Frederick Davidson
President & CEO
Energold Drilling
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View from the Top

Jointly Funding Drilling Programs

Wed, 10/19/2016 - 14:37

Q: How has Energold helped its mining clients overcome adverse market conditions and develop successful projects?

A: As one of the largest drilling players in Mexico we are currently focusing on brownfield work. Energold is venturing into underground drilling and is developing new capacities for what is commonly known as a diamond driller, and it now has the capacity to carry out RC drilling and open-hole drilling.

We are still able to provide information to the client at approximately 60 percent of the cost of diamond drilling. Clients are recognizing the advantages as they do not have enough funds for full scope projects and are opting to reduce the size of their programs. When projects are prolonged we can make a large margin as our crew has time to get accustomed to the program and operations in the area. We can help fund a program, meaning that if we are recruited to drill 700m we can fund the other 300m to reach 1,000m, making the drilling process more efficient. We try to always develop economies of scale whenever possible since most of our clients are no longer junior companies but are now seasoned production companies.

Q What key R&D initiatives in core product offerings has Energold Drilling implemented?

A: We have developed highly portable S3 Rigs that come equipped with a kit and air compressor that allows for RC drilling. We developed this particular rig in Argentina and this equipment allows for remote and low cost drilling. When carrying out RC drilling, as the drill perforates downward and pumps air the chips of the destroyed rocks are blown up to the surface and collected in a sequence cyclone. When drilling open holes it can be even cheaper since the chips are not collected but rather scattered around the area. This can be beneficial for those that are looking for galena. Once this is identified expansive drilling can be applied.

Generally, our R&D initiatives focus on geotechnical work related to mining, such as dewatering wells and geotechnical services for tailing dams. The latter for the most part are well engineered but any prudent mine manager will make sure samples are taken to prevent any accidents. Many of our clients are required by their shareholders to conduct geotechnical surveys. We also carry out dewatering in wells because many mines may encounter water inflows that could potentially be dangerous. Since 2011, Energold has diversified its activities and has been venturing into new sectors like oil and gas, geothermal, and infrastructure.

Q: What benefits has Energold identified in diversifying its activities and service portfolio in the mining sector?

A: In 2011, 100 percent of our revenue stemmed from mining drilling and through concentrated efforts to diversify, this figure dropped to 30 percent in 2013. The remaining 70 percent entails drilling across a wide array of sectors from energy and geothermal, to water and infrastructure. If we had not diversified we would not been able to retain our human capital. We continue to focus on mineral drilling but we also provide additional services. By carrying out more projects across different sectors we are able to retain the staff and improve their technical experience. We are able to integrate these services into one project and clients appreciate this flexibility.

Q: How can you protect scarce resources like water and reduce your environmental footprint?

A: The S-series rigs are modular, which means there is no need to create new roads or remove trees to gain access. The rigs can be taken apart and connected with hydraulic hoses, which reduces our environmental footprint. We do not use toxic additives and they are all screened prior to their implementation. We have also designed a new rig that can be remotely controlled and it can drive through the landscape and has minimal impact on the flora. This rig entailed a US$1 million investment in R&D.