Good morning, ladies and gentlemen, and welcome to Orbit Garant Drilling's F iscal 2024 Second Quarter Results Conference Call and Webcast. At this time, all lines are in listen-only mode. Following management's remarks, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Please be aware that certain information discussed today may be forward-looking and that actual results could differ materially. Certain non-IFRS financial measures will also be discussed. Please refer to the company's SEDAR filings for additional information on both risk factors and non-IFRS measures. This call is being recorded on Thursday, February 8th, 2024. I would now like to turn the conference over to Mr. Pierre Alexandre, President and CEO of Orbit Garant. Please go ahead, sir. Thank you, Operator, and good morning, ladies and gentlemen. With me on the call today is Daniel Maheu, CFO. Following my opening remarks, Daniel will review our financial results in greater detail, and I will conclude with comments on our outlook. We will then welcome questions. Our second quarter results were impacted by customer decisions to temporarily suspend or reduce activity on certain projects in Canada, beginning in the fourth quarter of fiscal 2023. The reduced drilling activity impacted our revenue, and we did not have the corresponding reduction in costs because we chose to retain our drilling personnel on this project due to both the highly competitive market for drillers and our expectation of this project being gradually resumed. We also faced additional ramp-up costs related to this project during the quarter, which further impact our margin. These suspended and reduced projects began to gradually ramp back up in August 2023, and as expected, all of them were fully resumed by January 2024. So this issue is now behind us. Another important development in the quarter was the completion of our final drilling project in Burkina Faso and Guinea. We are currently in the process of exiting West Africa altogether. We are pursuing potential sales of our equipment there to local companies and may also ship equipment to our operation in Canada and South America. As we previously noted, we decided to cease operation in Burkina Faso due to ongoing political instability and security concerns. In light of this decision, we determined that a full exit from West Africa made better business sense than maintaining our remaining operation in Guinea. We believe that our exit from West Africa will positively impact our future margin. Going forward, we will continue to primarily focus on our core Canadian gold operation, while selectively pursuing attractive opportunities in South America. During the second quarter, we renewed a large specialized drilling contract in Canada with an important senior gold mining customer for a term of three years. We will continue to operate 15-20 surface and underground drill rigs on this customer's project site over the term of the contract. Customer demand for our drilling service remains strong in Canada and is supported by near record gold price. We are also experiencing increased demand and improved performance in our Chilean operation. I will now turn the call over to Daniel to review our results for the second quarter. Daniel? Thank you, Pierre, and good morning, everyone. Revenue for the quarter totaled CAD 43.4 million, a decrease of 16% compared to Q2 a year ago. Canada revenue was CAD 29.6 million, a decline of 22.7% compared to Q2 last year, reflecting customer decision to temporarily suspend or reduce activity on certain projects in the first half of fiscal 2024. As Pierre noted, these projects started to gradually resume in August 2023 and were fully resumed by January 2024. International revenue was CAD 13.8 million, an increase of 3% from Q2 last year, reflecting increased drilling activity in Chile, partially offset by a reduction of drilling activity in Guyana and Burkina Faso. Gross profit for the quarter was CAD 2.8 million, or 6.4% of revenue, compared to CAD 6.8 million, or 13.1% of revenue in Q2 last year. Adjusted margin, excluding depreciation expenses, was 12.2%, compared to 18.1% in Q2 last year. The decline in gross profit, gross margin, and adjusted gross margin was primarily attributable to the reduction of drilling activity in Canada and our decision to retain our drilling personnel on suspended or reduced customer projects, as Pierre noted earlier. We also incurred additional ramp-up costs related to these projects. We are pleased to note that these projects were all fully resumed last month, so we are now seeing a positive margin contribution from these projects. General and administrative expenses were CAD 4.1 million, or 9.5% of revenue in the quarter, compared to CAD 3.9 million or 7.5% of revenue in Q2 last year. EBITDA