Major Drilling Group International Inc. · TSX:MDI
Major Drilling Group International — Investor Presentation (March 2024)
22 slides from Major Drilling Group International's investor presentation, March 2024
Slide 1: Investor Presentation
Investor Presentation March 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 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 - $11.43 Market Cap: ~$645.4M 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 20% 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. • 80% 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 • ~55% 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 50% 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 $210M. • $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. • Spent $2.7 million on share buybacks. Net Cash (Net Debt) Position 90 • No long-term debt. 80 $210M $96.4M 70 60 50 LIQUIDITY NET CASH POSITION 40 30 20 BALANCE SHEET Q3 2024 Q2 2024 10 0 Cash ($M
Slide 16: ESG: Culture of Sustainability
ESG: Culture of Sustainability QUALITY - SAFETY - RESULTS 16
Slide 17: Appendix
Appendix 17 QUALITY - SAFETY - RESULTS
Slide 18: Q3 2024: Financial Review
Q3 2024: Financial Review Q3 2024 Q3 2023 Revenue $132.8 $149.2 Gross Margin 14.2% 17.7% Adjusted Gross Margin1 23.4% 25.3% General & Administrative Costs $17.1 $16.4 EBITDA2 $11.4 $20.5 Net Earnings (Loss) $(2.3) $6.3 Earnings (Loss) per Share $(0.03) $0.08 Note - All values in $CAD unless otherwis
Slide 19: Utilization
Utilization Q3 2024 Q3 2024 # Rigs Utilization Specialized 288 43% Conventional 119 38% Underground 198 40% Total 605 41% 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% 28% Sp
Slide 21: Revenue Breakdown
Revenue Breakdown Drilling Revenue by Customer Drilling Revenue by Commodity Seniors and intermediates continued with their Lowest % of gold drilling in Company history as expanded exploration. demand from battery metals drives business. 10% 12% 16% 21% 20% 17% 7% 5% 7% 10% 6% 5% 3% 8% 9% 6% 2% 5% 2
Slide 22: High Quality Customer Base
High Quality Aligned To Balance Sheet Specialized Experienced Customer Base Market Sustainability Operations Management QUALITY - SAFETY - RESULTS 22
Major Drilling Group International — Investor Presentation (March 2024) on 6ix