investor presentation, september 2016 we are...
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INVESTOR PRESENTATION 2016 |
WE ARE GEODRILL
Investor Presentation, September 2016
INVESTOR PRESENTATION 2016 |
Forward Looking Statements
This presentation contains “forward-looking information” and “financial outlook” within the
meaning of applicable Canadian securities laws and may contain forward looking
information attributed to third party industry sources. These statements and information are
predictions only and represent Geodrill’s expectations as of the date of this presentation
and Geodrill does not undertake any obligation to update the forward looking information or
financial outlook to reflect new information, subsequent events or otherwise. By their
nature, forward looking information and financial outlook involve numerous assumptions,
known and unknown risks and uncertainties, both general and specific, that contribute to
the possibility that the predictions, forecasts, and projections made will not occur and
actual events or results may differ materially from such predictions, forecasts, and
projections. Undue reliance should not be placed on such information as there can be no
assurance that the plans, intentions or expectations upon which they are based will occur.
Forward-looking information is also based upon the assumption that none of the identified
risk factors that could cause actual results to differ materially from the forward-looking
information will occur. Accordingly, specific reference should be made to the risk factors
described in the Annual Financial Statements available on SEDAR.
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INVESTOR PRESENTATION 2016 |
Corporate Data
MAJOR SHAREHOLDERS CAPITAL STRUCTURE
D. Harper 41.2% Symbol TSX-GEO
Sustainable capital 14.5% Shares Outstanding 42.5 M
Maxam Capital 11.6% Fully Diluted 45.5 M
Aegis Capital 8% 52 Week Range $2.38 - $0.47
AGF 5% IPO Date Dec 16, 2010
ANALYST COVERAGE IPO Price $2.00
Beacon Securities TD Securities Market Capitalization $90 M
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As at September 9, 2016
INVESTOR PRESENTATION 2016 |
Hard Core Drillers
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Mauritania
Senegal
Guinea
Mali
Niger
GhanaIvory Coast
SierraLeone
Burkina
Faso
GuineaBissau
Benin
Togo
WEST AFRICAN
PURE PLAY
24%
CAGR
100%
organic growth
INDUSTRY LEADING
METRICS
Focused stronghold
in mining rich area
Higher than industry
average
EBITDA margin
45
RIGS
1 to 45 rigs
since inception
INVESTOR PRESENTATION 2016 |
Positioned for growth
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HIGH PERFORMANCE RIG FLEET
• Tier-1 rig fleet attracts top tier clients
• Less downtime, more consistent results
FINANCIAL FLEXIBILITY
• Able to maintain pricing discipline
• Remains efficient and maintains margins
FOCUS ON CORE MARKET
• High-growth market
• Trusted management team with strong
geographical knowledge
CUSTOMER MIX
• Well-established, long-term client relationships
• 80% senior mining top-tier customers
INVESTOR PRESENTATION 2016 |
Superior Fleet of Multipurpose Rigs
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HIGH EFFICIENCY
HIGH PERFORMANCE
Multipurpose rigs can switch between
reverse circulation and diamond core
drilling with minimal effort and little
downtime
Multipurpose rigs do not have to be
retooled or retrofitted to drill for different
minerals
Our rig fleet is most modern in industry
Fleet currently consists of 45 rigs
INVESTOR PRESENTATION 2016 |
Our Mechanical Advantage
State-of-the-art operations facility ensures our
fleet is well-maintained
• Workshop manufactures up to 300 different
frequently replaced parts including drill rods
Workshops centrally located to client projects:
• Able to reach projects to deliver repaired
parts quickly; reduced need to ship parts
from out-of-country
• Less downtime for rigs awaiting repair
Contingency plan with sufficient inventory and fuel
for a month reduces work stoppages/disruptions
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INVESTOR PRESENTATION 2016 |
Our People Make the Difference
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HIGHLY TRAINED AND
SKILLED WORKFORCE
DRIVES PRODUCTIVITY
All operations designed to meet the highest
health and safety standards
90% of workforce are contract,
non-unionized employees
Mutual respect, good working
environment means low turnover
Low turnover maintains consistency, delivers
improving results
INVESTOR PRESENTATION 2016 |
Top Tier Customer Base 2016
• Newmont (GH)
• Kinross (GH)
• Acacia Mining (BF)
• Centamin (BF)
• Newcrest (CI)
