Major Drilling Group International Inc. · TSX:MDI
Major Drilling Group International — Investor Presentation (June 2024)
22 slides from Major Drilling Group International's investor presentation, June 2024
Slide 1: Investor Presentation
Investor Presentation June 2024 TSX: MDI QUALITY - SAFETY - RESULTS majordrilling.com QUALITY - SAFETY - RESULTS
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this presentation that address future events, developme
Slide 3: Major Drilling: Company Overview
Major Drilling: Company Overview • Leading provider of specialized drilling FUNDAMENTALS services to the mining industry, registered in TSX: MDI REGISTERED IN OVER ACROSS over 20 countries, with a fleet of approx. 600 drills. 52 Week Range: $6.97 - $10.25 Market Cap: ~$800M 20 5 • Diversified portfo
Slide 4: Investment Proposition
Investment Proposition Ideally positioned to capture the mining upturn Specialized • Significant barriers to entry met with right experience & modern fleet Operations • Operating in challenging environments where largest new discoveries likely found Aligned To • Leverage to multi-year exploration
Slide 5: Diversified, Sustainable Revenue Sources
Diversified, Sustainable Revenue Sources Broad range of services, customers and leverage to Drilling Revenue by Customer premium commodities ensures sustainable revenue sources • Major Drilling has historically been driven by a gold customer base, but the 18% emergence of the battery metal demand
Slide 6: Contractor of Choice
Contractor of Choice Providing repeat services to the highest quality, investment grade customers • Diversified repeat customer base with low turnover. • Many larger customers consist of multiple ‘independent’ regional subsidiaries/projects. • 82% of Major Drilling revenue is sourced from operatio
Slide 7: Operational Diversification
Operational Diversification Diversified operations spread globally in highest-return regions • Registered in over 20 countries Key Projects across 5 continents. • MDI’s operations and customers provide protection against market volatility through diversification. Oyu Tolgoi Op: Rio Tinto • Global
Slide 8: Specialized Drilling
Specialized Drilling Surpassing customer expectations, industry leader in operational excellence and on-site safety • Specialized drilling services have significant barriers to entry, focus on areas more difficult to access. • Examples include: • Deep hole drilling • Arctic drilling • Helicopter p
Slide 9: Gold Reserves Need to be Replenished
Gold Reserves Need to be Replenished • Senior gold companies generating strong cash flows, however, gold reserves declining due to lack of material “While we look closely at all exploration. new business opportunities, • Prioritizing value-adding grassroots exploration and development programs. we b
Slide 10: Copper Heading for a Supply Crunch
Copper Heading for a Supply Crunch • Copper industry supply deficit starting to be recognized. • “…despite a very powerful green demand narrative, it's a • To close gap by 2030 requires 8 mines the size of BHP complete state of inaction from the supply side.” Escondida (world’s largest copper mine),
Slide 11: Upcycle Unfolding like Previous One…
Upcycle Unfolding like Previous One… Industry backdrop mirrors early 2000’s upcycle • Only at 60% of peak exploration. • Excluding inflation, at same level of efforts as 2006. • Industry still in discovery phase, with intense infill drilling needed to develop new mines. • New deposits will come fr
Slide 12: Upcycle Unfolding like Previous One…
Upcycle Unfolding like Previous One… Last cycle escalation 1998-2004 2004 2005 2006 2007-2012 6-year lack of Senior gold companies Junior gold financing Increased copper and Extensive definition exploration increase exploration to available; increased base metal budgets to drilling campaigns to buil
Slide 13: …and MDI is Optimally Positioned
…and MDI is Optimally Positioned What’s different for Major Drilling this time? Today 2002 Entered downturn net cash on hand. Current liquidity of $200M. • $28M net debt, $2M EBITDA and $0 to invest. Invested in fleet during downturn, kept • Minimal capex spent through downturn and fleet infra
Slide 14: Modern Fleet and Innovation
Modern Fleet and Innovation • We maintain the largest, and one of the most modern fleets in the industry. • Continue to make investments in innovation. • Partnerships with key customers to develop cutting-edge technologies and providing drilling data for their modeling. • Optimizing operations throu
Slide 15: Balance Sheet Strength
Balance Sheet Strength Clean balance sheet Robust Liquidity Position • Strong cash flow generation. • No long-term debt. Net Cash (Net Debt) Position 90 80 $200M $87.4M 70 60 50 LIQUIDITY NET CASH POSITION 40 30 20 BALANCE SHEET Q4 2024 Q3 2024 10 0 Cash ($M) 96.2 104.9 -10 -20 Total Liquidity ($M
Slide 16: ESG: Culture of Sustainability
ESG: Culture of Sustainability Set a target to reduce scope 1 and scope 2 GHG Launched our Decarbonization Begun deploying the Trailblazer emissions by 5% by 2030 Action Plan AquaLink Remote Water Pump system 72% increase of women in the 56% of our Board of Directors field during calendar 2023 was r
Slide 17: Appendix
Appendix 17 QUALITY - SAFETY - RESULTS
Slide 18: Q4 2024: Financial Review
Q4 2024: Financial Review Q4 2024 Q4 2023 Revenue $168.0 $185.0 Gross Margin 19.3% 25.0% Adjusted Gross Margin1 26.9% 30.8% General & Administrative Costs $17.6 $16.3 EBITDA2 $25.3 $37.2 Net Earnings $9.9 $20.8 Earnings per Share $0.12 $0.25 Note - All values in $CAD unless otherwise indicated. 1 -
Slide 19: Utilization
Utilization Q4 2024 Q4 2024 # Rigs Utilization Specialized 293 44% Conventional 117 39% Underground 196 48% Total 606 45% QUALITY - SAFETY - RESULTS 19
Slide 20: Majority of Activity Focused on Specialized
Majority of Activity Focused on Specialized Fleet activity reflects both market dynamics and Major Drilling strategy • With future deposits coming from areas more Drilling Revenue by Project Type difficult to access, there will be an increased need for specialized services in the future. 8% 26% Sp
Slide 21: Revenue Breakdown
Revenue Breakdown Drilling Revenue by Customer Drilling Revenue by Commodity Seniors and intermediates continued with their Historically high % of copper drilling as demand expanded exploration. from battery metals drives business. 9% 17% 12% 20% 18% 5% 5% 24% 6% 9% 11% 8% 5% 8% 6% 9% 5% 5% 17% 27%
Slide 22: High Quality Customer Base Aligned To
High Quality Aligned To Balance Sheet Specialized Experienced Customer Base Market Sustainability Operations Management QUALITY - SAFETY - RESULTS 22
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