Sacre-Coeur forms contract drilling division to raise cash internally

Sacre-Coeur Minerals (CVE:SCM) said Thursday it has established a contract drilling division, to which two of its three company-owned wireline core drills have been allocated, in a bid to raise cash.
The third Atlas Copco Exploration drill has been reserved to continue hard-rock gold exploration and resource expansion on the company's 850 square kilometre portfolio of properties in Guyana.
The move by Sacre Coeur is part of its strategy, along with the previously announced alluvial gold production, to fund its ongoing hard-rock gold exploration and feasibility studies, as well as to build working capital reserves entirely from internal cash flow.
"The company's in-house drilling program has enjoyed a very high level of performance and cost effectiveness over the past five years. This reputation for performance has resulted in high demand for the services of its contract drilling division," Sacre Coeur said in a statement.
Both drills are currently under contract with third party exploration companies working in Guyana, the company added.
Contract drilling demand is expected to remain strong in the coming months, Sacre Coeur said, ant the company expects the unit to be fully booked throughout 2012.
The company also said it expects combined net cash flow from its alluvial mining operations and contract drilling division to cover all operating costs. This includes ongoing hard-rock exploration, feasibility studies for development of a portion of its existing hard-rock gold resource, property holding costs, and corporate general and administrative costs, plus accumulation of additional working capital.
"We believe in this period of substantial global economic uncertainty, it makes sense for the company to tap its available capacity to generate working capital internally and to minimize its reliance on the capital market to continue to maintain its tight share structure," the company concluded.
Sacre Coeur explores properties for gold, metals and diamonds in South America, initially focusing on exploration and production of gold from its properties in Guyana.
The company holds a 100 percent interest in approximately 850 square kilometres of mineral properties in Guyana, including the Million Mountain property, which hosts an NI 43-101 compliant hard-rock resource of 12.12 million tonnes grading 1.0 grams per tonne (g/t) of gold measured, and 2.18 million tonnes grading 0.9 g/t gold indicated for a total of 451,000 troy ounces of gold combined.
In early October, Sacre-Coeur announced that it found significant sulphide mineralization in initial drill testing of targets at its Million Mountain propery in north central Guyana, confirming IP anomalies generated by a ground survey. Hole 18911 encountered several narrow veins showing significant gold values, including 0.30 meters grading 49.2 grams per tonne (g/t) of gold, and 0.33 meters grading 20.0 g/t gold.