Energold Announces 134,500 Metres Drilled in First Quarter 2012 and Record Quarterly Revenue of $53.7 Million


VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 30, 2012) - Energold Drilling Corp. (EGD.V - News) ("Energold" or "the Company" or "Energold Group") is pleased to announce strong revenue growth for the first quarter of 2012, with consolidated revenue of $53.3 million, a substantial increase of 134% over 2011's first quarter of $22.7 million. Net earnings were $0.9 million compared to $1.9 million in 2011 for the same period. These earnings are net of a $6.6 million earn-out bonus expense under the unique acquisition terms of Energold Energy Drilling Ltd. ("Bertram"), which is based on meeting and exceeding performance targets over the next three years.

Typically one of the slowest quarters of the year in the drilling cycle, the first quarter of 2012 confirmed that Energold's commitment to diversifying revenue streams into longer-term and counter-seasonal markets is working exceptionally well, as reflected in Bertram's strong performance. As business in Bertram continues to grow and, beyond 2014, when the buy-out bonus related to the acquisition is paid, the Company anticipates an even stronger bottom line. The order book and backlog also continue to increase for Energold's manufacturing division, further emphasizing Energold's strengthened revenue base.

In March 2012, Energold bolstered its financial position and increased working capital and cash balance with a bought financing of $20.3 million with TD Securities (News Release March 21, 2012), successfully positioning the Company as a growing and diversified market player in the global drilling and energy services industry. Working capital increased nearly 50% to $93.9 million from $63.8 million in 2011 for the same period, with a healthy cash reserve of $37.2 million, an increase of 66% from $22.4 million in 2011 for the same period, providing for further organic growth and opportunistic acquisitions.

         First Quarter Results Comparison: Consolidated Operations         

        (Canadian $000s except per-share amounts and meters drilled)       


                                             2012         2011     % Change



 Mineral                                   25,944       21,381         21.3

 Energy                                    25,453          N/A          N/A

 Manufacturing                              1,873        1,350         38.7


Total Revenue                              53,270       22,731        134.3


Earnings (Loss)                                                            

 Mineral                                    2,554        2,431          5.1

 Energy                                    (1,128)         N/A          N/A

 Manufacturing                               (534)        (575)         7.1


Total Earnings                                892(i)     1,856        (51.8)


Earnings Per Share                                                         

  - Basic                                    0.02         0.05             


  - Diluted                                  0.02         0.05             


Cash                                       37,215       22,398             


Working Capital                            93,905       63,803             


(i) Earnings are net of the $6.6 million earn-out bonus related to the   

    Bertram acquisition.                                                 


            Meters Drilled During the Quarter            


                        Q1 2012      Q1 2011     % Change


Metres Drilled          134,500      125,800         6.9%


Drill Rigs                  128          110        17.3%


In spite of muted demand from "Juniors" due to recent uncertainties in the market, Energold drilled 134,500 metres in the first quarter of 2012, an increase of 6.9% from the 125,800 metres in the comparable period in 2011. Revenues were $25.9 million, up 21.3 % for the same period in 2011 for mineral drilling services, with rates per meter averaging approximately $193 compared to $170 for the same period in 2011. Gross margins improved further to 32.1% from 28.6%, largely due to additional green field "frontier" jobs.

As of the end of March 2012, the Company had 128 mineral rigs with five rigs on order, two of which will be larger track-mounted rigs currently being built by the Company's manufacturing division, Dando, to service the West African market. The Company is currently scheduled to add between 15-20 rigs overall in 2012 to balance the current mix of mine site drilling projects with additional frontier work. Rig growth will be closely monitored and matched to global supply and demand for mineral exploration.

The strongest demand still currently comes from projects and clients in Mexico, Caribbean, and Central America with over 45 rigs in the area. Approximately 58% of the meters drilled this quarter in mineral drilling are attributed to this market. An additional 25% of the metres drilled are in South American countries such as Brazil, Colombia, Peru, Chile and Argentina, which currently have over 40 drill rigs with an additional rig under construction. While Peru has seen dramatic declines in recent years, the Company is optimistic about the country's long term resiliency and the future for this market.

West Africa remains the fastest growing region with 40 rigs currently on the continent with at least five additional rigs forecasted for the year. Only 17% of the metres drilled for the quarter come from this market, mainly due to delays in moving a number of new rigs into this market. Demand in West Africa requires some of our newer multi-purpose rigs, which are capable of both reverse circulation and diamond drilling.

The Company continues to source and seed new markets, including South East Asia.


    Meters Drilled During the Quarter        


Oil Sands coring                   35,600


Geothermal & geotechnical         318,600


Seismic                            82,200


The Company's Energy division, Bertram, was very active during the traditionally busiest season in the oil sands. The division achieved $25.5 million in revenues at gross margins of 35.2%, and completed over 436,400 meters from January 1, 2012 to March 31, 2012 with a total fleet of 118 drill rigs of various types. The Company's move into energy exploration was to diversify revenue into a high margin and underserved market.


The Company's manufacturing division, Dando, has continued to see positive growth and a turnaround quarter for the start of 2012. This division generated $1.9 million in revenue with the sale of consumables and a Mintec 40 by the end of March 2012, with 13 additional rigs under construction. With a current confirmed order book of GBP 8.0 million and strong enquiries for a further GBP 7 to GBP 10 million, Dando is on target to achieve a substantial increase in revenues and profits.

The Company will be reviewing its first quarter 2012 results via conference call at 11:30 am Eastern/8:30 am Pacific, Thursday, May 30, 2012. The dial in numbers are 1-866-782-8903 or 647-426-1845. Management will be discussing the Company's financial report and operational results with a question-and-answer period after. Investors are encouraged to forward any questions and comments to info@energold.com. For those who cannot attend the conference call, the recorded conference call and past calls can be accessed on our archives on May 31, 2012, http://www.energold.com/s/ConferenceCalls.asp

Energold Drilling Corp. is a leading global specialty drilling company that services the mining and energy, and manufacturing sectors in 22 countries globally. Specializing in a socially and environmentally sensitive approach to drilling, Energold provides a comprehensive range of drilling services from early stage exploration to mine site operations for both metals and energy in addition to its established drill rig manufacturer, Dando. Energold also holds 6.98 million shares of IMPACT Silver Corp., a profitable silver producer in Mexico.

On behalf of the Directors of Energold Drilling Corp.,

Frederick W. Davidson, President, CEO

Forward-Looking Statements: Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to proposed activities, work programs and future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the effects of general economic conditions, a reduction in the demand for the Company's drilling services, the price of commodities, changing foreign exchange rates, actions by government authorities, the failure to find economically viable acquisition targets, title matters, environmental matters, reliance on key personnel, the ability for operational and other reasons to complete proposed activities and work programs, the need for additional financing and the timing and amount of expenditures. Energold Drilling Corp. does not assume the obligation to update any forward-looking statement.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Jerry Huang
Energold Drilling Corp.
Investor Relations Manager
(604) 681 9501
(604) 681 6813 (FAX)

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