egd jan2013

24
CORPORATE PRESENTATION JANUARY 2013

Upload: adnet-communications

Post on 18-Dec-2014

1.088 views

Category:

Documents


1 download

DESCRIPTION

 

TRANSCRIPT

Page 1: Egd jan2013

CORPORATE PRESENTATION JANUARY 2013

Page 2: Egd jan2013

This presentation contains certain forward-looking statements and information relating to

Energold that are based on the beliefs of its management as well as assumptions made by and

information currently available to Energold. When used in this document, the words “anticipate”,

“believe”, “estimate”, “expect” and similar expressions, as they relate to the Company or its

management, are intended to identify forward-looking statements.

This presentation contains forward looking statements relating to, among other things, regulatory

compliance, the sufficiency of current working capital, the estimated cost and availability of funding

for the continued exploration and development of the Company’s exploration properties. Such

statements reflect the current views of the Company with respect to future events and are subject

to certain risks, uncertainties and assumptions. Many factors could cause the actual results,

performance or achievements of the Company to be materially different from any future results,

performance or achievements that may be expressed or implied by such forward-looking

statements.

George Gorzynski, P.Eng., a Qualified Person under the meaning of Canadian National Instrument

43-101,is responsible for the IMPACT Silver Corp. technical information in this presentation.

2

FORWARD LOOKING STATEMENTS

Page 3: Egd jan2013

• Global Specialty Drilling Contractor

Providing socially & environmentally sensitive drilling

services to the international mining & energy sector.

• Market Leaders in ‘Frontier Drilling’

Proprietary mineral drilling rig platform designed for

drilling in remote and diverse sub-terrain locations with

limited infrastructure as well as sensitive environmental

and social issues.

• Global Footprint

Operating 234 rigs in 22 countries across all metal and

mineral targets.

• Proven Track Record of Performance

Compounded annual growth in revenues of >25% over

the last 6 years.

Energold’s Highly Mobile Surface Rig in Operation

Durango, Mexico

3

OUR BUSINESS

Page 4: Egd jan2013

4

Mining

Energold Drilling’s

original and primary line of

business

Market leader in frontier

drilling services, operating

in 22 countries spanning

broad spectrum of minerals

and resources

Minimizes

environmental and social

impact with proprietary

man-portable drills

Energy

Significant presence in

the Canadian oil sands

coring market

Bertram acquisition (2011)

added 129 rigs to Energold

and paved way into energy

drilling market

Adds stability to cash flow,

reduces overall seasonality

and provides risk

diversification from mining

cycles

Manufacturing

Dando Drilling UK

provides manufacturing,

engineering, and

maintenance of

next generation,

multi-purpose rigs

Capabilities across all drill

types, with historical focus

on water well drilling

United Nations approved

vendor in Africa

OUR BUSINESS SEGMENTS

Page 5: Egd jan2013

• Modular Component Design

– Easy to transport within country, across challenging terrain as well as rapid mobilization globally to reduce downtime

• Proprietary Technology

– Depth capabilities of over 850m with ¼ inch greater core diameter using Thin Wall rod system

– Competitive portable rigs only reach depths between 200–300m BTW

• Rigs Built In-House

– Ensures proprietary nature of rig designs

– Continual upgrades are implemented from input of field personnel

5

OUR TECHNOLOGY

Page 6: Egd jan2013

6

WORLD WIDE OPERATIONS

World-Wide Operations Energold has offices and/or operations in 22 countries with complete jurisdictional compliance

and logistical support.

Contractor Of Choice Commence relationships with frontier drilling programs that historically continue through to downstream

stages of development. Current & historic client list includes many of the leading global mining companies.

Rig Fleet Energold has increased its fleet size in response to demand by an average of 70% per year over the last 6 years with

a current rig count of 234 (including diamond and energy drilling). Mobile rig platforms can be re-deployed more efficiently and

cheaper than conventional rigs.

Page 7: Egd jan2013

Dominican Republic

Peru

Albania

Guinea

7

GLOBAL PROJECT EXAMPLES

Frontier Drilling Specialists

Page 8: Egd jan2013

Energold’s clientele

includes many of the world’s

largest mining companies.

Existing clientele range

from early-stage junior

explorers to well known,

mature producers spanning all

base and precious metals, as

well as industrial commodities.

MAJORS

• Barrick Gold

• BHP Billiton

• Goldcorp

• Grupo Mexico

• Rio Tinto

• Newmont Mining

• Penoles

• Vale

• AngloGold

• Fresnillo

• El Dorado Gold

• Codelco

JUNIORS

• Grayd Resources (now Agnico-Eagle)

• US Gold (now McEwan Mining)

• Great Panther Silver

• First Majestic Silver

• Olympus Pacific Resources

• Magellan

• GoldQuest Mining Corp. 8

CUSTOMER PROFILE

Page 9: Egd jan2013

CDN$ (000’s) 2009 2010 Dec 31, 2011 YTD (Year to Date) 2012

Revenue 23,719 54,591 133,482 $115,810

Net Earnings (1,951) 1,449 26,428 ($2,955)*

EPS (0.06) 0.04 0.65 ($0.07)*

Cash 18,460 28,225 $22,782 $27,800

Working Capital 46,319 61,461 $69,341 $96,549

• 9 Months Ended Sept 30, 2012 Q3 continue to be challenging for juniors and overall cautious

capital markets. Mineral operations still profitable. Manufacturing growing and building rigs.

