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SAMPLE SLIDES from Geodrill
- 1. AGM 2017 | AGM, May 8, 2017 GEODRILL STRONG 1
- 2. AGM 2017 | STRENGTH IN NUMBERS Our decades of experience and superior fleet of rigs, remains our strong and differentiating competitive advantage. 2
- 3. AGM 2017 | Geodrill stronger than ever before 3 FIRST • We invested in equipment and increased our rig count • Maintained a strong presence in Ghana, Burkina Faso and Cote d’Ivoire • And drilled more metres than our competitors AS A RESULT WE • Increased utilization and grew profit • Delivered industry leading revenue and profit margins • Decreased debt
- 4. AGM 2017 | Our metrics are leading the industry 4 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 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Other Geodrill
- 5. AGM 2017 | Strong expertise in drilling 5 STRONG PERFORMANCE • Modern rig fleet • Scale of operations • Dedicated, trained team • Less downtime/higher efficiency • Attractive margins/returns • Reduced risk STRONG VALUE Produces
- 6. AGM 2017 | Geodrill Sets Itself Apart 6 High Performance Multi-purpose Rigs Vertically Integrated Operations Dedicated, local, experienced and highly trained workforce 1 2 3
- 7. AGM 2017 | Top Tier Customer Base • 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) • Apollo Consolidated (CI) • Anglo American (Zambia) Niger Burkina Faso Benin Nigeria Togo Ghana Mal i Senegal Guinea Sierra Leone Ivory Coast
- 9. AGM 2017 | Significantly Improved Financial Performance 9 15.5 19.4 19.7 18.8 6.6 7.8 7.8 7.1 4.8 5.4 4.8 4.2 $0 $5 $10 $15 $20 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Revenue (US) Gross Profit EBITDA Millions Fiscal 2016 All figures in U.S. Dollars
- 10. AGM 2017 | Quarterly Financial Performance 10 18.6 15.5 7.2 6.6 3.1 4.8 $0 $3 $6 $9 $12 $15 $18 $21 $24 Q1 2017 Q1 2016 Revenue Gross Profit EBITDA Millions Q1 2017 vs. Q1 2016 all figures in U.S. Dollars
- 11. AGM 2017 | • Most profitable drilling company in the mineral drilling sector • High performance rigs will continue to drive solid revenue and margins • Industry-leading utilization rates and growing market share • Strong demand and improved pricing • Compelling valuation STRONG VALUE 11
- 12. AGM 2017 | AGM, May 8, 2017 GEODRILL STRONG 12
Editor's Notes
- Thank you for attending Geodrill’s Annual General Meeting of Shareholders. And for those listening on the call, thank you for joining us. As most investors and our analysts read today – we released our Q1-2017 financial results, in which we witnessed rapid growth and continue to grow our revenue. Greg Borsk, our CFO will take the podium shortly to go into finance details of the quarter, followed by question and answer period. But first, I will provide an overview of the Company’s operations.
- We understand drilling. We have staked our reputation on this and our commitment to providing our clients with superior service. Backed by decades of experience, a superior rig fleet staffed by highly trained employees, sets us apart from our competition
- These strengths are reflected in the significant number of milestones we accomplished in 2016. As market conditions improved, so did our rig utilization, and we established a new company record drilling 1,007,835 meters in 2016. The records continued to be broken, with revenue exceeding the previous peak level reached in 2011; significantly, we also achieved 4 consecutive quarters of positive earnings. We made good use of cash generated from these operations by paying down debt and ended the year with significant net cash balance compared to being net debt in the previous year. Most significantly, we reinvested in equipment by purchasing 6 drills adding to the Company’s growing fleet, which now stands at 46 rigs. A further noteworthy achievement during 2016, was our attainment of 2.5 million man hours Lost Time Injuries free. Our commitment to ensuring the highest training health and safety standards has yielded a skilled local workforce that is also a critical element of our success.
- Geordrill’s ARPOR (average revenue per operating rig) is an important KPI we watch closely. Fact is, High performance, high quality rigs are always in demand – hence WE enjoy higher utilization. Utilization and Productivity are Key Drivers in the revenue equation, and we continue to demonstrate that we have the best metrics by far.
- Of course, mining is cyclical; it always has been and always will be. Our flexibility and efficiency positions us well to respond to changing and sometimes volatile market conditions. When markets contract, we are resilient; when they expand, we are ready.
