Geodrill (GEO) 16th Annual LD Micro Invitational Conference summary

Business overview and strategy

• Provides mineral exploration drilling services in Africa and South America, operating 100 rigs across five countries with a focus on gold and copper exploration.

• Maintains long-term contracts with Tier 1 mining clients, ensuring recurring revenues and business stability.

• Employs a vertically integrated model, manufacturing its own drilling equipment in Ghana, which supports operational efficiency and resilience during supply chain disruptions.

• All growth has been organic over 28 years, with no acquisitions, expanding from one rig to 100.

• Diversification into South America, particularly Chile, has begun to yield positive gross profit after initial challenges.

Market environment and industry trends

• Gold prices have surged approximately 40% year-over-year, reaching highs of $5,000 per ounce, driving increased exploration activity.

• The company is positioned as a 'picks and shovels' play, benefiting from increased exploration budgets, with about 50% of such budgets spent on drilling.

• West Africa has become the largest gold-producing region globally, attracting all major mining companies.

• Copper and gold are at record highs, supporting strong demand for drilling services.

Financial performance and outlook

• Q1 revenue was $48.4 million, flat year-over-year due to a slow start and currency pressures, but a stronger run rate at quarter-end signals a record Q2 ahead.

• Gross profit margin dropped to 15% and EBITDA margin to 12% in Q1, but both are expected to recover as contract repricing catches up with rising costs.

• Revenue has grown from $50 million to $185 million over the past 13 years, with analysts projecting $200 million in 2026 and $217 million in 2027.

• All growth has been funded organically, with no debt and a strong balance sheet: $48 million working capital, $118 million equity, and $1.9 million net cash.

• Shares trade at a discount to book value and at lower EBITDA multiples compared to peers, despite strong fundamentals.