was CAD 1 million, compared to CAD 6.9 million in Q2 a year ago. Our net loss for the quarter was CAD 1.7 million, or CAD 0.05 per share, compared to a net earnings of CAD 2.1 million, or CAD 0.06 per share in Q2 last year. The year-over-year declines are due to the factors already discussed and a negative foreign exchange variance of CAD 1.6 million, partially offset by increased drilling activity in Chile. Our net loss in Q2 this year was also partially offset by an income tax recovery of CAD 1 million. Now, turning to our balance sheet. On November 2nd, 2023, we entered into a fifth amended and restated credit agreement with National Bank of Canada in respect of our credit facility. The credit facility consists of a CAD 3 million revolving facility and a $5 million revolving facility guaranteed by Export Development Canada. The credit facility expired on November 2nd, 2026. We repay a net amount of CAD 0.3 million on the credit facility in Q2 this year, compared to a repayment of CAD 2.9 million in Q2 a year ago. Our long-term debt under the credit facility, including $2 million draw from the EDC facility and the current portion, was CAD 24.6 million at quarter end, compared to CAD 22.2 million as at June 30th, 2023, our fiscal year end. At quarter end, our working capital totaled CAD 48.8 million, compared to CAD 50.4 million as of June 30th, 2023. I will now turn the call back to Pierre for closing comments. Pierre? Thanks, Daniel. With all of our drilling projects in Canada now fully resumed, we are well positioned to capitalize on strong customer demand and drive profitable growth. Gold prices recently traded at all-time record level, above $2,100 an ounce. Gold mining is a highly profitable business at current prices, and mining companies have a strong incentive to increase exploration spending and expand their reserves and resources. We generate nearly 2/3 of our revenue from gold-related operations. Copper prices are also at elevated level, and industry forecasts indicate solid growth in demand in the coming years. The positive outlook is being driven by copper's critical role in electric transport, electricity transmission grids, and renewable power generation. Much more copper will be needed to help with the world's decarbonization efforts, and we expect to see continued strong demand for our copper mining customers in Chile. We have been increasing our focus on senior and intermediate customer in the mining sector, while continuing to work with a select group of well-financed juniors. Approximately 90% of our revenue in the first half of fiscal 2024 came from major intermediate customer, compared to 69% in the same period in fiscal 2023. Looking ahead, we remain committed to our five-point plan, which include: primarily focusing on Canadian gold drilling operation, prioritizing longer-term, specialized drilling contract with major and intermediate customer, pursuing international contract that offer attractive returns, continued investment in our driller training and computerized drilling technology, and building a team-oriented leadership structure that fosters collaboration and personal accountability. We believe by sticking to this plan, we will drive profitable growth and build shareholder value. That conclude our formal remarks for this morning. We will now welcome any question. Operator, please begin the question period. Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. If you would like to withdraw your question, please press the star followed by the two. Once again, to register for a question, please press star one. Apologies. There will be a brief pause while questions are being registered... Thank you. Our first question comes from Terry Bellina, a shareholder. Please go ahead. Yeah, thank you. In the quarter, what were the losses at Burkina Faso? The loss in Burkina Faso, in the quarter is approximately CAD 500,000. So, we stopped operation in December 2024. At the mine, we have one contract. Okay. The international operations without Burkina Faso, do those operations in the quarter, did they have positive adjusted EBITDA? Yes. We talk with Chile and Guyana. Yes, we have a positive EBITDA in Chile and Guyana in the quarter, and it was the same in Q1 also. Okay. We can say we expect to have a positive EBITDA from Chile and Guyana for Q3 as well. Okay. So as the ramp-up costs and start to decline, they can improve their Adjusted EBITDA because in the past it was mainly startup costs, ramp-up costs, and so forth, if I have that correct? Yes, that's correct. Mm-hmm. Another quick two questions on the Canadian sales impact of around CAD 10 million sales in the quarter. So would your fiscal Q3 have the normal sales amount that you usually get of around CAD 49 million, and then add the CAD 10 million that