• Roxgold (BF)
• Asanko Gld (GH)
• Endeavour (GH)
• Endeavour (CI)
• Endeavour (BF)
• Avnel Gold (ML)
• Tietto Gold (CI)
• Perseus (CI)
• Perseus (GH)
• Semafo (BF)
• Star Goldfields (GH)
• Cardinal Resources (GH)
• Anglo American (Zambia)
Niger
Burkina Faso
Benin
Togo
Ghana
Mali
Senegal
Guinea
Sierra
Leone
Ivory Coast
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INVESTOR PRESENTATION 2016 |
Improved Financial Performance
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16.0
10.2
12.3
15.5
19.4
6.6
2.5 2.4
6.6
7.8
5.3
1.5 1.7
4.85.4
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Q2 2015 Q32015 Q4 2015 Q1 2016 Q2 2016
Revenue (US) Gross Profit EBITDA
Mill
ion
s
Q2 2015 – Q2 2016 Year to Date
All figures in U.S. Dollars
INVESTOR PRESENTATION 2016 |
Balance Sheet
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In USD June 30, 2016
Current Assets $36.3M
Non-current
Assets$34.8M
Total Assets $71.1M
Current Liabilities $15.8M
Total Debt $5.6M
Total Liabilities $13.6M
Total Equity $51.9M
NTBV$1.22 USD
$1.59 CDN
Receivables $12.9M
Inventory $15.7M
Cash $6.7 M
Prepayments $1.0M
41%
39%
17%
3%
77%
12%
8%3%
Plant &Equip. $3.7M
Drill rigs $26.1M
CWIP $4.0M
Vehicles & $1.0M
Leasehold
Improvements
1. Excludes current debt
NON-CURRENT ASSETS
$34.8M
CURRENT ASSETS
$36.3M
INVESTOR PRESENTATION 2016 |
Progressive Balance Sheet
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38 38 38 39 39 3942 42
45
-$6.0-$5.0-$4.0-$3.0-$2.0-$1.0$0.0$1.0$2.0$3.0$4.0$5.0$6.0$7.0$8.0$9.0
$10.0
Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
DE
BT
/ C
AS
H
CASH $M Total Debt $M Net Debt/Cash $M Rigs
38 38 38 39 39 3942 42
45
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
CA
PE
X
CAPEX $M Rigs
Since 2014:
Total Debt down 20%
$5.6M
Cash increased 450% to
$6.7M
Net Cash $1.2M an
increase of 550%
We invested $9M in
Capex
Grew rig fleet 18% from
38 rigs to 45
Added 3 operational
bases in Burkina Faso,
Ivory Coast, and Zambia
INVESTOR PRESENTATION 2016 |
Our Metrics are Leading the Industry
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We drilled the most metres
with our modern high performance
fleet
Highest ARPOR
(Average Revenue
Per Operating Rig)
GEO Quarterly
ARPOR US$ 700k = twice
competitors C$ 400k
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Other Geodrill
INVESTOR PRESENTATION 2016 |
Compelling Valuation
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TD SECURITIES – MINERAL DRILLERS COMP TABLE
August 2016
Reporting Mkt. EV EBITDA ($mm) EVIEBITDA($mm)
Name Ticker Currency Price Cap $mm P/BV Current Yr Next Yr Current Yr Next Yr
METALS & MINERAL DRILLERS
Boart Longyear BLY-au AS $0.17 $158 $734 -0.9x nmf nmf nmf nmf
Major Drilling MDI-t C$ $7.50 $601 $563 1.4x $33.7 $52.5 16.7x 10.7x
Layne
ChristensenLAYN-us US$ $8.30 $164 $264 1.3x $33.5 $49.6 7.9x 5.3x
Ausdrill ASL-au A$ $1.13 $353 $672 0.4x $130.7 $133.7 5.1x 5.0x
Foraco Intl FAR-t C$ $0.40 $36 $137 0.3x nmf nmf nmf nmf
Orbit Garant O GD-t C$ $1.63 $57 $69 0.8x nmf nmf nmf nmf
Energold EGD-v C$ $1.05 $55 $63 0.6x -$3.4 $5.7 nmf 11.1x
GEODRILL GEO-t US$ C$2.10 C$89 C$88 1.3x $16.2 $18.6 4.1x 3.6x
Average 0.7x 8.5x 7.2x
Notes: Consensus Estimates, except for GEO, EGD and MDI, which are TD estimates
ASL and OGD's Results are FY Ending June 30; LAYN's Results are FY Ending Jan. 31; MDI's Results are FY Ending Apr. 30.
Current Yr estimates are based on FY2016, with the exception of LAYN and MDI which are FY2017
INVESTOR PRESENTATION 2016 |
A Dearth of New Discoveries
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GOLD IN MAJOR NEW DISCOVERIES
AND EXPLORATION BUDGETS
1990
0
1992 1992 1996 1992 2000 2002 2004 2006 2008 2010 2012 2014
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2,000
3,000
4,000
5,000
6,000
7,000
1,000
0
To
nn
es
US
$m
n
*A significant discovery is classified as a deposit containing at least 2 moz of gold in reserves, resources and past production, or at least 1 moz of
gold in reserves. **Includes 100% of grassroots and 75% of late-stage gold exploration budgets
Source: SNL Metals & Mining; World Gold Council
3-year running average AU in discoveries* Discovery-oriented gold budget** (rhs)
INVESTOR PRESENTATION 2016 |
• High performance rigs and unrivalled
drilling expertise
• Strong foothold and good reputation in
high-growth market
• Leading utilization rates and growing market share
• Strong demand and pricing
• Attractive valuation relative to peers
WHY GEODRILL?
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INVESTOR PRESENTATION 2016 |
WE ARE GEODRILL
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Investor Presentation, September 2016