Major Drilling Group International Inc. · TSX:MDI
Major Drilling Group International — Investor Presentation (June 2023)
24 slides from Major Drilling Group International's investor presentation, June 2023
Slide 1: Investor Presentation
Investor Presentation June 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: $7.34 - $11.58 Market Cap: ~$735.4M 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 24% 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. • 76% 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 we believe finding our dev
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: Capital Budget for Fiscal 2024
Capital Budget for Fiscal 2024 • Capital expenditures for fiscal 2024 expected to be at $80 million in order to: • Add specialized and underground drills in our busiest markets. • Retrofit existing rigs with updated technology and rod-handling capability. • Equip existing fleet with support equipmen
Slide 14: …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 $180M. • $28M net debt, $2M EBITDA and $0 to invest. Invested in fleet during downturn, kept • Minimal capex spent through downturn and fleet infra
Slide 15: Responding to Labour Challenges
Responding to Labour Challenges • Increased activity bringing shortage of skilled labour, particularly in North America. • We are addressing this challenge by: • Increased training efforts at our training centres. • Reinstating retention programs successful in previous upcycle. • Additional trainees
Slide 16: 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 17: Balance Sheet Strength
Balance Sheet Strength Clean balance sheet and no near-term maturities Robust Liquidity Position • Company well positioned financially for growth. • Announced Normal Course Issuer Bid for capital allocation flexibility. Net Cash (Net Debt) Position 80 • Temporary reduction in net cash caused by ty
Slide 18: ESG: Culture of Sustainability
ESG: Culture of Sustainability QUALITY - SAFETY - RESULTS 18
Slide 19: Appendix
Appendix 19 QUALITY - SAFETY - RESULTS
Slide 20: Q4 2023: Financial Review
Q4 2023: Financial Review Q4 2023 Q4 2022 Revenue $185.0 $190.0 Gross Margin 25.0% 25.5% Adjusted Gross Margin1 30.8% 31.0% General & Administrative Costs $16.3 $15.2 EBITDA2 $37.2 $40.7 Net Earnings $20.8 $22.4 Earnings per Share $0.25 $0.27 Note - All values in $CAD unless otherwise indicated. 1 -
Slide 21: Utilization
Utilization Q4 2023 Q4 2023 # Rigs Utilization Specialized 291 47% Conventional 111 41% Underground 198 46% Total 600 46% QUALITY - SAFETY - RESULTS 21
Slide 22: 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. 10% 24% S
Slide 23: Revenue Breakdown
Revenue Breakdown Gold activity levels return supported by need for battery metals. Drilling Revenue by Customer Drilling Revenue by Commodity Despite a year-over-year slowdown in junior Decarbonization efforts continue to drive activity, seniors and intermediates continued with exploration. their
Slide 24: High Quality Customer Base Aligned To Market
High Quality Aligned To Balance Sheet Specialized Experienced Customer Base Market Sustainability Operations Management QUALITY - SAFETY - RESULTS 24
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