REG - Capital Limited - Q1 Trading Update

CapitalAnnouncement

21/04/2022 07:00

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RNS Number : 8721I  Capital Limited  21 April 2022

 For Immediate Release  21 April 2022

 

 

 

Capital Limited

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

 

Q1 2022 Trading Update

 

Capital (LSE: CAPD), a leading mining services company focused on the African
markets, today provides its Q1 2022 trading update for the period ended 31
March 2022 (the "Period").

 

FIRST QUARTER (Q1) 2022 KEY METRICS

                        Q1 2022  Q1 2021  Q4 2021  % change from  % change from

                                                   Q1 2021        Q4 2021
 Revenue (US$m)         66.9     44.0     66.5     52.0%          0.6%
 ARPOR*(US$)            174,000  180,000  184,000  -3.3%          -5.4%
 Average utilised rigs  90       64       86       40.6%          4.7%
 Fleet Utilisation (%)  82%      67%      79%      22.4%          3.8%
 Average Fleet          110      95       109      15.8%          0.9%
 Closing fleet size     110      98       109      12.2%          0.9%

* Average monthly revenue per operating rig

 

Financial Highlights

·      Revenue US$66.9 million, a 52.0% increase on Q1 2021 (US$44.0
million) and a 0.6% increase on Q4 2021 (US$66.5 million);

·      Mine-site services continue to underpin revenue streams,
contributing 87% of Group revenue;

·      Strong growth in non-drilling revenue contribution (28% of total
revenue) compared with Q1 2021 (21%), particularly driven by the ramp up of
Mining Services and MSALABS;

·      Average monthly revenue per operating rig ("ARPOR") decreased
2.2% on Q1 2021 ($184,000) and 5.4% (US$174,000) on Q4 2021 (US$184,000).
ARPOR in the quarter was impacted by increased rig movement within each region
and also a higher proportion of revenue at Geita coming from the underground;

·      Final dividend of US 2.4 cps declared at the FY21 results for the
2021 financial year (2020: US 1.3 cps), will be payable 10 May 2022.

 

Operational Highlights

·      Fleet Utilisation increased to 82%, an increase of 22.4% on Q1
2021 (67%) and 3.8% on Q4 2021 (79%) driven by start-up of new contracts;

·      Safety performance remains world-class with the Group remaining
LTI free across twenty-six sites in Q1 2022;

-       Two sites in our East African operations achieved safety
milestones remaining LTI free for five and six years;

·      Capital Drilling: Outlook underpinned by further contract wins:

-     New contract wins:

§ An extension of the exploration and delineation drilling contract with
Predictive Discovery at its Bankan Project in Guinea, initially expanding from
2 to 5 rigs;

§ An exploration drilling contract with WIA Gold at its Bouaflé project in
Côte d'Ivoire;

§ An extension of the exploration drilling contract with Golden Rim at the
Kada Gold mine in Guinea;

§ An extension of the exploration drilling contract with Perseus Mining at
the Yaouré Gold mine in in Côte d'Ivoire;

-     Rig count increased from 109 (31 December 2021) to 110, with 5 rigs
due to be commissioned in Q2 2022.

·      Capital Mining continues to perform strongly

-     Sukari Gold Mine (Egypt) waste mining contract continues to perform
at steady state levels aligned to contract targets for the quarter;

-     Capital remains active in the tendering pipeline as mining projects
move through the DFS stage.

·      MSALABS: Growth trajectory on track

-     The rollout of the Chrysos'™ PhotonAssay units is progressing
well:

§ MSALABS provisionally awarded a 5-year agreement with Barrick at the Kibali
Gold Mine in the Democratic Republic of Congo for provision of laboratory
management, sample preparation, and geochemical assay services on site,
subject to final terms and conditions. The contract includes the new Chrysos
PhotonAssay technology, with a unit expected to be on site in H2 2022;

§ Awarded a 12-month contract with New Found Gold for processing 20,000
samples per month through our new Val d'Or PhotonAssay facility commencing in
Q2 2022;

-     Awarded a 3-year contract with Victoria Gold Corp for the provision
of a sample preparation facility on site at its Eagle Gold Project near Mayo,
Yukon as well as geochemical assay services in our Langley Hub laboratory;

-     Awarded a 2-year contract and commenced provision of services with
Shanta Gold for sample preparation on site at their West Kenya Project Area.

 

Outlook

 

·      Q1 2022 has continued to see robust demand with the outlook
remaining strong across all business units;

-       The drilling business has a strong outlook with utilisation
rates at very high levels and the group's rig count due to finish the year ~10
rigs higher than at the end of Q1 2022;

-       The Sukari earth moving contract is now performing at steady
state levels;

-       MSALABS is experiencing very strong demand for its laboratory
services with the rollout of the Chrysos units progressing further in Q1 2022
and set to continue through the remainder of the year;

-       Business mix underpinned by long-term mine-site contracts with
blue-chip customers, with  non-drilling revenues to proportionally increase
further through 2022;

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

·      Macro conditions continue to suggest sustained strength in the
demand environment and outlook with gold and other key commodities still
trading at near decade long highs; and

·      Revenue guidance for 2022 remains $270 to $280 million (compared
to FY2021 revenues of $226.8 million).

 

 

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

'The Group had another strong performance through Q1 2022 across all its
business units, setting a solid foundation to deliver another record year in
2022. While we continue to see growth across all business units, our focus on
operational excellence and safety remains paramount and so it is pleasing to
see another world class performance. Market conditions remain buoyant, and we
are very active in the tendering market across drilling, mining and MSALABS.
We maintain our revenue guidance of $270-280 million.

 

In drilling, while we saw some short term variation in group ARPOR,
utilisation rates were very strong as a number of new contracts were brought
online. We expect the division to continue to grow through the year, with the
expected increase in rig count weighted Q2-Q4 of this year. Our mining
division continues to perform well with Sukari now operating at peak steady
state levels. MSALABS also continues to go from strength to strength on an
exceptional growth trajectory, both with its traditional business and in the
roll out of the revolutionary Chrysos technology, highlighted by the clear
demand for the unit in Val d'Or and the provisional award for a unit at
Barrick's Kibali Gold mine.'

 

- ENDS -

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

 

 Capital                                                                                                                                                                  +230 464 3250
 Limited

                                                                                                                                                                        investor@capdrill.com (mailto:investor@capdrill.com)
 Jamie Boyton, Executive
 Chairman

 Giles Everist, Chief Financial Officer

 Conor Rowley, Investor Relations & Corporate Development Manager

 Berenberg                                                                                                                                                                +44 20 3207 7800

 Matthew Armitt

 Jennifer Wyllie

 Detlir Elezi
                                                                                                                                                                          +44 20 3882 2868

 Tamesis Partners LLP

 Charlie Bendon

 Richard Greenfield
                                                                                                                                                                          +44 20 7710 7600

 Stifel Nicolaus Europe Limited

 Ashton Clanfield

 Callum Stewart

 Rory Blundell

 Buchanan                                                                                                                                                                 +44 20 7466 5000

 Bobby Morse                                                                                                                                                              capital@buchanan.uk.com

 James Husband

 

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, focusing on the African
markets. The Company's services include: exploration, delineation and
production drilling; load and haul services; mining equipment hire and
maintenance; and geochemical analysis. The Group's corporate headquarters are
in Mauritius and it has established operations in Burkina Faso, Côte
d'Ivoire, Egypt, Guinea, Kenya, Mali, Mauritania, Nigeria, Saudi Arabia and
Tanzania.

 

 

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