Issue link: http://resourceworld.uberflip.com/i/1037672
O C T O B E R / N O V E M B E R 2 0 1 8 www.resourceworld.com 61 MININGWORLD cost for our clients. Versatility is a tremen- dous advantage – in Brazil, we moved rigs in with a fixed-wing Cessna. The heaviest weight that a Cessna can carry is about a 45-gallon drum of oil which is about the same weight as our principle parts. So we supported the whole program, including bringing the rig in and all the supplies with the Cessna." Energold manufactures the rigs them - selves. They have a factory in the UK where the larger rigs are built; the smaller rigs are made in Mexico and Canada. "When we first started out, virtually nobody made them," said Davidson. "We literally had to sell the idea to the industry. I can remember one of my now lead drillers called it a sewing machine. It's not big, it's not substantial, and it's not being pulled in by a D6 Cat or large truck which often gets locals angry as you're ruining their trails and farms. However, once you get all the modular pieces assembled together, we generate similar performance and horse - power as standard drilling rigs. End of the day, we help clients put more of their dol- lars into the drilling for results rather than getting rigs on site. In the process, we also keep a focus on social relations and envi- ronments due to our small footprint". According to Davidson, the modular rigs can get down to 1,000 metres. Attesting to the modular drills flex- ibility, Davidson described how Energold handled drilling in an environmen- tally sensitive area. "In a forest in the Dominican Republic, where we were not allowed to cut any trees on a hill, we liter- ally built the drill platform on stilts with a couple of trees coming through it. Because the rig is in individual parts, we were able to put the engines on one side of a tree and the actual rig itself on the other side of the tree and run the hydraulic connec - tions between them. The control panel was around a third tree." Though the modular drill is primarily used for exploration drilling, if the holes to be drilled are relatively shallow (500 to 600 metres) they can be used at devel - oped mines. Davidson explains, "We have mounted them on trailers and tracks and they can be taken off those trailers and tracks readily, and they can be put back on. That allows us to move them very quickly. We have competed in a couple of open pits with conventional track mounted rigs and we've beat them. When you take a trailer-mounted drill rig and pull it with just a pickup truck, it's not a very obstruc - tive kind of thing. So if someone is actually mining in an open pit, in many cases, we don't even occupy the whole bench and they can keep on using the bench." Davidson describes Energold's drills as simple and reliable. "A drill takes a lot of abuse," he noted. "In many cases the drill - ers may be standing in rain for weeks at a time. They are swamping around in mud, tired and grumpy. We try to feed them well, but you just can't get around that they are in a remote location and quite isolated. You don't want to give them an excuse to just give it up because the rig breaks down; you want to have something they can trust. "Drillers make their money drilling; if the machine breaks down they don't make their money. You want to give them something reliable and relatively simple to operate and keep clean." If the drill does break down, Davidson said, "You can fly in with a Cessna, pick up the part, take it out and bring it back the next day and replace it. You don't need a helicopter which can get expensive." When asked about adopting tech - nologies such as autonomous drilling, Davidson explained that, "We looked at that. The advantage that we have got right now is that we are using small rigs in pri- marily developing countries. So the labour costs are cheaper than they would be with the autonomous rigs. We believe in simple and robust. When you are in a remote area, it could take three days to get in to the site where we are working. If something breaks on an autonomous rig you are down for weeks. In our case, a lot of our rigs can be repaired by going to a local hardware sup - plier. So the idea is, (the drill rigs are) very robust and very simple to operate. That allows us to work in remote locations with- out the downtime that would normally accompany a more exotic rig." One project, in North Kevo State, in the DRC, was in fact in a war zone. If they had wanted to replace anything there it would have been literally weeks to get out and to get in again. Basically, a driller with a bit of mechanical skill for the most part, can keep our rig going through improvisation. Davidson did say that, "Autonomous rigs, certainly at a developed mine site with excellent infrastructure, would be practical. I think they are definitely what are coming." Energold has, however, made some unique products. Davidson said, "We have actually developed our standard rig which we innovatively call the "S" Rig, (for stan - dard). It does diamond drilling but we have made it so that it converts over to an RC rig and it does shallow RC drilling as well." To counter the cyclical nature of the resource industry, Energold bought a com - pany that does drilling in the oil sands and seismic work in Alberta. Davidson said, we diversified but are still trying to keep within the commodity sectors basically using the same logistics and sometimes different rigs but similar crews. As well, Energold acquired a company that does HDD (horizontal directional drilling) pri - marily for infrastructure underneath roads, putting in pipelines, microfiber, etc which, again, uses much of the same logistics and crews. Energold is also providing water wells or well dewatering services for the oil industry and does geotechnical work and geothermal drilling using the same rigs and the same crews. In 2018, over 50% of Energold's revenue will come from non-mining business such as geothermal, infrastructure, energy, and geotechnical drilling. Earlier in 2018, Energold won nearly $24 million in geothermal contracts around North America. As of June 2018, Energold has 54.7 mil - lion shares outstanding, 64.8 million fully diluted with a market cap of $23 million and working capital of $57.5 million. n LEFT: Helicopter dropping supplies and toolings for operating drill rigs in Mexico. Photo courtesy of Energold Drilling Corp.