INVESTOR PRESENTATION 2018 |
WE ARE GEODRILLInvestor Presentation, TD Conference – January 2018
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INVESTOR PRESENTATION 2018 |
Forward Looking Statements
This presentation contains “forward-looking information” and “financial outlook” within themeaning of applicable Canadian securities laws and may contain forward lookinginformation attributed to third party industry sources. These statements and information arepredictions only and represent Geodrill’s expectations as of the date of this presentationand Geodrill does not undertake any obligation to update the forward looking information orfinancial outlook to reflect new information, subsequent events or otherwise. By theirnature, forward looking information and financial outlook involve numerous assumptions,known and unknown risks and uncertainties, both general and specific, that contribute tothe possibility that the predictions, forecasts, and projections made will not occur andactual events or results may differ materially from such predictions, forecasts, andprojections. Undue reliance should not be placed on such information as there can be noassurance that the plans, intentions or expectations upon which they are based will occur.
Forward-looking information is also based upon the assumption that none of the identifiedrisk factors that could cause actual results to differ materially from the forward-lookinginformation will occur. Accordingly, specific reference should be made to the risk factorsdescribed in the Annual Financial Statements available on SEDAR.
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INVESTOR PRESENTATION 2018 |
Corporate Data
MAJOR SHAREHOLDERS CAPITAL STRUCTURE
D. Harper 41.2% Symbol TSX-GEO
Sustainable capital 13.3 Shares Outstanding 42.5 M
Maxam Capital 9.9% Fully Diluted 45.5 M
Aegis Capital 8% 52 Week Range $2.82 - $1.70
AGF 3% IPO Date Dec 16, 2010
ANALYST COVERAGE IPO Price $2.00
Beacon Securities Cormark Securities Market Capitalization $90 M
Clarus Securities Paradigm Capital
TD Securities3
As at January 12, 2018
INVESTOR PRESENTATION 2018 |
Hard Core Drillers
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Mauritania
Senegal
Guinea
Mali
Niger
GhanaIvory Coast
SierraLeone
BurkinaFaso
GuineaBissau
Benin
Togo
WEST AFRICANPURE PLAY
25% CAGR
100% organic growth
INDUSTRY LEADING METRICS
Focused stronghold in mining rich area
Higher than industry average
EBITDA margin
58RIGS
1 to 58 rigssince inception; surface
and underground
INVESTOR PRESENTATION 2018 |
Positioned for growth
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HIGH PERFORMANCE RIG FLEET• Tier-1 rig fleet attracts top tier clients• Less downtime, more consistent results
FINANCIAL FLEXIBILITY• Able to maintain pricing discipline• Remains efficient and maintains margins
FOCUS ON CORE MARKET• High-growth market • Trusted management team with strong
geographical knowledge
CUSTOMER MIX• Well-established, long-term client relationships• 80% senior mining top-tier customers
Opportunities for Growth• Secured FIRST underground drilling contract• Junior exploration returning
INVESTOR PRESENTATION 2018 |
Superior Fleet of Multipurpose Rigs
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HIGH EFFICIENCY HIGH PERFORMANCE
Multipurpose rigs can switch between reverse circulation and diamond core drilling with minimal effort and little downtime
Multipurpose rigs do not have to be retooled or retrofitted to drill for different minerals
Our rig fleet is most modern in industry
Fleet currently consists of 58 rigs
INVESTOR PRESENTATION 2018 |
Our Mechanical Advantage
State–of-the–art operations facility ensures our fleet is well-maintained• Workshop manufactures up to 300 different
frequently replaced parts including drill rods
Workshops centrally located to client projects:• Able to reach projects to deliver repaired
parts quickly; reduced need to ship parts from out-of-country
• Less downtime for rigs awaiting repair
Contingency plan with sufficient inventory and fuel for a month reduces work stoppages/disruptions
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INVESTOR PRESENTATION 2018 |
Our people make the difference
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HIGHLY TRAINED AND SKILLED WORKFORCE DRIVES PRODUCTIVITY
All operations designed to meet the highest health and safety standards
90% of workforce are contract, non-unionized employees
Mutual respect, good working environment means low turnover
Low turnover maintains consistency, delivers improving results
INVESTOR PRESENTATION 2018 |
Top Tier Customer Base
