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Africa Outlook

Energold
Drilling

ENERGOLD DRILLING

Global speciality driller

Canadian company Energold Drilling Corp is listed on the Toronto Venture Stock Exchange (EgD:tSX-V) and can drill in most conditions using modular portable drilling rigs which are manufactured in-house. Vice President of operations for the Europe, Middle East and Africa Division, Richard Thomas, tells us more.

Writer Ian Armitage
Project manager Debbie Clark

Energold is unique in the industry and over the last 10 years has enjoyed a period of rampant growth. that growth has stabilized due to global market pressures in the resource sector but the firm has maintained a robust balance sheet, making a series of acquisitions in the mineral exploration, manufacturing and energy sectors, providing diversification of its drilling operations and the benefit of complementary skills.

"We operate a fleet of over 140 mineral exploration rigs in over 20 countries worldwide and have become a global specialty drilling services provider," says Vice President of operations Richard Thomas. "We've a niche know-how of frontier drilling."

Envirodrill ltd, which was a "private family company with 10 drills" in west Africa, was acquired in 2010 off erring Energold a gateway into African markets. The firm was set up by Mr. Thomas's father. "within a year of meeting Energold Drilling Corp in March 2009, Envirodrill had done a deal and we became the managers of Energold's African operations," he says. "Fred Davidson, the CEO of Energold Drilling Corp calls it a semi-autonomous operation, which I think is very important. We've got the backing of the group, but we're given the flexibility to approach different markets. I think the key to being able to offer the full service is a well-funded support network which the group structure provides. We want to be able to provide the service the clients want, drill the holes, and do it in a cost effective way – without any drama – and that's what we're aiming to do."

Mr. Thomas has over 30 years' experience of managing all types of drilling operations as do much of his EMEA Division team. "Envirodrill Ltd. was a family company set up in the late 70s. I joined it in 1981," he says. Even before the investment of the Energold group, Envirodrill was looking to smaller, more portable type rigs. "We've got drill rigs which can be split down into modular parts, so each section can come apart. They can be carried by men or by land cruiser 4x4 vehicles, by mules or by canoes – whatever method is needed to allow site access. Each rig module weighs 180kg or less which allows us to carry the rigs through the bush or plantations and avoids the need for roads and subsequent land damage."

This low-impact machinery reduces the need for infrastructure in remote areas and therefore the amount of damage and ultimately compensation which exploration companies might otherwise have to pay. "Our method greatly reduces those demands on the client."

With the support from the Energold group, in 2010 the former- Envirodrill operations were able to invest in greater numbers of the low-impact smaller drills, and build a strong niche offering. Mr Thomas' operations went from being a private company of 10 drills, mostly in West Africa, to being part of a company with over 140 – 45 of which are part of the EMEA division, and with a much larger global reach.

"As Envirodrill the biggest challenge was funding and Energold is well-funded and that makes a dramatic difference. Energold has good resources, good coffers and diversified streams so the challenge is just the general global market downturn," Mr. Thomas says. He is looking to expand the division back into Europe and the Middle East, the latter region already has its first project in Saudi Arabia. "Having the niche offering of the portables is putting us in a good stead to go forward. the technological development has also been ongoing. with our sister Company in the UK, Dando Drilling International, we've assisted with development of the Energold Series 3.5 using experiences of operating the portable fleet on remote contracts and we're by far the largest operator of this kind of portable exploration rig."

With a client-centric service, new technology and a strong cash reserves, Energold group's mineral exploration operations are spread widely across Africa, Central and South America and into Asia, with plans to continue expanding in the Middle East where they already have one rig operating and have bid further projects.

In the EMEA division there is a "five year plan to continue the growth up to 100 rigs," says Mr. Thomas. "It is subject to market conditions but we believe we can do it," he adds.

Another area for expansion is to return to old contacts and sites in Europe, where the quality of the Envirodrill work is missed.

"We're still pushing in Africa, that is our key market, but now we're also developing into the old areas where we have been previously and where we're going to try and drive growth."

Complimentary to the portable rigs, Energold offers its clients larger, conventional style drilling as well as air drilling with the RC rigs, ensuring a multi-faceted approach in the market place. In addition, the types of markets are changing.

With commodity prices under downward pressure, Energold is expanding into water and geotechnical drilling and other mine site related programmes as well as continuing to serve its core market of mineral exploration.

So, how does Energold reach these areas other contractors can't? "We do this with a skilled core team and support staff," says Mr Thomas. "Energold have got a drill school in the Philippines which was developed in the Envirodrill days and that Energold continued to develop. Obviously we've got a lot of rigs to keep busy and, you've got to have a pool of talent available to come through and operate your machines – especially to the standards that we require."

In addition, many of the staff have grown and risen through the ranks: "We look to skilled staff retention as a key part of our operations which allows us to offer a consistent level of service to our clients," says Mr Thomas.

By developing talent, Energold has proven its ability to operate in difficult geological conditions. An example of this is at a leading Iron Ore project in West Africa.

"The recent Nimba project in Guinea provided some very tricky, difficult ground conditions but historically we've always had a reputation for obtaining core samples in difficult formations and our experience allowed us to succeed on this project where up to four rigs were deployed during 2012. We have found ourselves on tricky jobs where other contractors simply can't perform and that is part of our specialised service offering."

Africa is an important market for the Group and Energold has pretty much seen it all. In its time it has worked in Sierra Leone, Liberia and the Democratic Republic of Congo – all countries who've experienced difficult geopolitical situations.

How does it maintain a working business model and reliable sources despite geopolitical tensions? "It's challenging, let's say that," says Mr. Thomas. "Our model is to establish a local office and support structure, we develop local teams in most of the countries we operate in and have many local staff members in our Africa operations, many who have worked with the EMEA division management for more than 10 years, including drillers, local supervisors, drivers, mechanics and administration staff. The operations are all overseen from the UK EMEA divisional office and members of the UK management team make regular visits to all operations to review operations and liaise with clients and drill crews alike. Before moving into Africa, the EMEA management were involved in many UK and European projects, including Northern Ireland during the troubles there, and so have experience of working in areas with challenging politics and are familiar with overcoming the challenges that different countries might present but it all becomes normal, to be quite honest."

Energold's EMEA division utilises the local knowledge it has gained and keeps close tabs on operations with daily reports by phone call, SMS and email, as local conditions allow, to all its operations around the world. "It's a constant process monitoring the site and this level of communications ensures a steady and reliable information flow so we can ensure operations are running smoothly and the highest level of client satisfaction," Mr Thomas concludes.

To learn more visit www.energold.com.