Capital Limited (LON:CAPD) raised its revenue estimate for the current year after a record second quarter driven by a resurgence in gold exploration activity in West Africa.
The mining drill fleet operator now expects revenues for the year to end December 2021 to be between US$200-210mln, against previous guidance of US$185-195mln.
Second-quarter revenues jumped 68% to US$54.7mln from US$32.6mln a year earlier and US$44mln in the preceding three months, with fleet utilisation rising to 79% from 58%.
Average monthly revenue per operating rig was steady over the quarter at US$180,000 compared to the previous quarter and reflecting long term contracts, said the group.
Over the first six months of 2021, revenues rose by 52% to US$98.7mln.
Going forward, Capital said demand for drilling services is good, which should keep utilisation rates high during the second half of 2021.
“Gold continues to trade at near decade long highs, which is supportive of further increases to capex and exploration budgets across the mining industry - a strong tailwind for Capital with c.90% of revenue exposed to the African gold mining sector,” the statement said.
At Sukari in Egypt, where it is working for Centamin PLC (LON:CTY), Capital said earthmoving works continue to ramp up in line with expectations and guidance for full operating run rate remains the fourth quarter of this year.
Reflecting the Sukari ramp-up, net debt at the end of June was US$33.6mln.