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Capital Drilling encouraged by pick up in West African activity

New projects also included work for De Beers in Botswana and for Hummingbird in Mali
drill rig
Capital has started its first exploration contract in Tanzania for two years

Africa-focused mining contractor Capital Drilling Limited (LON:CAPD) saw another uptick in activity in its latest quarter as exploration picked up.

Capital Drilling has just started work on its first exploration contract in Tanzania for two years (for Graphex), which helped fleet utilisation rise to 53%.

New projects also included work for De Beers in Botswana and for Hummingbird in Mali.

Revenues in the three months to September rose by 12% to US$31mln compared to the previous quarter and by 3% year-on-year.

Rig rates were flat US$198,000 per month on average.

Jamie Boyton, chief executive, said it has continued to switch resources to West Africa.

“The commencement of delineation drilling activities with Hummingbird Resources in Mali further adds to the Group's contracts in West Africa, with a third of our rig fleet now located in the region.

“As we enter the fourth quarter we remain optimistic for a solid performance for the year. Enquiry levels remain strong and we anticipate further contract wins as we emerge from the wet season in the key growth markets in West Africa".

The company ended the quarter with net cash of US$4.1mln.

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