Major Drilling Group International Inc. · TSX:MDI
Major Drilling Group International — Investor Presentation (March 2017)
19 slides from Major Drilling Group International's investor presentation, March 2017
Slide 1: March 2017
Groupe Forage Drilling Group International Inc. March 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the statements contained in this presentation may be forward-looking statements, such as, but not limited to, those relating to worldwide demand for gold and base metals and overall commodity prices, the level of activity in the minerals and metals industry and the
Slide 3: Company Overview
Company Overview • Symbol: MDI – T • Shares Outstanding: 80M • Price*: $7.60 • Market Cap*: $608M • Headquarters: Moncton, NB, Canada • Registered in over 20 countries on 6 continents • CEO: Denis Larocque • CFO: David Balser *as of March 2, 2017 3
Slide 4: Third Quarter Highlights
Third Quarter Highlights • Usual holiday shutdowns, but busier startup to the calendar year. • Margins affected by significant overhaul, training and Canadian weather. • Net cash still strong at $27.0 million. • Starting to see marginal price increases. 4
Slide 5: The Emergence of "Specialized" Drilling
The Emergence of “Specialized” Drilling The more easily accessible mineral reserves all over the world are being depleted. Our business premise is that the new deposits over the next 20 years will be in areas with difficult access and that specialized drilling will be a larger part of the market. 5
Slide 6: Our Strategy
Our Strategy • Be the world leader in specialized drilling. • Diversify our services within the drilling field. • Maintain a strong balance sheet. • Be the best in class in safety and human resources. • Modernize our conventional fleet and expand our footprint in strategic areas. 6
Slide 7: What is "Specialized Drilling"?
What is “Specialized Drilling”? • Exploration/definition drilling services with significant barriers to entry: • deep holes • permafrost • helicopter portability • directional drilling • high altitude drilling • remote locations • top safety requirements 7
Slide 8: Highlights
Highlights • A leading provider of drilling services to the mining industry, registered in over 20 countries, with a fleet of 645 rigs. • Senior management has over 1,000 years of combined experience. • Best balance sheet in the mineral drilling industry, with net cash balance of $27.0 million. • Hi
Slide 9: Financial Review
Financial Review ($millions except per share information) Q3 2017 Q3 2016 Revenue $ 70.1 $ 71.9 Gross margin 13.4% 18.1% G&A 11.4 11.3 EBITDA 1 (3.1) (1.6) Net loss (14.3) (15.9) EPS $ (0.18) $ (0.20) Total net cash 27.0 34.8 1 Earnings before interest, taxes, depreciation & amortization, excluding
Slide 10: Drilling Revenue by Customer
Drilling Revenue by Customer 3 months ended January 31, 2017 13% 87% Seniors/Intermediates Juniors 10
Slide 11: Drilling Revenue by Type of Project
Drilling Revenue by Type of Project 3 months ended January 31, 2017 12% 48% 40% Specialized Underground Conventional 11
Slide 12: Drilling Revenue by Commodity
Drilling Revenue by Commodity 3 months ended January 31, 2017 2% 5% Gold 11% Copper Other 23% Nickel 59% Zinc 12
Slide 13: Positive Industry Developments
Positive Industry Developments • Production continued, meaning mines/reserves are getting depleted at a rapid rate while not being replaced. • Mineral reserves of the top gold companies decreased by 30% over last 3 years. • Copper reserves expected to fall into deficit in the next few years. 13
Slide 14: Gold Reserves Declining Fast
Gold Reserves Declining Fast ↓ 30% 14
Slide 15: Copper Supply Gap
Copper Supply Gap Total potential copper mine production from operating mines and projects 24 Firm projects 22 Operating Mines Demand 20 Supply Gap Metric ton Cu 18 16 14 12 10 2014 2016 2018 2020 2022 2024 2026 Source:CRU 15
Slide 16: Exploration Drilling Needed Soon
Exploration Drilling Needed Soon • Takes 10-15 years to bring a mine from exploration stage to production stage. • Without exploration, most commodities will be in a supply deficit within five years. • New deposits will be in areas more difficult to access requiring specialized drilling. 16
Slide 17: Ready for Recovery
Ready for Recovery Major Drilling is well positioned to meet customers’ needs when exploration drilling returns. • Company has financial resources to: • Continue to enhance training and safety systems. • Keep equipment in good condition. • Maintain core staff and skills. 17
Slide 18: Customer Value Perception
Customer Value Perception Three Brand Pillars • Quality – of people, equipment, and systems. • Results – the resolve to overcome difficult obstacles in order to get the job done. • Relationships – Partners on the ground. 18
Slide 19: Questions?
Questions?
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