Orbit Garant Drilling Inc. · TSX:OGD
Orbit Garant Drilling — Investor Presentation (June 2019)
28 slides from Orbit Garant Drilling's investor presentation, June 2019
Slide 1: Investor Presentation June 2019
Investor Presentation June 2019 Industry leadership through continuous innovation
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Information Certain statements contained herein constitute “forward-looking statements” which reflect the current expectations of management regarding the Company’s future growth, results of operations, performance, business prospects and opportunities based on
Slide 3: Capital Market Profile
Capital Market Profile Recent close (June 18, 2019): $1.10 TSX: OGD 52-week high / low: $2.29 / $1.09 Analyst Market Cap: ~$41 million Coverage: Shares Outstanding: 37,021,756 Fully Diluted: 39,982,256 Institutional / retail: ~ 40% / 60% (float) Management own approximately 27% of shares outstanding
Slide 4: Company Overview
Company Overview • Long-established, leading Canadian-based mineral driller • Focus on continuous innovation • Expertise in specialized drilling / senior management field experience • Vertically-integrated manufacturing subsidiary • Strong health & safety / driller training programs • Long-standing
Slide 5: Company Overview
Company Overview • 1,300 employees / 236 drill rigs Val-d’Or • Head office: Val-d’Or, Quebec • Regional offices: Sudbury, ON, Moncton, NB, Chile, Ghana, United States, Burkina Faso, Peru & Guyana • Current field operations: Canada, Argentina, Burkina Faso, Chile, Ghana & Guyana Santiago Burkina Faso
Slide 6: Market Position (by % of revenue)
Market Position (by % of revenue*) Drilling Activity Customers Regions 15% Juniors 28% Underground International 52% 48% Surface Majors & 72% Canada 85% Intermediates Resource Exposure Drilling Services 32% Base Metals / 40% Specialized Other Gold 60% 68% Conventional Diversified revenue mix TSX: OG
Slide 7: Drilling Services & Expertise
Drilling Services & Expertise Surface Underground Specialized Drilling • Standard diamond coring • Standard rod / core rod Drilling projects that are in / core rod • AWL - HWL calibre remote locations or, • Standard / reverse because of the scope, • Geotechnical drilling complexity or technical circ
Slide 8: Vertical Integration / Health & Safety / Driller Training
Vertical Integration / Health & Safety / Driller Training • Vertically integrated manufacturing subsidiary, Soudure Royale, provides competitive advantage – Ability to design and manufacture custom drill rigs and equipment for customers at a competitive cost with faster delivery – Key to continuous
Slide 9: Continuous Innovation
Continuous Innovation Computerized Monitoring and Control Performance Highlights Greater accuracy Improved productivity (+30%) Fewer consumables Rig components last longer Easier to train personnel Additional Feature Benefits for Customers Real-time, remote monitoring of drilling progress Ability to
Slide 10: Continuous Innovation
Continuous Innovation Responding to customer needs YU 615 • Computerized underground drill rigs o YU 615 (1st generation) o YU 1800 (2nd generation) o YU 1000 (next generation) YU 1800 • YU 1800 custom designed and manufactured for specialized drilling project with Anglo American in Chile o YU 1800
Slide 11: Continuous Innovation
Continuous Innovation • Rod Handling System Rod Handling System o Completely automated o Its compact design allows to work in small area o OGD holds patents on this product o Possibility to commercialize this system • Drill Between Shifts o Computerized drill system who allows to drill between shift
Slide 12: Strong Customer Relationships
Strong Customer Relationships Core strengths support long-term customer relationships TSX: OGD 12
Slide 13: Expanding International Growth Platform
Expanding International Growth Platform Chile West Africa Largest producer of copper in the Active in Ghana and Burkina Faso world and 5th largest producer of (1st and 5th largest gold-producing non-ferrous metals countries in Africa) Commenced first project in Q2 A highly prospective, historically
Slide 14: OGD Chile
OGD Chile • Operating subsidiary established in Chile (FY2013) • Acquisition of Captagua in FY2016 • Total of 23 drill rigs – 17 surface drill rigs – 5 Underground drill rigs • Strong platform for growth in Chile and broader South American market with combined surface and underground drilling expert