• Energy division mobilizing and has seen record quarterly revenues, Q4/Q1 peak coming.

• Maintaining average revenue per meters of over $190/metre+ 9

FINANCIAL HIGHLIGHTS

* Note adjustment for Bonus Payment to Energold Energy of $7.5 million up to June 2012 on meeting EBITDA targets of

over $5 million. Annual payment capped at $10,500,000. Additional amortization expense due to IFRS gain on

acquisition (refer to Q4 figures) of $3,25 million YTD. Adjusted EPS with just Bonus Expense would be $0.14 YTD.

Q2 2012 Q3 2012 % Change

Revenue

Mineral 22,273 17,253 (22)% Energy 4,438 9,037 203% Manufacturing 5,939 3,603 (39)%

Total Revenue 32,650 29,890 (8.4)%

Page 10: Egd jan2013

10

FINANCIAL REFLECTS GROWTH

Rig Count EPS Growth*

Revenue

Meters Drilled

Page 11: Egd jan2013

Rig Count Growth (2010-2011) Global Presence (Countries)

Market Cap and Liquidity Revenue Growth (2010-2011)

11

DIVERSIFIED GLOBAL GROWTH

AND VALUE PRICED VS PEERS

Page 12: Egd jan2013

TRADING SYMBOL EGD : TSX.V

SHARE PRICE $3.00

ISIN CA29268A1030

SHARES O/S 46.2 MILLION

SHARES F/D 47.1 MILLION

MARKET CAP $161 MILLION

INSTITUTIONAL OWNERSHIP 25%

MANAGEMENT OWNERSHIP 10%

Fred Davidson CA MBA – President, CEO and Director

James Coleman LLB – Chairman and Director

Steven Gold CFA – Chief Financial Officer

Craig Geier HBA – Managing Director (Dando Drilling Services)

H. Walter Sellmer – Director

Michael J. Beley – Director

Wayne Lenton – Director 12

CORPORATE SUMMARY

Page 13: Egd jan2013

STRONG INDUSTRY

FUNDAMENTALS

• Commodity prices vs. production

cost favours continued exploration

• New sizable discoveries are

increasingly difficult to find,

forcing traditional miners to seek

resources in frontier regions that

require specialized equipment

• Producers with record cash levels

seeking to replenish reserves

(evident by recent M&A activities

in market)

• Frontier drilling activity is needed

for new discoveries

Source: MEG, PriceWaterhouseCoopers

13

MINING INDUSTRY

– POSITIVE OUTLOOK

Page 14: Egd jan2013

• Proven player in sizable oil sands

market dating back to 1963

• Niche, high-margin market with

short and long-term growth

• Oil Sands coring – smooth out

Energold traditional slow mineral

seasons (Q4/Q1)

• Re-allocation under-utilized drill

fleet (seismic and specialty) within

Energold’s global network

• Synergy from people – trained

drillers in coring can transition to

mineral drilling and vice-versa

Bertram TH60

Coring Rig

14

ENERGOLD ENERGY

BERTRAM INTERNATIONAL CORP.

LIS GT1

Seismic Drilling Rig

Page 15: Egd jan2013

World Class Resources

• Oil sands represent

97% Canada’s oil reserves1

Sizable expenditures expected

• About $84 billion per year

investment for next 25 years

Oil Sands project are long-term

• Less susceptible to short term

pricing fluctuations as compared to

metal markets

1. Environmental Canada May 2011 Oil Sands Report

2. CAPP http://www.capp.ca/getdoc.aspx?DocId=191939&DT=NTV

3. Canada National Energy Board – Energy Oil Sands Assessment 2006 15

ENERGY INDUSTRY

(OIL SANDS) OUTLOOK

Page 16: Egd jan2013

• Over 150 years of

experience in designing

and manufacturing

of larger rigs in the UK

• Maintenance, servicing,

and sales of rigs and

parts to third parties

• Expertise in water well

drilling

• Building a new services

division that can leverage

the existing Energold

logistics network

Mineral Multipurpose

Geotechnical

16

ENERGOLD MANUFACTURING

DANDO INTERNATIONAL LTD.

Waterwell

Page 17: Egd jan2013

• Growth: The manufacturing

and equipment demand for

commodity industry is growing

at CAGR of 8%, order backlog

up 11%.1

• Potential: Global mining

equipment market is $61

billion. At $14.2 million

(2011), Energold is just 0.02%

of the market.

