") was $182,000 in
Q1 2025, down 9.9% on Q1 2024 ($202,000) and 7.6% on Q4 2024 ($197,000). This
reduction in ARPOR is primarily due to replacement rigs being commissioned and
not yet hitting their full run rate productivity and we therefore expect ARPOR
to improve through the year.

·     New contract wins:

-     An extension of our diamond and reverse circulation drilling
contract with Perseus Mining at its Nyanzaga Gold Project in Tanzania;

-     A diamond drilling contract with Sanu Gold at their Daina and
Diguifara projects in Guinea;

-     A diamond and reverse circulation drilling contract at Asara
Resource's Kada Gold Project in Guinea; and

-     A diamond and reverse circulation drilling contract with Koulou Gold
at their Sakassou project in Côte d'Ivoire.

·     Nevada Gold Mines drilling: The onsite team and management have
spent significant time overseeing operational plans to drive efficiency at the
site. As a result, ARPOR has improved quarter-on-quarter and Q1 2025 was the
strongest quarter since the contract began. Nevertheless, further improvements
are required to hit our target run rates which will be weighted to the second
half of the year.

 

                                                Q1 2025*  Q1 2024  vs        Q4 2024  vs

                                                                   Q1 2024            Q4 2024
 Closing fleet size                             135       124      8.9%      130      3.8%
 Average Fleet                                  134       123      8.9%      129      3.9%
 Fleet utilisation (%)                          73%       66%      10.0%     77%      -5.2%
 Average utilised rigs                          98        81       21.0%     99       -1.0%
 ARPOR(1)($)                                    182,000   202,000  -9.9%     197,000  -7.6%
 Surveying revenue ($m)                         1.7       0.9      87.3%     1.8      -5.6%
 Total Drilling and associated revenue(2) ($m)  57.7      52.2     10.5%     62.9     -8.3%

All amounts are in USD unless otherwise stated

*Unaudited numbers

(1)Average revenue per month per operating rig

(2)Associated revenue refers to revenue generated from complementary services
tied to our drilling operations

 

Capital Mining: Ramp up at Reko Diq on track

·     Reko Diq mining services contract now operating:

-     As previously announced, we have now signed a mining services
contract with Reko Diq Mining Pakistan Limited, operated by Barrick, for the
world-class Reko Diq copper-gold project;

-     The contract is planned to run through to December 2028 and generate
over $60 million in annual revenue once fully operational. The agreement also
includes a provision for a five-year contract extension after 2028 and covers
two major scopes of work: early works civils and tailings storage facility
(TSF) mining services;

-     The early works civils scope focuses on the construction phase at
Reko Diq, prior to first production. We will use our mining equipment
previously used at Belinga and expect to achieve full run rate from Q4 2025;
and

-     The TSF scope focuses on the construction and ongoing maintenance of
the tailing storage facility. We will utilise the majority of the fleet from
Sukari and expect to commence operations in Q4 2025, reaching full utilisation
in the second half of 2026.

·     Activities already commenced at Reko Diq:

-     We have completed delivery, recommissioning and certification for
the early works civils fleet, which was achieved ahead of schedule. We have
now commenced early works and establishment operations and we are generating
revenue from Q2 2025; and

-     We have hired 177 national employees out of a planned ~380. Of these
new hires, 60 national employees completed their initial Health & Safety
training at our Karachi office in March and were deployed to site in April to
commence hands on practical training.

MSALABS: Growing the business with focus on profitability

·     Revenue in Q1 grew strongly despite typical seasonality effects
including winter slowdown in Canada;

·     The first stage of our state-of-the-art laboratory at Nevada Gold
Mines, equipped with two Chrysos PhotonAssay(TM) units continues to ramp up
capacity. Detailed design of second-stage wet chemistry and multi-element
assaying facility is well advanced;

·     A third Chrysos PhotonAssay(TM) unit will shortly be arriving at our
facility in Elko, Nevada, with installation and commissioning taking place
through Q2 2025 and sample processing subsequently in Q3 2025; and

·     Our new commercial laboratory in Fairbanks, which is underpinned by
large scale contracts with both Northern Star and Kinross, is also receiving
samples.

Capital Investments: Strong momentum through the quarter

·     The total value of investments (listed and unlisted) was $36.7
million as at 31 March 2025 up from $30.3 million as at 31 December 2024, with
the portfolio recording investment gains (realised and unrealised) of $7.3
million in Q1 2025; and

·     The portfolio continues to be focused on a select few key holdings
namely WIA Gold, Sanu Gold and Asara Resources.

Outlook

·     Revenue guidance for 2025 remains $300 - $320 million as guided at
our FY24 results;

·     Capital Drilling will see positive momentum through the year with a
focus on consolidating ramp ups in key growth areas, particularly in Nevada,
USA, and ensuring efficiency and productivity across the Group's drilling
operations;

·     Capital Mining will continue to progress the mobilisation of
equipment and training of national employees at Reko Diq. Revenue generation
on the contract has now commenced, with the ramp up weighted to the second
half of the year;

·     MSALABS will continue its focus on increased utilisation at its
commercial laboratories along with an overall focus on profitability across
the division. Guidance for MSALABS remains $50 - 60 million for 2025, another
significant increase YoY (FY 2024: $43.6 million); and

·     Tendering activity remains robust across the Group with several
opportunities progressing.

 

- ENDS -

 

For further information, please visit Capital's website www.capdrill.com or
contact:

 

Capital Limited
 
investor@capdrill.com

Jamie Boyton, Executive Chair

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

Varun Talwar

Rory Blundell

 

FTI
Consulting
+44 20 3727 1000

Ben
Brewerton
capitallimited@fticonsulting.com

Nick Hennis

Lucy Wigney
 

 

About Capital Limited

 

Capital Limited is a leading mining services company that provides 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 Canada, Côte
d'Ivoire, Democratic Republic of Congo, Egypt, Gabon, Ghana, Guinea, Kenya,
Mali, Mauritania, Pakistan, Saudi Arabia, Tanzania, United States of America
and Zambia.

 

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