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DISCLAIMER
This document has been compiled from information provided by the Directors of Master Drilling Group Limited (Master Drilling, Master Drilling Group or the
Company) and from publicly available sources, and involves elements of subjective judgment and analysis, which may or may not be correct, and have not been
independently verified.
Accordingly, Master Drilling and its Advisors accept no responsibility for the correctness or otherwise of the content set out herein and no representation or warranty,
express or implied, is being made or given as to the accuracy or completeness of the information set out herein. The information contained in this document is subject to
completion, revision, verification and amendment without prior notice and without liability to compensate or reimburse any party.
No representation or warranty, express or implied is, or will be, given by Master Drilling or its Directors, Partners, Employees or Advisors or any other person as to the
accuracy, completeness or fairness of this document and, so far as permitted by law and except in the case of fraud by the party concerned, no responsibility or liability
whatsoever is accepted for the accuracy or sufficiency thereof or for any errors, omissions or misstatements negligent or otherwise relating thereto.
Master Drilling shall only be bound by those particular representations and warranties set forth in definitive written transaction documents, when and if such transaction
documents are executed and subject to such restrictions and limitations as may be contained therein.
This document may include certain statements, estimates, targets, forecasts and projections provided by Master Drilling. Such statements, estimates, targets, forecasts
and projections reflect significant assumptions and subjective judgments and analysis by Master Drillings management concerning anticipated future events which may
or may not prove to be correct and there can be no assurance that any estimates, targets, forecasts or projections are attainable or will be realised. Nothing contained in
this document is, or shall be relied upon as, a promise or representation, whether as to the past or the future. Accordingly, (subject as aforesaid) neither Master Drilling
nor its Directors, Partners, Employees or Advisors nor any other person, shall be liable for any direct, indirect or consequential loss or damage suffered by any person
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representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any estimates, targets, forecasts or projections
contained in this document (or otherwise provided by or on behalf of Master Drilling with respect to the subject matter of this document). In all cases, interested parties
should conduct their own investigation and analysis of Master Drilling and the information contained in this document before making any decisions.
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of an offer to purchase or subscribe for, any securities of the
Company or any other entity, nor shall the information contained in this document or the fact of its distribution form the basis of, or be relied upon in connection with, or
act as any inducement to enter into, any contract or investment decision in relation thereto.
The document is not an offer of securities in the United States. The securities of the Company have not been and will not be registered under the US Securities Act of
1933, as amended (the "US Securities Act"), and may not be offered or sold in the United States absent registration under, or an exemption from the registration
requirements of, the US Securities Act.
The distribution of this document may be restricted by law and persons into whose possession the Information comes should inform themselves about and observe any
relevant restrictions.
This document is not intended to provide, and should not be relied upon for, or as, accounting, legal, tax advice or investment recommendations. You should consult
your tax, legal, accounting or other professional advisors about the issues presented in the Information.
This presentation and the documents provided with this presentation are confidential and may not be disclosed to any third party without the prior written consent of
Master Drilling.
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AGENDA
Group overview
Investment highlights
Corporate strategy
Operations
Historical financials
Order book
Share price
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GROUP OVERVIEW
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GROUP OVERVIEW
1986: founded raiseboring operations in South Africa with two raisebore machines
Global leader in raiseboring market and other specialised drilling services
Operates 158 drilling rigs globally, including
South Africa
Zambia
DRC
Mali
Mexico
Peru
Brazil
Chile
One of the largest fleets of raisebore machines worldwide
Total of 67 slim drill rigs in operation
surface and underground diamond drill
reverse-circulation rigs
Head office in Fochville, South Africa.
engineering facility manufactures most consumables and parts for global fleet within
same complex
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www.masterdrilling.com
2001
2002
First hole for HG380 begins at Anglo Platinums Amandelbult mine (501m x 4.5m diameter)
Acquired entire fleet of boxhole machines from RUC
2003
HG380 machine completed 4.5m diameter and 500m length hole at Amandelbult
Introduced stope long-hole drilling project at Mponeng mine
2004
2005
2006
Drilled Europes deepest 4m hole with HG380 machine at Tara Mines, Ireland (839m)
2007
New cutter design implemented and stope drill monorail system purposely built for Gold Fields Kloof 3
2008
2009
2010
2011
2012
2013
2014
www.masterdrilling.com
Reamer head
1
Working above and below surface, raisebore drilling machine drills pilot hole
Reamer attached in place of drill bit; head has series of tungsten-carbide cutters which cut rock
