Geodrill Limited

Good morning, ladies and gentlemen, and thank you for standing by. For today's call, phone participants are in listen-only mode. Following the presentation, we will conduct a question and answer session, and instructions will be provided at that time for you. If anyone has any difficulties hearing the call, please press star followed by zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded on Monday, November 13th at 10 a.m. Eastern Standard Time. and is being broadcast live via the Internet. During today's call, management will make statements regarding management's expectations for the company's future financial and operational performance. These statements are considered forward-looking statements. Each forward-looking statement speaks only as of the date of this call, and actual results may differ materially from management's expectations for a variety of reasons. including market and general economic conditions, and the risks and uncertainties detailed from time to time in the company's CEDAR filings. I will now turn the call over to President and CEO of Geodrill Limited, Mr. Dave Harper.

Thank you, Operator. Good morning and welcome to General's Quarter 3, 2023 Quarterly Financial Results Call. I will begin with an overview of our operations and performance for the quarter. Our CFO, Greg Borsk, will then give us a more detailed review of our financial results, after which I'll discuss our outlook for the remainder of 2023 and beyond. In quarter three, Gerald faced headwinds on a number of fronts. I'll first begin with the repositioning of the rigs post the wind down of our Burkina Faso operations. This was met with slower-than-expected take-up of leads in other countries, which hit revenues and weighed on our costs. Well, from the outset, quarter three was always going to be a high bar. The call for revenue in the corresponding quarter a year ago surprised us to the upside. This was due to a peculiar rather late wet season. In quarter 3-23, this quarter just finished, Revenues were negatively impacted, firstly, by very low revenue in Burkina Faso, a country that was just exiting, and Mali, which was also slower than expected. And this was partially due to weather, inclement weather. It's also partially due to operations. It's partially due to capital markets. And when I say capital markets, I mean the difficulties faced with junior exploration companies are facing in today's challenging markets. Also, in South America, our Chile operations were completely shut down by the snow season. As a result, quarter three average utilization declined to 55% from what was 70% a year ago. This, in turn, drove meters down by 13%, which drove down revenues by 14%. Yeah, and that's all she wrote. Regarding margins, in quarter three, we were faced with some abnormal costs. In South America, we kept employees on in readiness for the post-winter ramp-up. The back story to this is that we recently secured contracts with new Tier 1 customers. We secured contracts with First Quantum Rio, which is a joint venture in Peru, and we've secured a contract with Antofagasta Barracks, which is a joint venture in Chile, which I'm pleased to report have since commenced operations and are both going well. In West Africa, the repositioning of rigs was met with higher costs and longer preparation times as we pivoted away from juniors and intermediates towards senior miners and tier one customers. Senior miners have higher specs in terms of with regards to training, health and safety, For example, automated rod handling systems that need to be built or retrofitted to the rigs in order to operate on their sites. And working for senior miners also comes with greater community relations issues. And all of these things cause delays. All of the above. Droid costs higher. Higher cogs are low revenue. Negatively impacted our margins. And that was that. The final piece with regards to financials was aging debtors. The aging debtor situation has triggered IFRS 9, which is a large non-cash provision that significantly affected our year-to-date profit, and I believe Greg Walsh will be speaking to this point a little bit more in detail. In any case, as a result of the foregoing and all other things considered, our board of directors took the prudent and necessary decision to suspend pending second semi-annual dividend. And this was purely communicated in a press release on the 31st of August. Unsurprisingly, the market reacted negatively, taking our market cap down by 25%, and we're currently trading at $1.80 a share. I'm just going to take a moment to reflect and remind investors that even after the provisions, our hardwood value is Canadian $3.20 a share, or U.S. $2.37 a share. The market cap today is now trading at effectively six months revenue on a 12-month trading basis. And at that point, I will pass the call over to Greg, our CFO, to review the financial highlights in more detail. Thank you, Greg.

Thank you, Dave. As a reminder, all figures are reported in U.S. dollars. We generated revenue of 30.3 million, representing a decrease of 4.9 million or 14% when compared to 35.2 million for Q3 2020.2. In our primary countries in Africa, being Ghana, Cote d'Ivoire, and Egypt, revenue increased on a quarter-to-quarter basis by 1.2 million. We had made the decision to wind up Burkina Faso and redeploy the rigs to other countries. And as a result, revenue decreased in Burkina Faso by 3.1 million in the quarter. Our gross profit for Q3 2023 was 5.8 million, being 19% of revenue compared to a gross profit of 10.9 million or 31% of revenue for Q3 2022. We recorded EBITDA of $600,000 or 2% of revenue for Q3 2023. This includes a $3.6 million non-cash expected credit loss provision. Excluding this provision, EBITDA would have been 4.2 million or 14% of revenue for Q3 2023. The net loss for Q3 2023 was $3 million or a loss of $0.06 a share. Again, excluding the provision, we would have reported net income of $600,000 or $0.01 per share in Q3 2023. Overall, we ended the quarter with net cash, excluding our right of use liability, of $3.6 million. With the gold price averaging $1,965 during Q3 2023, global exploration spending continues to be strong and provides strong fundamentals for the mineral industry going forward. At this point, I will turn the call back to Dave.