Leaders in Environmental and Social Responsibility

Energold Drilling

Internationally recognized for not only its innovative portable drill rigs which help to greatly lessen the impact of exploration, oil and gas, water, mineral, seismic, geotechnical and other drilling activities on the environment, Energold is also acclaimed for its many carefully planned philanthropic efforts, and for helping to make the planet a better place for those in need.

“The reason we focus on the smaller rigs has a lot to do with issues of exploration, in Developing Nations especially,” explains Fred Davidson, President and Chief Executive Officer at Energold (EGD:TSX-V). “We find that our environmental footprint is virtually zero, and the social impact is huge, because rather than using automated equipment – which is typical in Developed Nations because labour costs are high – we are working in markets where labour costs are low. And we find that employing the locals, rather than having automated equipment, gives us a lot of goodwill.”

With about 260 drill rigs, Energold is actively working in anywhere from 20 to 26 countries at any one time, many of them in the Developing Nations, where resources are limited but the potential for manpower is tremendous. As a result, Energold is able to take people willing to work, provide them with training, and give them skills to last a lifetime. A large part of the company’s ongoing success comes from working with local people and utilizing drill equipment which is not only easily transportable, but very simple to repair due to its modular design. “If we are working in places which use automated equipment, the likelihood of a breakdown is quite high, and to get parts into some of these places could take three, four, even five weeks,” Mr. Davidson explains. “By having a very simple piece of equipment, it doesn’t break down as readily; a lot of it can be repaired on site. The modular nature of our rigs is very repair friendly and based on plug-and-play, eliminating even the need for a mechanic on site. In doing so, we train the locals on basic mechanics, and we can employ locals as 95 percent of the crew.”

Innovative Drill Rigs

As a leading global specialty drilling services company, Energold serves a variety of sectors, including mining, oil and gas across North America, South America, Africa, and Asia. A recognized industry leader in environmental initiatives, training programs, health, and safety, Energold works with major, intermediate, and junior mining companies on a range of projects. Continually investing in technology, the company is pleased to provide a range of drilling services including mineral drilling; oil sands, seismic and geothermal drilling; and customized mineral and water well rig manufacturing products and services. Working on a wide range of drilling projects – from early-stage reconnaissance drilling to resource definition, advanced stage programs, rig manufacturing products and services such as multipurpose mineral drilling rigs and water well rigs and post-service parts and supplies. Despite its diversified business today, Energold originally started off as an exploration company.

Soon, the company realized that the drilling industry was sorely lacking in its approach, particularly when it came to respecting the environment. About 15 years ago, Energold realized a change was needed in how drilling was conducted worldwide. Working in conjunction with others, the company developed and marketed the concept of modular drill rigs. Using its own drillers, Energold is behind a range of unique, compact drill units which, unlike much larger drills, leave behind a very small environmental footprint. Powered by diesel, except for underground drills which use electricity, the units have many advantages over larger products, particularly in Developing Nations where infrastructure such as power lines and road access is poor but labour is readily available. Instead of old fashioned methods of accessing sites which includes cutting down trees and creating roads, Energold’s drill rigs can be easily disassembled, carried in by locals in pieces, and reassembled on site, with drill programs then taking place. In addition to their small environmental footprint, ease of assembly, and compact size, the company’s modular rigs have yet another advantage: they can be shipped worldwide in a 20-foot container, complete with all supplies, for a very reasonable cost.

Initially, drill rigs were designed for depths of about 75 metres. In the past decade and a half, dramatic technological improvements have seen the development of rigs able to go to depths of 1,200 metres or more. Part of the reason behind the push for smaller and better drill rigs, says Mr. Davidson, was the Global Financial Crisis (GFC) of 2008, which saw significant downturns in businesses worldwide, particularly in the mining and exploration sectors. “After the GFC meltdown, we revised our strategy and decided that we were drillers, not just necessarily drilling in frontier environments,” he comments. “We then went into energy and water drilling, as well as manufacturing bigger rigs for ourselves and third parties.”

To further its commitment to its many clients, the environment, and the countries in which it operates, Energold has spent several years implementing its strategic goals to further its reputation as a leading worldwide specialty driller. In recent years, the company has successfully completed three acquisitions, namely Envirodrill Ltd. (U.K.), Dando International Ltd. (U.K.), and Bertram International Corp. (AB). As a result, the company has considerably expanded its international footprint along with diversifying its service offerings, providing mineral drilling, oil sands drilling, and drilling rig manufacturing services to a diverse clientele. Dando, a U.K.-based company, had been building rigs and conducting water drilling for about 150 years when it was acquired by Energold, which turned the former company around. “When we took them over, they were doing about $6 million in revenue; now they’re doing about $23 million in revenue per year,” says Mr. Davidson of the company, which offers superior engineering and manufacturing capabilities with well recognized clientele including the World Bank and United Nations.

Mining, Minerals, Water, and More

At present, about 40 percent of Energold’s fleet of approximately 260 drill rigs is focused on the energy side, with 60 percent devoted to the water and minerals side of the business. Drilling in numerous countries, in all sorts of weather, Energold is active on oil sands and other projects in Canada, and is active in Mexico, Africa, the United States, South America, Asia, Central America, the Caribbean, and the Middle East.