were missed in the Q2 or... Yeah, yeah. Would that be- You're right. Yes, you're right. Technically, the Q3 will be as the Q3 last year, roughly in Canada. Yes. Yes, that's correct. You see, in Q2, we have 1/3 of the revenue and drill meters in Canada. A third was lost based on the suspended project in Canada. So this should came back in Q3, and roughly in Canada, the revenue should be the same as Q3 last year, around. Okay. So it wouldn't be the CAD 49 million that you usually get, plus another CAD 10 million that you are getting back from Q2 to get something in the high 50s- No. -for Q3. You see, last year in Q3, we have roughly in Canada, CAD 38.5 million of income. This quarter, in Q2, we have CAD 29.6 million. So we should reach between CAD 30 million and CAD 34 million in Canada for Q3, probably, yes. It would be better- Mm-hmm. -but it won't be CAD 38.5 million as last year. Okay. Overall for the calendar year, 2024, for calendar year, 2024, would CAD 20 million-CAD 30 million adjusted EBITDA for the entire company be a realistic target? Hard to say, because Q1, well, okay, for the calendar year 2024- Yeah. This is a simple- The fiscal year is June, I know, but, yeah. Okay. I would say it's a target for us, but based on what we have actually, would... I would say CAD 20 million EBITDA, it's, it would be most of the EBITDA we could make in the calendar 2024. And that is with Canada, is it true, or am I correct that the profitability is solid, and the pricing is solid, and so the outlook for EBITDA is mainly from the international operations, not helping as much? In Canada, the demand is still strong. We have space to add between CAD 10 million-CAD 15 million of revenue if the demand is there in Canada. Principally in Chile, the demand is strong. We should have at least CAD 25 million-CAD 30 million of income again in Chile in 2024. So I would say we should have an increase of income in 2024 calendar year of anywhere from 5%-10%. Mm-hmm. Okay. Those were all my questions. Thank you. I appreciate it. Thank you very much, Terry. Thank you. As a reminder, to register for a question, please press star followed by the one on your touchtone phone. Our next question comes from Sarah Heberle from Mill Road Capital. Please go ahead. Your line is open. Hi, thanks for taking my question. Hi, Sarah. I know that for the second half of calendar 2023, the juniors fell to only 10% of your revenue, which was a significant decline from 31% of your revenue in the first half of the year. Could you just elaborate on what you're seeing in terms of activity from the juniors currently, and what your expectations for them are in calendar 2024? And do you expect their drilling activity to continue to decline in 2024 versus 2023? Pierre Alexandre speaking. I would say, of course, like you noticed, the financing for junior company had been reduced. It's pretty hard for a junior company to raise money. And there are some companies that are, you know, specific project that are quite good. Those could finance, but I would say that, this had been – our revenue had been reduced because of this, and the major company are reducing their exploration money spent on exploration. But for the definition drilling and some of the. Most of the major company are still spending money on definition drilling, you know, for their deposit. And there is some exploration, of course, like I said, that had been cut, too. But it seems to be, especially in the gold mining, we don't feel that it's the same, I would say. And, for, for gold and copper, you know, of course, there's some exploration money that had been cut in exploration, but they are still keeping going with good, number of meters we drill. Okay, thanks. So it sounds like then the definition Drilling has increased adequately to make up for the reduction in exploration in Canada? Right. Right. Got it. Because, you know- Okay, and you- Gold producers are still doing good money because of the gold price, copper, too. Of course, there's, Got it. I would say in lithium, there's a, there was a, I shouldn't speak in the past, but there is, there is still, you know, some movement over there. But, like, you know, the lithium price had been reduced a lot, and, we feel that there's a reduction of drilling in lithium, too. So they just maintain the project as the, that they, that they are putting into, I would say, to... The, the, they spend the money that they have to spend for their exploration budget, but there is not more money coming to this project. So I couldn't tell from now if this project, you know, like in Quebec, would go into production. There is some, I talk, I still talk about lithium. There is some that are keep going, but with the reduction of the lithium price, we feel that there's a reduction of spending in