• Newmont (GH)• Kinross (GH)• Acacia Mining (BF)• Centamin (BF)• Newcrest (CI) • Roxgold (BF) • Asanko Gld (GH)• Endeavour (GH)• Endeavour (CI)• Endeavour (BF) • Avnel Gold (ML)• Tietto Gold (CI)• Perseus (CI)• Perseus (GH)• Semafo (BF)• Star Goldfields (GH)• Apollo Consolidated (CI)• Anglo American (Zambia)
Niger
Burkina Faso
Benin
Nig
eria
Togo
Ghana
Mali
Senegal
Guinea
SierraLeone
Ivory Coast
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INVESTOR PRESENTATION 2018 |
Strong Financial Performance
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19.718.8 18.6
22.620.8
7.87.0 7.2
9.5 9.7
4.8 4.23.1
5.2 4.6
$0
$5
$10
$15
$20
$25
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Revenue (US) Gross Profit EBITDA
Milli
ons
Industry-leading Utilization Drives Growth Q3 2016 – Q3 2017All figures in U.S. Dollars
INVESTOR PRESENTATION 2018 |
Balance Sheet
Non-Current Assets$38.8M
in USD Sept 30, 2017
Current Assets $44.5M
Non-current Assets $38.8M
Total Assets $83.3M
Current Liabilities1. $17.7M
Total Debt $4.8M
Total Liabilities $22.5M
Total Equity $60.8M
NTBV $1.41 USD$1.80 CDN
Current Assets$44.5M
Receivables $17.0M
Inventory $19.0M
Cash $7.8M
Prepayments $0.7M
43%
38%
18% 2%
72%
9%
11%
8%
Plant &Equip. $3.5M
Drill rigs $28.0M
CWIP $4.3M
Vehicles & $3.0MLeasehold Improvements
1.excludes current debt11
INVESTOR PRESENTATION 2018 |
Progressive Balance Sheet
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20 Year Rig Growth Chart
16 8
1218
26
37 37 38 4045
58
0
10
20
30
40
50
60
70
1998 //
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
-$6.0-$4.0-$2.0$0.0$2.0$4.0$6.0$8.0
$10.0$12.0
DEB
T / C
ASH
CASH $M Total Debt $M Net Cash $M
38 38 39 39 3942 42
45 46 46
56 56 58
$-$5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60
$-
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0 CAPEX M$ Rigs
CAP
EX
3 Year snapshot:
§ Improved Net Cash position to $3M from -$6M
§ Grew Rig Fleet over 50% (from 38 to 58 Rigs)
§ Added 3 Operations Bases
INVESTOR PRESENTATION 2018 |
Our metrics are leading the industry
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We drilled the most metreswith our modern high
performance fleet
Highest ARPOR (Average Revenue Per Operating Rig)
GEO Quarterly ARPOR US$ 700k = twice
competitors C$ 400k
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17
Other Geodrill
INVESTOR PRESENTATION 2018 |
Compelling Valuation
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TD SECURITIES – MINERAL DRILLERS COMP TABLE December 21, 2017
Reporting Net Mkt. EV ND/ EBITDA ($mm) EVIEBITDA($mm)
Name Ticker Currency Price Debt Cap $mm P/BV EBITDA Current Yr Next Yr Current Yr Next Yr
METALS & MINERAL DRILLERS
BoartLongyear BLY-au AS $0.01 753.2 $9 $763 0.0x nmf nmf nmf nmf nmf
Major Drilling MDI-t C$ $6.68 -13.3 $536 $523 1.4x neg $27.2 $47.1 19.2x 11.1x
LayneChristensen LAYN-us US$ $12.89 130.0 $256 $386 4.6x 2.4x $35.6 $54.8 10.8x 7.0x
Ausdrill ASL-au A$ $2.50 221.9 $781 $1,003 1.0x 1.2x $165.8 $192.8 6.0x 5.2x
Foraco Intl FAR-t C$ $0.36 122.0 $32 $154 0.3x nmf nmf nmf nmf nmf
Orbit Garant O GD-t C$ $2.10 17.8 $76 $94 1.0x nmf nmf nmf nmf nmf
Energold EGD-v C$ $0.33 11.4 $18 $29 0.3x 3.2x -$4.0 $3.5 nmf 8.3x
GEODRILL GEO-t US$ C$2.00 -3.0 C$89 C$86 1.2x -0.1x $19.4 $25.3 3.5x 2.7x
Average 1.2x 9.9x 6.9x
Notes: Consensus Estimates, except for GEO, EGD and MDI, which are TD estimatesASL and OGD's Results are FY Ending June 30; LAYN's Results are FY Ending Jan. 31; MDI's Results are FY Ending Apr. 30.Current Yr estimates are based on FY2017 except for MDI which is FY2018.Source: Company Reports, Bloomberg, TD Securities.
INVESTOR PRESENTATION 2018 |
A Dearth of New Discoveries
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GOLD IN MAJOR NEW DISCOVERIES AND EXPLORATION BUDGETS
*Minng Weekly September 27th 2016
0 0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
20
40
60
80
100
120
140
160
180Major gold discoveries Moz US$ million US$ / oz
Gold discoveries Moz Gold production Moz Exploration budgets $m Gold price $/oz
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
INVESTOR PRESENTATION 2018 |
• Disciplined focus produced the most profitable mineral driller• Remained cash flow positive even during the downturn
• Expanded capacity of high performance rigs to drive solid margins
• Entered the Underground Drilling market with multi-year, multi-rig contracts with top-tier miners
• Industry-leading utilization rates and growing market share
• Strong demand and improved pricing• Compelling valuation
The Investment Thesis
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INVESTOR PRESENTATION 2018 |
WE ARE GEODRILL
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Investor Presentation, January 2018