Orbit Garant Drilling Inc.

Thank you, Regina, and good morning, ladies and gentlemen. With me on the call today is Pier-Luc Laplante, Chief Financial Officer.

Following my opening remarks, Pier-Luc will review our financial results in greater detail, and I will conclude with comments on our outlook. We will then welcome questions.

I'm extremely proud of our financial performance for the fiscal year 2025 as we generate our highest net earnings in more than 10 years. I want to take the opportunity to thank all the employees that contribute to deliver the solid performance.

Our performance reflects our continued focus on our strategic plan. We continue to benefit from our focus on senior and well-financed and intermediate customer in Canada and South America, our disciplined business strategy and continuous operational improvement program as well as our exit from West Africa in Q2 last year.

We finished this year with a solid fourth quarter with revenue growth of 3.9% compared to Q4 last year and net earnings of $0.06 per share. This reflects sixth consecutive quarter of year-over-year increase in net earnings.

Our adjusted gross margin was in excess of 20% in the quarter. Achieving adjusted gross margin of 20% or more is one of our primary objectives.

Our solid revenue in the quarter reflects higher revenue per meter drilled in Canada and increased drilling activity in South America. Our performance is also supported by a strong customer demand.

The price of gold is currently at historically high level and the price of copper also remained strong, which provides a strong incentive for mining companies to continue to invest in mine exploration and development activities. We expect demand to remain positive from senior and intermediate company despite the highly competitive environment.

Demand from junior company has been constrained due to the financing conditions, but we are starting to see increased financing activities on the junior side. We have a strong relationship in the junior mining sector and are well positioned to selectively pursue business with juniors when demand picks up again.

We still have significant available drilling capacity in Canada and the potential to expand our regional presence, and we can easily mobilize drilled rigs with minimal CapEx as opportunities present themselves. I will now turn the call over to Pier-Luc to review our results for the fourth quarter and fiscal 2025 in greater detail.

Pier-Luc?

Thank you, Daniel, and good morning, everyone. Revenue for our fiscal fourth quarter totaled $47.2 million, up from $45.3 million in Q4 last year.

Canada revenue was $33.8 million in the quarter, an increase of 2.7% from $32.8 million in Q4 a year ago, reflecting higher revenue per meter drilled. International revenue totaled $13.4 million, an increase of 7.0% from $12.5 million in Q4 a year ago, reflecting increased drilling activity in South America.

Gross profit was $7.6 million or 16.0% of revenue compared to $7.5 million or 16.6% of revenue in Q4 2024. Adjusted gross margin, excluding depreciation expenses and a gain on disposal of property, plant and equipment, was 20.2% in the quarter compared to 17.8% in Q4 2024.

The increases in gross profit and adjusted gross margin were primarily attributable to higher revenue per meter drilled in Canada, increased drilling activity in South America and the cessation of drilling activities in West Africa during Q2 2024, which were unprofitable. Adjusted EBITDA totaled $5.5 million, down from $6.7 million in Q4 last year.

The decrease was primarily attributable to an unfavorable foreign exchange variance and start-up costs for a new project in South America, partially offset by increased operating earnings in Canada. Net earnings for the quarter were $2.2 million or $0.06 per share diluted compared to a net loss of $2.3 million or $0.06 per share diluted in Q4 last year.

Our net earnings in Q4 this year were primarily attributable to the effect of the substantial modification of a receivable and expected credit loss and the reclassification of cumulative translation adjustments in Q4 a year ago, related to our exit from West Africa, partially offset by a slight reduction in consolidated operating earnings, a reduced income tax recovery and an unfavorable foreign exchange movement. For fiscal 2025, we generated revenue of $189 million, an increase of 4.3% compared to fiscal 2024.

Canada revenue totaled $136.1 million for fiscal 2025, an increase of 2.6% compared to fiscal 2024, reflecting higher revenue per meter drilled. International revenue for fiscal 2025 totaled $53.0 million, an increase of 9.0% compared to fiscal 2024, reflecting increased drilling activity in South America.

Gross profit for fiscal 2025 was $28.3 million or 15.0% of revenue compared to $21.2 million or 11.7% of revenue in fiscal 2024. Adjusted gross margin, excluding depreciation expense and a gain on disposal of property, plant and equipment, was 19.5% in fiscal 2025 compared to 15.9% in fiscal 2024.

The increases in gross profit and adjusted gross margin were primarily attributable to higher revenue per meter drilled in Canada, increased drilling activity in South America and the cessation of our drilling activities in West Africa during Q2 2024. Adjusted EBITDA totaled $21.7 million in fiscal 2025 compared to $14.7 million in fiscal 2024.

The increase reflects higher operating earnings in both Canada and South America and a favorable foreign exchange variation. Net earnings for fiscal 2025 were $7.5 million or $0.20 per share diluted compared to a net loss of $2.4 million or $0.06 per share diluted in fiscal 2024.

Our net earnings in fiscal 2025 were primarily attributable to increased operating earnings in both Canada and South America, the effect of a substantial modification of our receivable and expected credit loss and the reclassification of cumulative translation adjustments in Q4 2024, interest revenue on the long-term receivable related to the sale of our assets in West Africa and a favorable foreign exchange variation, partially offset by increased income tax expense. Turning to our balance sheet.

We repaid a net amount of $7.5 million on our credit facility in fiscal 2025 compared to a net repayment of $0.7 million in fiscal 2024. Our long-term debt under the credit facility, including an undrawn USD 5.0 million revolving credit facility and the current portion, was $14.0 million at year-end compared to $21.5 million at year-end fiscal 2024.

Pursuant to our normal course issuer bid, we repurchased and canceled 68,916 of our common shares at a weighted average price of $0.82 per share during fiscal 2025. Our issuer bid formally terminates on October 30 this year.

We believe that our capital allocation initiatives in paying down debt and buying back shares during fiscal 2025 will help drive further value creation for shareholders. Our working capital at year-end totaled $50.4 million compared to $48.6 million at the end of fiscal 2024.

I will now turn the call back to Daniel for closing comments. Daniel?

Thank you, Pier-Luc. Let me close by reiterating that we embarked on an important strategic shift a few years ago, and I'm extremely pleased with how the company has responded to this plan, and we are seeing the result of these efforts.

2025 marked our best financial performance over the last 10 years and highlight the dedication of the entire Orbit Garant team. Our strategic focus on Canada and South America, disciplined business strategy and continuous operational improvement program are working well for us, and we are going to stick on it as we continue to work hard to strengthen our market position and profitability.

Metal price are also trending positively for us with gold price spiking to record level this year, gold miners are highly motivated to increase their mineral reserve and resources, but they need to spend money on drilling to prove them up. We generate more than 60% of our revenue from gold drilling operation in fiscal 2025, and we are, therefore, well positioned to benefit from gold exploration and development spending.

Copper prices have also been strong this year, even with economic concern related to tariffs. We believe this reflects the strong demand outlook for copper, a mineral that is necessary for the ongoing electrification of the global economy.

We are well positioned to benefit from increased exploration and development spending related to copper with our presence in Chile, the largest copper producing country in the world. With the right strategic focus and supportive industry fundamentals, we believe that we are well positioned to drive enhanced profitability on a sustainable basis and build long-term value for our shareholders.

That concludes our formal remarks for today. We will now welcome any questions.

Virginia, please begin the question period.

Yes. Thank you, Virginia.

Thank you, everyone, for participating today. We look forward to speaking with you again, too.

Bye-bye.