Capital Drilling taps quarter-on-quarter growth and busy end to 2019

Mining company Capital Mining Ltd (LON: CAPD) recorded progress during the third quarter and gears itself up for a busy end to FY 2019, with revenues currently lagging behind on a year-on-year comparison.

Company revenues grew 6.1% compared to the previous quarter, up to US $29.4 million. However, on-year revenues contracted 5.2% from $31.0 million for Q3 2018. This trajectory was cemented by its average monthly revenues per operational rig, which dipped 4.4% during the quarter to $174,000, and 12.1% year-on-year for Q3, down from $198,000.

While these results aren’t too encouraging, the Group made significant operational progress during the period, including being awarded its first comprehensive mining services contract with Allied Gold Corp at its Bonikro Gold Mine in Côte d’Ivoire.

The Company added that its, “Extension of services to incorporate load and haul enables Capital Drilling to offer clients a fully integrated mining service, providing the ability for Capital Drilling to pursue transformational growth opportunities with a broader base of long-term mine site based clients.”

It finished by boasting continued operational profitability and development driven by ten new exploration contract awards in 2019, alongside a 17% in its interim dividend paid at the end of the first half, up to 0.7 cents per share.

Capital Mining comments

Responding to teh update, Executive Chairman Jamie Boyton said,

“In the first nine months of 2019 Capital Drilling has positioned itself for further growth, which is now bearing fruit with strong exploration contracting and mobilisation activity and, as recently announced, broadening our service offering with the award of our first comprehensive mining services contract with Allied Gold Corp at their Bonikro gold project. Our West African growth strategy continues to pay dividends, with a record number of contracts commencing in Q4. During the quarter, we have invested to support the new contracts, and we are confident that Capital Drilling is building a stronger, broader revenue base as a result. With increasing activity levels already seen in Q4, underpinned by high quality long term contracts, we are optimistic of a solid performance for the remainder of the year as well as into 2020.”

Investor notes

The Company’s shares rallied modestly by 0.39% or 0.24p following the update, up to 63.74p per share 15/10/19 08:54 BST. Analysts from Peel Hunt reiterated their ‘Buy’ stance on Capital Drilling stock. The Group’s p/e ratio is 14.05, their dividend yield stands at 2.56%.

Elsewhere in the mining and minerals sector, recent updates have come from; Griffin Mining Ltd (LON: GFM), Alien Metals Ltd (LON: UFO), Highland Gold Mining Ltd (LON: HGM), Kavango Resources PLC (LON: KAV), URU Metals Ltd (LON: URU), Resolute Mining Limited (LON: RSG), Bisichi Mining PLC (LON: BISI).

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.