- Beyond recognizing early on that West Africa was a huge growth region, we essentially have built a platform that is the recipe to our success: Our focus on maintaining a superior rig fleet remains a strong and differentiating competitive advantage. Our multi-purpose rigs can easily switch between and perform both Reverse Circulation and Core drilling, providing customers with increased flexibility. Utilizing multi-purpose rigs translates to lower costs and higher productivity for our customers. We also control our a large portion of supply chain with full service workshops in the centres of Ghana, Burkina Faso and most recently our third regional service centre in Cote d’Ivoire. Most importantly we understand drilling, and have built our reputation on the back of decades of in-depth experience. Our commitment to ensuring the highest training standards has yielded a skilled local that is also a critical element to our workforce. For Geodrill, it means more metres drilled, stronger customer relationships and the ability to continue to grow both our geographical footprint and market share.
- Changing gears, a quick look at customer concentration. This is a busy slide. That’s because we are operating in a busy environment During the down cycle we’re positioned ourselves with the who’s who of senior miners and intermediates, because there was no junior activity. Names like Newmont, Kinross, Semafo, Newcrest, Endeavour, Centamin, Rox Gold, Acacia, Asanko are all senior miners who needed to replace mined ounces with discovery ounces to keep their inventory levels in check. Significantly we were recently awarded a number of multi-rig contracts with Newmont Mining, Kinross, Newcrest Mining, SEMAFO Inc., Asanko Gold, and Acacia Mining; And now the juniors are back. And we’re already short of rigs.
- At this point of the presentation Greg Borsk our CFO will present our financial performance for the year and review our Q1-2016 results.
- As Dave mentioned, I will review our 2016 results and will then present our financial performance for the first quarter of 2017. 2016 was a year of achievements, We: Increased revenue by 53% Generated a gross margin of 40% Realized net income of $7.3M or $0.17 per share compared to a net loss of $(1.9M) or $(0.04) per share in the prior year Achieved the eleventh consecutive quarter of positive EBITDA margins reporting $19.2M compared to $10.4M Invested X into Capex; Awarded a number of significant multi-rig contracts Grew the Company’s rig fleet to 46 rigs
- As Dave mentioned Q1-2017 was marked by rapid growth. We: Increased revenue by 20% to $18.6M from $15.5M in Q1-2016; Invested $1.8M into CAPEX; Grew our rig fleet to 50 rigs; Increased meters drilled to 257,091 meters; and Ended the quarter with a net cash position of $6.1M. Specifically the Company was able to increase its revenue compared to the prior year due to increase demand and pricing. Also, on a quarter over quarter basis the meters drilled increased in the first quarter by 7% although revenue increased by 20%. This is due to a different drill mix. The gross profit for the first quarter of 2017 was $7.2M, being 39% of revenue. The gross profit increase reflects the increase in revenue with a corresponding increase in cost of sales of $2.4M. EBITDA for Q1-2017 was $1.3M compared to $2.8M in Q1-2016. the Company’s EBITDA margin was impacted this quarter by higher than usual SG&A costs related to tooling up new equipment, contractors and related expenses to support the increased level of activity the Company has been experiencing. Geodrill believes that the spending on health and safety, training systems and support employees will better position the Company as it continues to grow . We also incurred a $0.4M related to an increase in the allowance for doubtful account. The net income for Q1-2017was $0.3M or $0.01 per ordinary share compared to $1.6M or 0.04 per ordinary share
- Thanks Greg. To summarize: Q1 was a very busy period preparing and mobilising of rigs, and training of additional drill crews required to perform these new contracts. As a result, margins came under as pressure in the early part of the quarter, but normalized by quarter end. It’s been a busy quarter for capex too, as we grew the rig fleet to 56 rigs. In reality, Q1 has been our most audacious start to any fiscal year ever. Looking forward, the focus will be on driving costs to maintain and a return to stronger margins while maximising opportunities from additional new contracts over and above recent contract wins on the back of an ever increasing rig fleet while increasing our geographical footprint in West Africa. To quote Shakespeare, ‘The Bow is Bent and Drawn’. Our underlying earnings potential and ability to grow shareholder value is significant with significant increased substantial increases in activity levels and an improved pricing environment. With a strong balance sheet to grow organically , we are well positioned to capitalize on what is seemingly this new up cycle.