Capital Q1 Earnings Call Highlights

Key Points

• Record Q1 revenue of $101.7 million, up 42% year‑on‑year, driven by Capital Drilling ($62.8m, +9%), a recovery in Capital Mining ($18m) and strong MSALABS growth (GBP 20.9m, +55%).
• Management reiterated full‑year guidance of GBP 410–440m group revenue, MSALABS revenue of GBP 85–95m and CapEx of GBP 55–65m, while announcing several contract wins (Koné drilling and lab, new Newfoundland lab, second Sukari waste contract) and saying demand is the strongest in a decade as the market moves toward supply constraint.
• Capital’s investment arm has delivered a cumulative return of over 60% since 2019, and the group trades at about 2.8x EV/EBITDA including the investment portfolio (or 3.7x excluding it), per management.

Capital LON: CAPD management highlighted a “record quarter” and reiterated full-year guidance during its first-quarter trading update call, pointing to strong demand across its drilling, mining and laboratory businesses as well as a supportive gold-led macro backdrop.

Record first-quarter revenue led by mining and laboratory growth

Management said group headline revenue for the first quarter came in at $101.7 million, up 42% versus the first quarter of the prior year, calling it a record quarter for the group.

Breaking down performance by operating segment, the company reported:

• Capital Drilling revenue of $62.8 million, representing 9% growth.
• Capital Mining revenue of $18 million, described as coming off “almost a negligible base” in the prior-year quarter.
• MSALABS revenue of GBP 20.9 million, up 55% year over year.

Management described 2025 as a “transition year,” citing the cessation of two mining contracts in the fourth quarter of 2024. The company said growth resumed as mining revenue returned, including the start of one of its current mining contracts in the second quarter of last year and, more recently, the start of a second mining contract at the Sukari Gold Mine.

On Sukari, the operator said it is the second time Capital has been contracted at the site, having worked there from January 2021 through 2024 and now being “recontracted to do another waste stripping operation.” Management said the combination of the two mining contracts and continued growth in MSALABS helped drive the record quarter.

Business overview: drilling, mining, labs and investments

Management noted Capital operates three core businesses: Capital Drilling, Capital Mining and MSALABS. The drilling business, founded in 2005, operates a fleet of about 137 rigs across Africa, the Middle East and North America, providing services from exploration through production. Capital Mining began in 2019 and scaled in 2020, focusing on load-and-haul and currently operating two contracts, “one in Egypt and one in Pakistan.”

MSALABS operates a network of laboratories across Africa, the Middle East and the Americas, totaling 33 laboratories at the time of the call. Management characterized the lab unit as “a very high growth business.”

In terms of mix, management said revenue is broadly split with about 60% from drilling, about 20% from mining, and about 20% from MSALABS. The company also discussed its investment arm, Capital DI, and an internal technology function, Capital Innovation, which it said has supported initiatives including MSALABS and PhotonAssay technology.

Capital DI portfolio and valuation discussion

Management said the Capital DI portfolio was “down marginally” at March 31 compared with December 31, 2025, attributing the move to broader equity market impacts “by the activities in the Middle East.” However, the company said the portfolio has generated a cumulative return of over 60% since investing began in 2019.

On valuation, management said Capital trades at about 2.8x EV/EBITDA on a blended basis “with our investment portfolio,” based on consensus for fiscal 2026. During Q&A, Ryan Tennis, Manager of Corporate Development and Investor Relations, said EV/EBITDA is 3.7x when stripping out the investment portfolio.

Discussing strategy for the investments, management said it typically invests earlier stage than many resource funds, using its on-the-ground network and geology expertise to identify opportunities. The operator described a concentrated portfolio dominated by “Weir and Asara,” saying Weir is in a DFS stage and Asara is viewed as having potential for a “substantive increase” in resource. Management said its current stance is to hold positions because it sees “substantial upside.”

Guidance reiterated; contract wins and demand commentary

Management reiterated prior guidance for group revenue of GBP 410 million to GBP 440 million, stating that first-quarter results put the company on track. For MSALABS, management reiterated revenue guidance of GBP 85 million to GBP 95 million (compared with about GBP 73 million last year, as referenced on the call) and guided capital expenditures of GBP 55 million to GBP 65 million.

The company also highlighted several announced contract awards and developments across its operating businesses, including:

• A five-year grade control drilling contract at the Koné Mine in Côte d’Ivoire with Montage.
• A laboratory contract with Montage at the Koné Mine in Côte d’Ivoire.
• A new lab build in Newfoundland, “underpinned by Equinox in Canada,” which management said has now started receiving samples.
• A second waste mining contract with AngloGold Ashanti at the Sukari Gold Mine in Egypt.

Management said demand is “as strong as we have seen it in the past decade,” with increased inquiries across business units. The operator added that the company is “starting to see…some rate increases” as demand absorbs what had been an oversupplied market, and said the company believes it is “moving into a supply constrained market.” Management linked that view to the company’s decision to raise capital late last year to increase capacity to purchase equipment and meet anticipated demand.

Q&A: fuel costs, Reko Diq operations, and Mali exposure

In response to a question from Ryan Tennis about higher fuel prices, the operator said the impact is “negligible,” noting fuel is less than 1% of revenue and that in the “absolute majority” of contracts, clients pay for fuel. The operator added that travel costs rose slightly due to rerouting but said the increase is “pretty insignificant” and not impacting earnings.

Asked about operations at Reko Diq, management said it has been operating the mining contract since the second quarter of last year and also performs water bore activities and some exploration drilling. The operator said there has been “no impact” on performance versus tender and budget and that it is “performing…well in line with our expectations.” Management noted security protocols have had minimal operational impact and said a previously announced contract variation increased scope. The operator added the contract appears “a bit larger” than initially anticipated, likely reflecting a longer duration rather than higher monthly value.

On the conflict in Mali, management said the impact is “very small,” with only “one residual drilling job” due to wind down on April 30. The operator said the company has been redeploying assets regionally in West Africa and that revenue, people and asset exposure to Mali is “very, very low.” Management suggested perceived exposure could be a factor in recent share price weakness and added that during years of more substantive operations in Mali, the company had “very little impact on operations.”

About Capital LON: CAPD

Capital Limited is a leading mining services company providing a complete range of drilling, mining, maintenance and geochemical laboratory solutions to customers within the global minerals industry. The Company's services include exploration, delineation and production drilling; load and haul services; maintenance; and geochemical analysis. The Group's corporate headquarters are in the United Kingdom and it has established operations in Côte d'Ivoire, Canada, Democratic Republic of Congo, Egypt, Gabon, Ghana, Guinea, Kenya, Mali, Mauritania, Nigeria, Pakistan, Saudi Arabia, Tanzania and United States of America. Our brands include Capital Drilling, Capital Mining, MSALABS and Well Force International. Capital Drilling provides a complete range of drilling solutions for projects across the mining cycle from exploration to production. Capital Mining provides Load and Haul services for clients from development to fully operational mine sites. MSALABS are a global provider of geochemical laboratory services for the exploration and mining industries and have an exclusive agreement with Chrysos Corporation to deploy their revolutionary PhotonAssay technology globally.

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