Major Drilling Group International Inc.

Good morning, ladies and gentlemen. Welcome to the third quarter 2020 results conference call. I would now like to turn the meeting over to Denis Laroque, President and CEO. Please go ahead, Mr. Laroque.

Thank you. Good morning, everyone, and welcome to our third quarter call. With me is Ian Ross, our CFO. You should have received our results last night. If you haven't seen them, they're on our website at majordrilling.com. Before we get started, I'd like to caution you as usual that during this call, we'll be making forward-looking statements about future events or the future financial performance of the company. And these statements are forward-looking in nature and actual events or results may differ materially. First of all, I'd like to congratulate our Canadian group who won for the third year in a row this year's PDAC Safe Day Everyday Gold Award. in recognition of having worked over a million hours, lost time, injury-free. Our Canadian crews have now worked more than six million hours over five and a half years without a single lost time injury. The safety and well-being of our crews is our first and highest responsibility when we work on any project, and we work hard to earn the trust and support of our crews and we are pleased to see their success recognized by a group of our clients and peers through the PDAT organization. Now, regarding the third quarter, our results reflect a normal part of our operational pattern, as mining and exploration companies shut down operations, in some cases for extended periods over the holiday season. This quarter, we saw earlier shutdowns than last year, particularly in South America. Additionally, the company typically schedules substantial overhaul and maintenance work on its equipment during this slower period, which impacts margin. Despite this seasonal slowdown, we generated $2.7 million of EBITDA, and our net cash position remained positive at $4.5 million when you consider the impact of IFRS 16. During the quarter, capital expenditures were $8.8 million as we added two large drill and blast rigs, one underground rig, and support equipment in line with our specialized and diversification strategies. Also, we are continuing to improve the suite of services we offer our customers with new innovative solutions and improved equipment through increased hands-free rod handling capacity computerized rigs, and deep hole capacity. We have mutually beneficial partnerships in place with several of our senior customers to develop these innovative solutions. During the quarter, the company made the decision to close its operation in Colombia. As such, recorded a total charge of 3.6 million after tax, with 3 million of it being non-cash charges. The Colombian operations represented approximately 1% of the total company revenue year-to-date. Ian will take you through a summary of our quarter results, and I'll come back for the outlook.

Thanks, Denis. Total revenue for the quarter was $81.7 million, up 2% from revenue of $80.4 million recorded in the same quarter last year. The unfavorable foreign exchange translation impact for the quarter when comparing to the effective rates from the same period last year It's estimated at $1 million on revenue, with a negligible impact on net earnings. The results reflected a normal part of our operational pattern. The overall gross margin percentage for the quarter was 17.6% compared to 19.4% the same period last year. Earlier than expected shutdowns, particularly in South America, as well as our regularly scheduled overhaul and maintenance work, impacted results in the quarter. G&A costs were up $100,000 at $12 million when compared to the same quarter last year, The additional G&A costs from the NOREX acquisition were offset by the impact of the implementation of IFRS 16 and the closure of our Burkina Faso operations in the previous year. EBITDA was relatively flat at $2.7 million as compared to the same quarter last year. Despite the normal Q3 challenges, we were still able to generate positive cash flow from operations. The company recorded a restructuring charge of $2.1 million related to the closure of its Colombian operations. consisting primarily of non-cash charges totaling $1.5 million and cash charges of $600,000 for other closed-down costs, including severance. The income tax provision for the quarter was an expense of $300,000 compared to an expense of $1.9 million for the prior year period. The tax expense for the quarter included a write-down of $1.5 million in deferred tax assets related to the closure of the Colombian operations. Also, the tax expense for the quarter was impacted by non-deductible expenses and non-tax affected losses in certain regions, while incurring taxes in profitable branches. Net loss for the quarter was $9.9 million, or $0.12 per share, compared to a net loss of $15.9 million, or $0.20 per share, for the prior year quarter. In terms of our financial strength, we continue to have one of the most solid balance sheets in our industry. During the quarter, our net cash position now including $5.6 million in lease liabilities under IFRS 16, net of debt remains positive of $4.5 million. The decrease in the prior quarter related to the closing of our NOREX acquisition on November 1st. The company also spent $8.8 million on capital expenditures, including two large drill and blast rigs and one underground drill to our fleet, as well as support equipment in line with our diversification strategy. We disposed of 15 rigs, as we continue to focus on improving our fleet. With the addition of 22 rigs from the NORX acquisition, the total rig count is at 611. The new breakdown of our fleet and utilization is as follows. 310 specialized drills at 34%, 133 conventional drills at 29%, 168 underground drills at 48% utilization, for a total of 611 drills at 37% utilization. As we've mentioned before, specialized work, in our definition, is not necessarily conducted with a specialized drill. Therefore, we should also give you the breakdown of our revenue by type of work for the quarter. 63% specialized, 4% conventional, and 33% underground. Also, seniors and intermediates represented 87% of our revenue in Q3, while juniors were 13%. Despite gold maintaining prices not seen since the last upturn, junior financings remain challenging. However, we continue to foster our relationships with the senior and intermediates, allowing us to grow our market share with this customer base. In terms of commodities, gold projects represented 55% of our revenue, while copper was at 23% this quarter. With that overview on our financial situation, I'll now turn the presentation back to Denis to discuss the overall.