Canadian contract driller and lightweight exploration drill manufacturer, Energold Drilling, has acquired diversified drill manufacturer Dando of the U.K.

LONDON – 

Canada’s Energold Drilling Corp. which specialises in contract drilling coupled with the manufacture and operation of its own lightweight semi-portable exploration diamond drill rigs has acquired the shares and taken over the business operations of Dando Drilling International, based on the U.K.’s south coast. Energold has picked up the U.K drill manufacturer for a token £50,000 (US$80,000) and will assume £560,000 (US$896,000) of creditor debt and transaction costs, payable over three years.

Dando has a long and proven track record of profitably designing and manufacturing specialty/customized drilling rigs and associated equipment for water well, mineral exploration and geotechnical drilling companies operating worldwide. Dando has also supplied water well drilling services to many international institutions.  Currently, according to Energold, Dando has existing contracts to build and deliver 17 rigs plus additional parts and supplies valued at approximately £6.7 ($10.7) million to solid creditworthy institutions and another three contracts valued at £1.1 ($1.76) million in negotiation to be shipped to locations around the world.

Energold reckons to retain key employees and provide stock and/or stock options incentive compensation in Energold that collectively consists of restricted shares (C$160,000) and 150,000 share options priced at market (C$4.19 per share). With the acquisition of Dando, the Energold Group will have a staff of 30 comprised of senior management, engineers, administrative and hourly production employees.

Energold’s says its strategic objective is to profitably expand Dando’s core business; source additional rigs to broaden Energold’s scope of services to selected customers in appropriate geographic regions; work with Dando’s team of engineers to develop and supply the next generation drilling rigs for Energold, and capitalise on Dando extensive experience and expertise to broaden Energold’s product line and build a separate water well drilling services division for the company.

It will be interesting to see how Energold fares in this venture into a much broader range of drills and drilling services, much of which is outside the company’s current core geographical sales area.  Energold rigs are finding increasing use in exploration in difficult to access areas and it has recently built its 100^th rig – but the Dando range is a substantial departure from this core business.  But Energold’s current focus on contract drilling, coupled with rig manufacture, may well give a boost to what has been an extremely difficult period for many European-based diversified drill manufacturers.

Energold has a reputation for being quick on its feet, coming out of the highly entrepreneurial Vancouver mining and exploration sector and indeed the company shares much of its management and administration with Impact Silver, which is mining and exploring a huge land area in central Mexico.  Energold holds 6.8 million shares in Impact (a little over 10%) and Fred Davidson, Energold’s President and CEO also holds the same position with Impact.  Fred has a strong reputation for getting extremely good value for money out his companies – something which perhaps would be a major benefit if this can be applied also to Dando.  One suspects we will see a streamlining of Dando’s range and the additional manufacturing capacity will be potentially of strong benefit to Energold in attacking new markets with its own rigs as well as those of Dando.