Geodrill maintains golden run

The shares are up to their highest levels in more than a decade

West Africa gold driller Geodrill has reported FY22 EBITDA of US$38.4 million and an EBITDA margin of 28% on record revenue of $138.6 million and says demand for drilling services has grown in 2023.

“The significant growth in our financial metrics does not truly reflect the real and growing momentum that we are continuing to experience on the ground,” Geodrill CEO and major shareholder Dave Harper said this week.

“Operationally, not only have we been able to both expand our drill rig fleet count to 76, we have also been able to expand well beyond the borders of our stronghold in West Africa.”

Geodrill started its first contract in Chile in December and is also working in Peru, adding copper and zinc exposure. However, it says about 95% of client drilling is for gold, which sold at an average US$1800/ounce in 2022 and continues to drive revenue growth.

Revenue was up 20% year-on-year in FY22; EBITDA climbed 30% yoy and the 28% margin compared with 26% the previous year. Net income for FY22 was $18.9 million. Net income per share was 41c versus 31c in FY21.

The company is paying a C4c-a-share “semi-annual” dividend.

Rig utilisation was at about 70% in the December quarter, at the end of which Geodrill had a fleet of 76 drill rigs plus four rented units.

The company says its FY22 return on capital employed (ROCE) was 25%, and return on equity (ROE), 18%.

It ended the period with net cash of US$9.8 million.

Toronto-listed Geodrill’s share price was up more than 8% Monday at C$3.15, capitalising the company at circa-$148 million.

The shares are up more than 20% so far in 2023 to their highest levels in more than a decade.


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