in circular motion
As drill string raised, reamer pulled up towards the surface, excavated rock drops down shaft
and is removed by standard LHD loader via tunnel
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INVESTMENT HIGHLIGHTS
1
GLOBAL RAISEBORE DRILLING
SPECIALIST WITH SUBSTANTIAL
GROWTH UPSIDE
2
SUPPORTIVE MARKET
CONDITIONS UNDERPINNED BY
ROBUST COMMODITY PRICES
3
PREFERRED EMERGINGMARKET EXPOSURE WITH
BENEFIT OF COUNTRY AND
COMMODITY DIVERSIFICATION
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WORLD-CLASS MANAGEMENT
EXPERTISE
INVESTMENT HIGHLIGHTS
EBITDA
140
35
120
30
100
25
US$m
US$m
REVENUE
80
20
60
15
40
10
20
2010
2011
www.masterdrilling.com
2012
2013
2014 - H1
2010
2011
2012
2013
2014
10
INVESTMENT HIGHLIGHTS
Global leader in
Niche drilling segment used extensively in on-mine development (ventilation shafts and ore passes) by
raisebore-drilling services
exiting producers
Raisebore drilling highly differentiated from exploration drilling:
insulated from mining capital cycle
major miners in production; not explorers
benefits from raising safety standards
more ventilation shafts
increasing mining capital intensity
extend existing operations rather than build new mines
Existing cash flowgenerative business
Solid cash flow-generative business since 1986 with significant growth history
Worldwide operations
Fully integrated
business model
Integrated business model including design, manufacture, service and operation of rigs
manufacture of bespoke rigs for customer demands
Good visibility on
future earnings
World-class
management expertise
Operational diversification Diversified exposure to mix of commodities and multiple emerging markets
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2013 - FY
Other
10%
Other
16%
Gold
31%
Iron Ore
1%
Gold
36%
Iron Ore
21%
Polymetallic
17%
Platinum
7%
Polymetallic
11%
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Copper
16%
Copper
16%
Platinum
14%
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Rest of the
World Rest of Africa
1%
8%
Rest of Africa
13%
South Africa
31%
Latin America
49%
South Africa
36%
Latin America
60%
2014 H1
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2013 FY
13
2014-H1
2013 - FY
Capital
stage
13%
Capital
stage
19%
Exploration
stage
9%
Exploration
stage
4%
Production
stage
77%
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Production
stage
78%
14
Client base primarily comprises blue-chip major and mid-tier mining companies
AFRICA
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LATIN AMERICA
15
www.masterdrilling.com
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Management team uses variety of key performance indicators (KPIs) to monitor performance against
targeted objectives:
Achieved and targeted performance metrics reviewed by senior management on quarterly basis
2009
2010
2011
2012
2013
2014 H1
68
65%
73
80%
78
80%
88
71%
88
77%
91
76%
83 671
82 651
98 128
108 847
117 047
111 303
40
39%
43
23%
54
58%
64
51%
74
54%
67
50%
ARPOR (US$)
43 228
71 874
51 705
34 293
50 740
58 570
**Note that Total raise bore rigs from 2009 2012 includes support equipment
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TYPE OF MACHINE
REVENUE
ARPOR
US$
US$
NUMBER OF RIGS
UTILISATION
172 505
28 751
25.0%
Small
1 786 927
85 092
10
35.0%
Medium
7 802 800
80 441
17
95.1%
23 252 616
137 589
34
87.1%
X large
6 164 151
162 214
79.2%
XX large
1 166 300
97 192
100.0%
9 375 401
66 492
47
52.0%
1 987 116
37 493
20
44.2%
4 621 122
75 756
16
66.3%
Raiseboring rigs
44 966 421
111 303
91
75.9%
11 362 517
58 570
67
49.6%
Large
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19
140
180
162
120
160
120
100
94
93
67
40
63
53
68
46
10
2009
2010
Exploration stage
Large
100
X large
80
XX large
60
40
20
Blindhole drilling
15
20
12
110
50
33
11
65
Drill rigs
US$m
80
60
Medium
120
120
138
140
101
158
152
16
21
2011
18
2012
11
2013
12
3
2014 - H1
Other
0
2009
2010
2011
2012
2013
2014 H1
Production stage
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Assets
Total non-current assets
Total current assets
Total assets
Equity
Equity
Non-controlling interest
Total equity
Liabilities
Total non-current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
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2014 H1
2013
99 920 743
15 171 433
115 092 176
91 867 551
14 250 534
106 118 085
18 484 601
38 345 206
56 829 807
171 921 983
21 015 693
35 286 847
56 302 540
162 420 625
COMMENTS
Gearing ratio
(total debt/total equity): 19.4%
(2014 - H1) and 22.4% (2013)
Current ratio
(current assets/current liabilities):
1.70 (2014 H1) and 1.91 times
(2013)
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HISTORICAL FINANCIALS:
COMPREHENSIVE INCOME (US$m)
2014 H1
Unaudited
2013 H1
Unaudited
65 187 683
54 055 183
Cost of sales
Gross profit
21 330 499
19 198 958
39 758 193
706 319
759 358
891 774
(8 726 054)
(8 200 803)
Operating profit
13 310 764
11 757 513
22 543 006
461 819
866 307
1 473 911
(693 540)
(1 513 665)
(1 926 791)
13 079 043
11 110 155
22 090 126
Taxation
(3 732 038)
(3 380 680)
(6 294 382)
9 347 005
7 729 475
15 795 744
(465 826)
(9 802 981)
(465 826)
(9 802 981)
8 881 182
(2 073 506)
3 232 782
Revenue
Investment revenue
Finance costs
15 795 744
COMMENTS
income
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8 426 106
7 635 451
15 127 395
920 899
94 024
668 349
8 881 182
(2 073 506)
3 232 782
7 960 283
(2 167 530)
2 564 433
920 899
94 024
668 349
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ORDER BOOK
140 000 140
000
Other
Iron Ore
Coal
US$m
80 000 000
80
Chrome
60 000 000
60
Platinum
Diamonds
Zinc
Tin
40 000 000
40
Silver
Gold
Copper
20 000 000
20
Poly Metalic
-0
2014
www.masterdrilling.com
2015
2016 onwards
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CORPORATE OFFICE
Master Drilling Group Ltd
4 Bosman Street
PO Box 902
Fochville
2515
South Africa
Telephone:
Email:
info@mdilimited.com
www.masterdrilling.com
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