the drilling to the exploration. Got it. And so I guess despite that backdrop, did I hear correctly earlier on that you still expect your, your revenue from Canada to hold up? We expect in Canada to have, let's say, I, I talk about the calendar year 2024. We should have an increase of between 5%-10% in Canada. Yes. Thanks. That's all from me. Thank you, Sarah. Thank you. Thank you. We have a follow-up question from Terry Bellina, a shareholder. Thank you. Yes, thank you. The company, if I have it correctly, is capable of doing CAD 40 million-CAD 50 million adjusted EBITDA in a good year. That would be on, let's say, CAD 250 million of sales, a little bit higher pricing, 20% EBITDA margin. And so, other companies that are in the industry must be seeing that also. And, would it be something that management would think about, or would the company not be something for sale, at let's say below CAD 1 stock price? I mean, would the management sell at something below CAD 1 Canadian share price? As you know, Terry, the all drilling company actually are very low. The stock price is very low, and we don't- ... make exception to this. But, we don't have any capability on that. The only thing we can do, it's concentrated on our plan, saying increase, drilling activity in Canada on with major customer, on specialized drilling and, and, focus, to have a, a margin of 20% on, on each contract and work hard on this. And, the good news is, Chilean operations since calendar, since January 2023, make, a positive EBITDA. They made, a margin now, around 20%. So we're, we are on track for that. The price of the share unfortunately, is under CAD 1, and, the market is very, bad with all the drilling company, unfortunately. Yes. I saw that. Yeah. The industry, even though the gold price is staying around the $2,000, the gold miners are not near their highs. And so, I've been watching that too on the chart. It's usually they zig and zag together, but, like, they haven't been doing that for the last while. To a follow-up on that, on my question, so would management be open to being acquired since it might be... It might help the stock price in the short term, or is management more focused on waiting for the turn and looking at the CAD 40 million EBITDA possibilities, CAD 50 million EBITDA possibilities? Well, it's something that we are always, you know, to get acquired is something that we always look for. But, you know, at this price, at this stock price, I couldn't see what type of deal we couldn't, we could do, you know, because, no, no. What we want to do for now is not focusing on, on be acquired or do a deal with someone else. We need to focus on our five point, you know, and get the company to pay its debt and get better financial results. You know, that's what we're looking for for now. Okay. It might take some time, but we will be there sometime too. I'm very optimistic on this. Okay. You know, our team is very- Um, one- Our team is young, you know. We are training, you know, drillers, but we are training to management, and we're going to there. Okay. Lastly, would you repeat or clarify how January and February, not February, but you said January, things are back to a normal sales and margin for Canada and for international also. Did I hear that correctly, or- Yes. Or was that? Okay. Yes, yes. We have, as I said, there's the number of meters we do. In Canada, we do in surface, 48,000 m, and we expect to at least have 1/3 of that, so around 75,000 m. So at the end, that means the quarter should be at least between CAD 30 million and CAD 34 million in Canada of income, instead of CAD 29.6 million in Canada, as we have in Q2. But as I said, Q2, 2023 was CAD 38.5 million, which we won't reach in Q3 this year. It should be over CAD 30 million, somewhere CAD 30 million, CAD 33 million, CAD 32 million in Canada, in Q3 of this year. Okay. And what, what is the guidance for the adjusted EBITDA for Q3? Was that said? With this level of income, which is probably something around Q1 2024. In Q1 this year, we reached CAD 3 million EBITDA with CAD 33 million of income in Canada. That should be around that in Q3. So technically, without the pressure of West Africa, we should have an EBITDA around the one in Q1 this year, so around CAD 3 million. Mm-hmm. Okay. Yeah, the other questions were answered. Those were all my, all my questions. I appreciate it. Thank you. Thank you, Terry. Thank you. Thank you. There appear to be no further questions. I'll return the conference back to you. Thanks to everyone participating today. We look forward to speaking with you again after we report our fiscal third quarter results in the spring. Thank you, ladies and gentlemen. This does conclude today's conference call. Thank you all for attending. You may now disconnect your lines.