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Energold: 2012 And Beyond

23.02.12

Business Overview

Energold originally developed its niche by focusing on drilling technologies that are less environmentally damaging than those technologies currently in use. The desire to cater towards a more environmentally sustainabl e and socially responsible mandate by mining corporations turned into a research and development project resulting in drilling rigs that are sectioned into components and transported by human labor to specified locations. Demand for the company’s product started to unfold, and Energold began to align core operations around designing, manufacturing, and contracting specialized drilling rigs and associated components in the mineral exploration industry.

This modular component, man portable rig technology created two very significant advantages for Energold. First, the company could focus on the niche market of “frontier” exploration drilling. Frontier drilling includes drilling in remote areas where access is difficult or impossible for traditional drilling due to lack of infrastructure or social and environment issues; this segment of the drilling and exploration market often commands higher pricing and margins, and is thus inherently more profitable than other segments. Second, these smaller, transportable rigs allow Energold to avoid high transportation costs associated with more conventional rigs that are moved by air or truck and require the construction of roads and bridges to gain access to drilling sites. Instead, Energold puts its rigs together on site and employs local capital, significantly reducing the costs of labor and transportation while benefiting local communities. Higher pricing in the frontier markets, coupled with lower costs has made Energold a highly profitable business with some of the highest margins in its industry.

Source: Seeking Alpha