Slide 15: West Africa
West Africa • Operating subsidiaries established in Ghana (FY2015) and Burkina Faso (FY2016) • Acquisition of the drilling business of Projet Production International in Burkina Faso (Q2 FY2019) – $6.4 million purchase price ($5.15 million cash / $1.25 million in commons shares) – 13 surface drill r
Slide 16: Declining Global Gold Discoveries
Declining Global Gold Discoveries Global Gold Discoveries vs. Exploration Spending, 1990-2017 Gold Price ($USD/oz) / Gold Exploration Budgets (US$millions) Millions of ounces Gold in major discoveries Gold Exploration Budgets Projected new gold in major discoveries Gold Price • Gold discovery rates
Slide 17: Declining Reserves in Global Gold Sector
Declining Reserves in Global Gold Sector Major Gold Producers’ Years of Reserves Remaining, 2008 vs. 2017 Production years of reserves remaining 2017 production (000s of ounces) 2008 years remaining 2017 years remaining 2017 production • The senior gold producers’ mineable reserves have dropped shar
Slide 18: Global Exploration Budgets
Global Exploration Budgets Annual nonferrous exploration budgets, 1996-2018 Estimated global nonferrous exploration budget (US$billions) • 2018 aggregate global nonferrous exploration budgets increased 19% to an estimated US$10.1 billion Annual indexed metals price • Second consecutive annual increa
Slide 19: Mining Financing
Mining Financing Junior and intermediate financings, March 2017 - May 2019 Amount Raised (US$millions) Number of Financings Gold financings Base / other metals financings Specialty commodities financings Number of financings completed • Mining finance activity recovered in the spring of 2019, return
Slide 20: Historical Metres Drilled and Utilization Rates
Historical Metres Drilled and Utilization Rates (in thousands of metres and average annual utilization percentage) 69% 58% 62% 56% 43% 40% 45% 35% 1,490 1,537 1,293 1,152 997 989 825 893 386* 1 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 YTD FY2019 1) Nine months ended March 31, 2019. Q1
Slide 21: Historical Pricing
Historical Pricing Revenue per metre drilled ($/m)* 116 116 118 114 108 105 103 100 99 96 96 95 91 88 88 85 386* Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 Q1 * Figures are rounded to the nearest dollar. TSX: OGD 21
Slide 22: Q3 FY2019 Financial Review
Q3 FY2019 Financial Review Revenue EBITDA¹ Adjusted Gross ($ millions) ($ millions) Margin¹ 5.5 44.5 21.1% 20.4% 43.1 37.3 37.4 33.7 3.4 15.2% 14.3% 9.8% 1.4 0.9 0.9 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 FY2019 G&A Expense: Q3 FY2019 Net loss pe
Slide 23: YTD FY2019 Financial Review
YTD FY2019 Financial Review Nine months Nine months ended March 31, ended March 31, 2019 2018 Revenue ($millions) 108.4 128.6 Gross Profit ($millions) 11.6 14.0 EBITDA ($millions) 5.7 9.2 Adjusted Gross Margin 16.7% 15.5% G&A expenses ($millions) 12.91 12.0 Net earnings ($millions) (2.7) 1.2 Net ear
Slide 24: Sound Balance Sheet
Sound Balance Sheet ($ millions) As at March 31, As at June 30, 2019 2018 Cash 2.8 4.6 Total current assets 83.7 78.4 Total assets 134.0 123.3 Total current liabilities 28.3 25.1 Long-term debt1 28.2 19.2 Total shareholder equity 77.5 78.9 Working capital 55.3 53.3 1) Long-term debt includes finance
Slide 25: Strategic Direction
Strategic Direction • Focus on conventional, specialized and geotechnical drilling services • Leverage vertical integration by manufacturing custom drill rigs and equipment to meet customer needs • Maintain commitment to R&D, innovation and advanced drilling technologies • Continuous improvement in
Slide 26: Investment Highlights
Investment Highlights • Industry leader in innovation and specialized drilling • Low-risk, diversified exposure to mining sector • High exposure to gold-related projects • Expertise in arctic drilling conditions • Strong market share in Canada and Chile – two of the most active mineral exploration m
Slide 27: Forward-Looking Information
Forward-Looking Information APPENDIX 27
Slide 28: Reconciliation of Non-IFRS Financial Measures
RECONCILIATION OF NON - IFRS FINANCIAL MEASURES “EBITDA”: Net earnings (loss) before interest, taxes, depreciation and amortization. Management believes that EBITDA is an important measure when analyzing its operating profitability, as it removes the impact of financing costs, certain non-cash items
Orbit Garant Drilling — Investor Presentation (June 2019) on 6ix