With a modern and well-maintained fleet, the company’s highly portable drill rigs include diamond drills, a deep hole rig, highly mobile underground drilling rigs, reverse-circulation rigs (RC) and reverse-air-blast rigs (RAB). Many, like the multipurpose Dando Multitec 9000, are not only light but compact drilling rigs designed for use in mineral exploration, water borehole, geotechnical investigation and geothermal (GSHP) drilling projects, and are capable of performing numerous drilling techniques including diamond wireline, RC (Reverse Circulation), RAB (Rotary Air Blast), conventional mud, auger drilling and more, and are manufactured for the company under strict guidelines.

Active in numerous sectors, the company is also involved in providing oil sands coring, shot hole seismic and geothermal drilling services. Through Bertram, the business has grown to become one of the largest oil sands coring fleets in Canada’s Oil Sands. And with the acquisition of Dando Drilling International Limited in 2011, Energold offers a wealth of experience in the waterwell drilling sector, and is active in Africa and Third World nations drilling wells for potable water, and in other areas for mine pit de-watering, mine water supply, and mine hydrogeological characterization and well monitoring. No matter the location or the sector, Energold focuses on reliability, consistency, performance, and value for its clients.

“Our rigs, if they are properly maintained, virtually last forever,” states Mr. Davidson. “Since they are modular, when something breaks, you just pull out that module, put in a new module, and keep on drilling. Our oldest rig is about 15 years old, but there is not a part on it that is over two years old.” Although Energold maintains regional depots where the drills can be overhauled, in many cases this is not necessary, as many rigs are simply rebuilt in the field and sent off to another site.

Social Responsibility

Winning numerous awards and accolades over the years – including the Most Innovative Company in BC 2012 from BC Business, HSBC’s International Business Award 2013, the Ernst & Young Entrepreneur of the Year Award 2012 – Mining & Metals, and being cited by Profit magazine’s 100 List as one of Canada’s Fastest Growing Companies from 2009-2013 – many of the company’s honours come from the good work is does helping others in need. Placing as much weight on social responsibility as it does on doing good for the environment, Energold remains fully committed to these priorities in every country in which it operates. In addition to employing local labourers on drilling sites and providing them with skills and hands-on experience, two specific examples that reinforce Energold’s corporate social responsibility objectives include a joint initiative with a major mining company, and an Energold project. Completed in coalition with Newmont Mining Corp., the Haiti Bridge Project saw Energold step up and donate the materials necessary to construct towers for the bridge and main cable anchors, and the time to drill and install the anchors. No longer limited by access to the other side of the river, the community benefited through direct employment and infrastructure development. In other locations, such as in the Mexican State of Chihuahua, Energold donated four water wells within impoverished communities lacking water supply, with holes drilled to depths of over 80 metres, and installed with hand pumps.

“At any one time, we work in 22 to 26 countries, many of them Developing Nations,” says Mr. Davidson. “We realize that we can provide certain things.” As Energold works on multiple sites, and is only in one location for a limited time, the team will donate drilling services, materials, time and expertise in whatever way is most appropriate to the community. In some locations, the team will construct a water well if one is needed; in the Dominican Republic, the company provides schools and books. Energold has also donated mosquito netting to some West African towns, where there aren’t any teachers and no schools exist.

With a staff of about 1,700 during peak seasons, Energold Drilling Corp. is focused on a future for drilling which is kinder to the environment, improves the lives of local community members, and is innovative. For a number of years, the company has been active in early-stage seismic drilling, where a series of holes are drilled in a line, acoustic charges are set up at the bottom of the holes, and acoustic monitors pick up those charges and reflect what is happening at depth. In some areas, such as in northern Canada, this activity creates lines some four metres wide which can go on for kilometers. Through research and innovation, Energold is reducing the width of those lines to two metres. In the past, trees and vegetation had to be cut down, and drills moved by helicopter; Energold’s newest rig will be self-propelled. While it will be brought in by helicopter, the state-of-the-art rigs will move forward on their own and be able to navigate between trees, causing far less damage to the environment. “We think it will revolutionize the seismic drilling in North America,” says Mr. Davidson of the rig. “It’s one of the reasons we expanded, so we have those capabilities, and we’re starting to see the synergies of involving cross-culture, cross-business sector activities.”

Energold Drilling Corp. is on the right track for the future. “I think our strategy is right,” says the company’s CEO. “We have certainly outperformed our peer group. All of us have sustained losses on the mineral side, but in the first quarter, we are the only exception thanks to our diversification. Our strategy is right, but it is very much trying to get the synergies, and at the same time take what is a one-season mineral drilling up in northern Canada, four months a year, and try to get a second season out of it. And because we work in minerals and multiple countries around the world, there is an opportunity to try to expand our services,” he shares.

“It takes time, it takes a culture change, but we’re certainly convinced our strategy is right… in the next five years we expect to continue that strategy. We have water drilling, we have mineral drilling, we have energy drilling, and we have manufacturing. If mineral drilling comes back, we will push that; if energy stays strong, we will push that. It gives us a lot of flexibility where a less diverse company struggles in that environment. As one of the largest shareholders myself, I believe we will continue to do very well in the next five years.”

July 17, 2018, 7:29 AM EDT

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