Major Drilling Group International Inc. · TSX:MDI
Major Drilling Group International — Investor Presentation (December 2023)
22 slides from Major Drilling Group International's investor presentation, December 2023
Slide 1: Investor Presentation
Investor Presentation December 2023 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 FUNDAMENTALS1 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 - $11.58 Market Cap: ~$640.4M 20 5 • Diversified por
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 21% 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. • 79% 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 • ~60% of
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 $198M. • $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: Investing in Training & Innovation
Investing in Training & Innovation Allocating capital to data-led initiatives to boost productivity, operational efficiency, and enhance customer information • Rapid changes in technology leading drilling contractors to find new solutions to old problems. • Data-led innovation initiatives boost pr
Slide 15: Balance Sheet Strength
Balance Sheet Strength Clean balance sheet and no near-term maturities Robust Liquidity Position • Strong cash flow generation. Net Cash (Net Debt) Position • Spent $7.3 million on share buybacks. 90 80 $198M $84.2M 70 60 50 LIQUIDITY NET CASH POSITION 40 30 20 BALANCE SHEET Q2 2024 Q1 2024 10 0 C
Slide 16: ESG: Culture of Sustainability
ESG: Culture of Sustainability QUALITY - SAFETY - RESULTS 16
Slide 17: Appendix
Appendix 17 QUALITY - SAFETY - RESULTS
Slide 18: Q2 2024: Financial Review
Q2 2024: Financial Review Q2 2024 Q2 2023 Revenue $207.0 $201.7 Gross Margin 25.3% 26.3% Adjusted Gross Margin1 31.0% 31.8% General & Administrative Costs $17.6 $16.1 EBITDA2 $43.6 $43.0 Net Earnings $23.7 $23.6 Earnings per Share $0.29 $0.29 Note - All values in $CAD unless otherwise indicated. 1 -
Slide 19: Utilization
Utilization Q2 2024 Q2 2024 # Rigs Utilization Specialized 285 46% Conventional 119 48% Underground 198 49% Total 602 48% 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. 11% Speci
Slide 21: Revenue Breakdown
Revenue Breakdown Drilling Revenue by Customer Drilling Revenue by Commodity Seniors and intermediates continued with their Need for battery metals is reflected in expanded exploration spending while junior commodity mix. markets remain challenged. 6% 8% 12% 21% 6% 6% 24% 24% 5% 9% 11% 4% 10% 7% 4%
Slide 22: High Quality Customer Base
High Quality Aligned To Balance Sheet Specialized Experienced Customer Base Market Sustainability Operations Management QUALITY - SAFETY - RESULTS 22
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