In Tuesday’s update the company revealed a 6.1% increase in quarter-on-quarter revenue as it released a Q3 update and told investors it is trading in-line with expectations.
The rig contractor, in a statement, said it is “well on track” to hit full-year revenue guidance of US$110mln to US$120mln.
It highlighted that increasing activity is expected through the remainder of this year which will see revenues further increase in the fourth quarter.
Capital Drilling chief executive Jamie Boyton commented: "In the first nine months of 2019 Capital Drilling has positioned itself for further growth, which is now bearing fruit with strong exploration contracting and mobilisation activity and, as recently announced, broadening our service offering with the award of our first comprehensive mining services contract with Allied Gold Corp at their Bonikro gold project.
A busier fourth quarter
In the trading update, Capital Drilling noted that it has a strong pipeline of work including three new exploration contracts commencing in the fourth quarter - for Mali Lithium (in Mali), Perseus Mining (in Côte d'Ivoire) and Tanga Resources (Namibia).
It is also starting work on seven previously announced contracts - Allied Gold Corp (Côte d'Ivoire), Arrow Minerals (Burkina Faso), Awale Resources (Côte d'Ivoire), Compass Gold Corp (Mali), Desert Gold Ventures (Mali), Golden Rim Resources (Burkina Faso) and Thor Explorations Ltd (Nigeria).
Meanwhile operations continue under long term site contracts such as its deals with Centamin, at the Sukari mine, and AngloGold Ashanti’s Geita mine in Tanzania, Capital Drilling said.
City analyst sees “very healthy year”
Peel Hunt’s Peter Mallin-Jones, in a note, repeated a ‘buy’ recommendation and a 76p price target which implies some 19% upside to the current price.
“2019 is shaping up to be a very healthy year for Capital Drilling – the team has added 12 new contract wins this year,” the analyst said.
“Two of these expand the team’s service offering. Laboratory services are provided at Tasiast and much more excitingly load and haul services as part of the recently announced Bonikro contract.
“We think these wins, and the resurgence of activity levels following the gold price move will more than offset the small revenue miss following the temporary reduction in activities at North Mara.”
On AIM, Capital Drilling shares were up 0.39% changing hands at 63.74p.