1. Caterpillar Global 2012 Outlook http://www.reuters.com/article/2012/07/25/us-caterpillar-results-

idUSBRE86O0NM20120725

2. Boart Longyear 2012 First Half Outlook (Chart)

3. Standard & Poors – Credit Week Feb 2012 17

MANUFACTURING

INDUSTRY DEMAND CONTINUES

Page 18: Egd jan2013

• Positive Social Impact

– Employment opportunities provided to local communities

– Helpers are trained in work-safety and acquire mechanical experience

• Positive Environmental Impact

– Highly portable rigs leave a small environmental footprint

– Most jobs completed without cutting down trees or creating access roads

• Third Party Recognition for Positive Approach

– PDAC Environmental Excellence in Exploration Case Study (E3 Initiative)

A social and environmental approach to

any drilling program leads to a more

successful outcome for all parties involved.

18

SOCIAL & ENVIRONMENTAL

Haiti Bridge

Infrastructure Project

Page 19: Egd jan2013

• IMPACT Silver Corp is a profitable

silver producer in Mexico

• ENERGOLD DRILLING CORP

owns 6.87 million shares (11%~)

• OPERATIONS

Three profitable, operating mines

at the Royal Mines of Zacualpan

• EXPLORATION

Huge exploration potential in

623 sq. km composed of two

under-explored Silver districts

• DEVELOPMENT

Capire open pit mine

scheduled for production in winter

2012 – early 2013.

Zacualpan Processing Plant

SYMBOL IPT-TSX.V

SHARE PRICE $1.30

MARKET CAP $91 M

CASH $23 M

19

INVESTMENT HOLDINGS:

IMPACT SILVER CORP.

Page 20: Egd jan2013

20

EXPANSION OF “CORE BUSINESS” MINERAL

DRILL FLEET

• Grow mineral drilling rig fleet

to solidify existing markets

• Continued growth of frontier

drilling and transitioning with

clients to mature projects with

larger conventional drills

• Organic growth and search

for acquisitions in existing

and new markets

• Continue technological

advancements in rig design

and capabilities.

SEED AND EXPAND INTO NEW MARKETS

• Capitalize on high growth frontier regions such as South/Central America, Southeast Asia & Africa.

• Pursue additional ‘bolt-on’ acquisitions in target regions.

• Grow underground drilling services.

• Grow water well drilling business

• Expand drilling services and multi-purpose and reverse circulation (RC)

GROW ENERGY AND MANUFACTURING

DIVISIONS

• Energold Energy division continues to benefit from niche market expertise in unconventional and conventional markets

• Grow manufacturing services and utilize capabilities to build larger rigs over time

• Grow new business divisions including the historical Dando footprint in water well activity

20

GROWTH STRATEGY

Page 21: Egd jan2013

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

2006 2007 2008 2009 2010 2011

Revenues

Net Earnings

Operating Cash Flow

CD

N$ 0

00

’s

Year 21

IMPACT SILVER CORP.

PROFITABLE GROWING PRODUCER

2011 2010 2009 2008 2007 2006 %

2006-2011

Total tonnes processed (t) 154,289 131,348 114,340 102,426 99,918 68,173 +126%

Tonnes processed per day (t) 424 360 313 280 274 196 +116%

Silver (oz) Production 833,607 750,259* 823,571 645,668 349,949 465,673 +79%

Lead (t) Production 731 734 969 813 601 375 +95%

Zinc (t) Production 1,248 1,212 1,098 1,053 976 725 +72%

Revenue per tonne sold $171 $123 $110 $90 - - +90%

Direct cost per tonne sold $70 $63 $60 $55 $44 $60 +17%

Page 22: Egd jan2013

Analyst Company Contacts Updates

Michael Mills CFA MBA Beacon Securities 416-643-3871 Nov 27, 2012

Maggie Johnson BBA Cormark Securities 416-362-7485 Nov 26, 2012

Peter Prattas CA CFA Fraser Mackenzie 416-682-4243 Nov 27, 2012

Russell Stanley CFA MBA Haywood Securities 416-507-2328 Nov 27, 2012

Ben Jekic CFA Industrial Alliance 416-203-5826 Nov 26, 2012

Kam Mangat CFA Salman Partners 416-861-1270 Nov 26, 2012

Scott Parsons CFA Toronto Dominion (TD) 416-307-9360 Nov 26, 2012

22

ANALYST COVERAGE

Page 23: Egd jan2013

• Energold presents a compelling opportunity to invest in a broad range of commodities

and projects worldwide

• Catalysts for growth – commodities remain strong and significant potential in energy

• Favorable balance sheet allows EGD to navigate and capitalize on

market conditions 23

INVEST IN ENERGOLD TODAY

Page 24: Egd jan2013

Contact info

Jerry Huang MBA

Manager Investor Relations

jhuang@ energold.com 604-681-9501