# Capital Limited new contract award a strong endorsement of winning strategy

- Link: https://www.directorstalkinterviews.com/capital-limited-new-contract-award-a-strong-endorsement-of-winning-strategy/4121081011
- Published: 2022-09-06T07:35:39+01:00
- Author: Giles

**Capital Ltd** ([LON:CAPD](https://www.directorstalkinterviews.com/company/capital-drilling-ltd/capd.l)),
a leading mining services company has announced the award of a new drilling contract
and associated purchase of additional drill rigs and other capital equipment. 

·      **An expanded drilling services contract with B2Gold Corp. at the Fekola 
Gold Mine, Mali, out to the end of 2024.** Our services on site now include development(
diamond & reverse circulation) and grade control drilling. This follows our initial
drilling contract announced at the end of June 2022.

·      **Associated asset purchase:** To facilitate delivery of the new contract
Capital has purchased 10 rigs from African Mining Services (AMS), part of the Perenti
Group. In addition we have purchased associated equipment and staff accommodation.
These rigs are additional to the rig count increase for 2022 guided at our interim
results.

This contract is another example of Capital’s focus on large scale, long life and
low cost assets. B2Gold Corp. has guided Fekola to produce between 570,000 – 600,000
ounces of gold in 2022, making it amongst the largest gold mines in Africa.

·      **Guidance update:** As a result of the purchase of rigs and other assets
from AMS, capital expenditure is now expected to be approximately $60-65 million
in 2022 (from $50-55 million). Revenue guidance for calendar year 2022 remains $
280 – $290 million (recently upgraded from $270-280 million at the H122 results).

> **Commenting on the recent contract win, Jamie Boyton, Capital Limited Executive
> Chairman, said:**
> _‘We are pleased to be further expanding our service offering at the Fekola gold
> mine and building our relationship with B2Gold._
> _This new contract award is a strong endorsement of our strategy, not only of 
> expanding our service offering on mine sites with blue-chip customers, but also
> in repositioning the portfolio to long term contracts that are positioned to operate
> consistently through the cycle. We have been opportunistic in purchasing rigs 
> from AMS which allows us to more rapidly commence operations and as a result we
> are increasing our 2022 capex guidance to $60-65 million and our year end rig 
> count to ~130 rigs. Revenue guidance for this calendar year remains in line with
> our recently upgraded guidance of $280-290 million and we look forward to a strong
> contribution from the new contract in 2023 and 2024.’_

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