London-listed Capital Limited delivered a pleasing performance across all business divisions for the half-year ended June 30, CEO Peter Stokes says, highlighting the announcement during the period of a second significant mining services contract, “fortifying our position as a full-service provider to the mining industry”.

Capital secured a major earthmoving and crushing services contract with Ivindo Iron SA with a term of up to five years. The site, located in Gabon's northeast, is one of the world's largest undeveloped, high-grade hematite iron-ore deposits.

Operations are already under way and, once fully operational, the contract is expected to generate yearly revenue of about $30-million.

“This strategic move, combined with our efforts in strengthening our drilling business and enhancing MSALABS, sets us on a trajectory of continued growth and success in the years to come,” Stokes acclaims.

“It was pleasing to add world-class gold and non-gold drilling contracts in the first half of this year, namely Ivindo, in Gabon, and Barrick Gold's Reko Diq copper/gold project, in Pakistan, both of which show tremendous growth potential.”

Similarly, Stokes says the mining business has also achieved a significant milestone with the addition of a major mining services and crushing contract with Ivindo.

“This showcases both our trusted reputation to offer a premium service to a world-class mining company and also our continued strategy to diversify our revenue stream through an expanded service offering,” he posits.

He adds that MSALABS continues to forge ahead on “an impressive multi-year growth trajectory”, fuelled by the successful rollout of Chrysos PhotonAssay units, in conjunction with its traditional geochemistry business.

“MSALABS proudly now operates the largest international network of PhotonAssay technology, extending its reach across Africa and Canada and our commitment to deploying 21 Chrysos PhotonAssay units by 2025 remains steadfast, driving revenues for the business in excess of $80-million,” Stokes highlights.

He adds that the successful equity raise during the period under review has provided a robust foundation as the company continues to expand its global footprint.

MSALABS has completed a $10-million equity raise to fund the expansion of the business. Following this, Capital’s shareholding in MSALABS has increased from 77.8% to 81.8%.

“Despite temporary operational disruption through the period, namely at the Meyas Sand gold project, in Sudan, the underlying demand from our customers continues to remain strong and we remain confident in our revenue guidance for 2023 of $320-million to $340-million,” Stokes says.

Capital Drilling’s average rig use for the period was 75%, a decrease of 9.6%, with the decrease in part driven by the temporary shutdown of rigs at Perseus' Meyas Sand project following the escalation of conflict in Sudan.

“We remain active in tendering across the business, with our capital allocation strategy biased towards returns and not a singular business division,” Stokes avers.

Given the strength in the business, Capital has announced an interim dividend of $0.013 apiece.

Revenue for the period was $154.3-million, up 11.7% year-on-year. Earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 10% year-on-year to $43.9-million.

Net gains from equity investments amounted to $800 000. Alongside cash investments carried out over the period, the value of the group strategic investments increased to $42.1-million from $38.7-million at December 31, 2022.

Net profit after tax was $16.8-million, a decrease of 15.6% year-on-year.

Nevertheless, Capital has left its revenue guidance for the full year unchanged.

Ebitda margins are expected to remain in a range of 25% to 30% going forward.

Capital expenditure guidance for the full year is guided at $65-million to $75-million. This has increased by about $15-million from previous guidance to include additional equipment for the new mining and crushing services contract at Ivindo Iron.

Capital Drilling expects to record revenue growth in the second half of the year, driven by the ramp-up of the high-quality Reko Diq and Ivindo contracts, together with a potential restart of operations at the Meyas Sand project.

Capital Mining also expects to report revenue growth through the second half, driven by the mining services and crushing contract at Ivindo, which has now started. Additionally, the company expects the Sukari earthmoving contract, in Egypt, to sustain steady performance throughout the rest of the year.

MSALABS will continue its multi-year laboratory roll-out, particularly focused on Chrysos PhotonAssay units, with revenue guidance for MSALABS remaining at $40-million to $50-million for the full year.

Tendering activity is said to remain robust across the group, with a number of opportunities progressing.