Investor Presentation Table of Contents I EXECUTIVE SUMMARY 1 II - - PowerPoint PPT Presentation

Investor Presentation

FORACO

C O N F I D E N T I A L

Table of Contents

I EXECUTIVE SUMMARY 1 II MINERAL DRILLING MARKET 3 III FORACO BUSINESS OVERVIEW 9 IV HISTORICAL KEY FINANCIALS 18 V STRATEGY GOING FORWARD 22

I Executive Summary

Executive Summary

 Foraco International SA (“Foraco”):

 Is the third largest global mineral driller in the world  Provides services across 22 countries and 5 continents  Grew via a series of successful targeted acquisitions and organic growth

 Foraco’s revenue base is closely linked to the evolution of exploration expenditures driven by commodities prices

 After a period of slowdown between 2012 and 2016, the market is steadily recovering  Market studies tend to confirm that this positive trend will continue before reaching an equilibrium

in 2023

 Foraco’s revenue exceeded market growth in 2017, 2018 and 2019 with +18%, +33% and +14%

growth respectively  Foraco is well positioned to benefit from the continuing recovery of the drilling services activity given:

 its new innovative services  the commodities it addresses  its long-standing presence and strong positioning in key markets  its capacity to adapt

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Key Highlights

BALANCED & GLOBAL GEOGRAPHICAL FOOTPRINT  Solid and balanced presence in all major mining markets across five continents allowing to optimize

• pportunities and mitigate market risks

1 DIVERSIFIED END MARKETS & ESTABLISHED LONG-TERM CUSTOMER RELATIONSHIPS  Diversified commodities portfolio mainly split between precious metals and base metals to mitigate risks on commodities  High quality customer base including all the blue-chip mining companies (“Majors”) reducing the client risk 2 ACKNOWLEDGED BARRIERS TO ENTRY  Majors require strong referencing, deep knowledge of procedures and good safety statistics  Enhanced technical and R&D capabilities  Geographical footprint (Brazil, Russia) 3 STRONG TRACK-RECORD IN ADAPTING COST STRUCTURE  Capacity to maintain EBITDA margin above 11% (average EBITDA during the 2013-2016 major downturn)  Swift adaptability of global cost structure supported by a lean and efficient organization 4 SEASONED MANAGEMENT TEAM  Experienced management team and employees with a significant stake (53%) in the business  Proven ability to lead and reshape the company during market downturns (no senior level turnover during down cycle) and upturns 5

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II Mineral Drilling Market

Delivering Drilling Solutions Across the Value Chain

Foraco offers tailor-made solutions through the whole mining cycle

Greenfield 9% Brownfield 12% Life of mine 79% Drilling Activity $ Volume 10x 1x 2 to 3 years 2 to 3 years 2 to 3 years 2 to 5 years 5 to 30 years Time Exploration Dewatering Geotechnical Metallurgical sampling Feasability study Pre- feasability study Greenfield Mining construction Life of mine extension

Mining revenue FY2019

MINING SERVICES EXPLORATION Geologically complex formations Harsh and Remote environments DEVELOPMENT Define quality and quantity of resource Geotechnical analysis Bulk sampling to validate metallurgical process PRODUCTION Delineating ore body Controlling or obtaining water Life of mine extension projects

DRILLING ACTIVITY AT EVERY STAGE OF THE MINE LIFE CYCLE

Source: Management

3

Contracts: Characteristics, Monitoring and Risks

CHARACTERISTICS

 Contracts typically used to range between 3 months and 1 year, during the

• downturn. Today, more and more clients ask for the optionality to extend their
• ngoing contracts (Rio, BHP, Teck…). Since 2017 and the market recovery, the

duration of the contracts now ranges between 1 year and 3 years  Invoicing is based on work performed and issued monthly  Contracts are based on (i) meterage and price per meter (ii) hourly rate for stand-by time

MONITORING

 Tender procedures follow a very rigorous process  Management considers that monitoring of contracts is key and implemented a strong financial reporting system  Monitoring the profitability of all its contracts is performed on a monthly basis

RISKS

 The Company is a pure player in the domain of drilling and does not perform the diagnostic and analysis of the geotechnical samples which it

• extracts. This role is performed by the clients thus limiting the risk of

litigation  There is a no history of claims  Contracts are signed by local entities and are denominated in local

• currencies. Local costs are mainly in the same currency as the contract

4

Overview of Competitive Landscape

Sources: Annual reports, Companies, Brokers, Factset estimates Notes: (1) Figures calendarized for Major Drilling at year ended December, 31; average USD/CAN exchange rate over the period / As per broker estimates for Boart Longyear as FY2019 annual report is not available yet (2) As of July 2019 (3) As of June 2019

DRILLING ACTIVITIES PROFITABILITY

 The market is highly fragmented with a small group

• f globally active companies

 Foraco has grown to become the 3rd largest global driller with around 5% share of the world’s mineral drilling fleet  Main global competitors rig count:

Boart Longyear 34% Major Drilling 32% Foraco 15% Capital Drilling 5% GeoDrill 3% Orbit Garant 11%

 Foraco is outperforming the market in term of

• profitability. The EBITDA for the period FY 2013 to FY

2019 as a percentage of revenue is as follows:

(30.0%) (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Major Drilling Boart Longyear Foraco

FY 2016 FY 2017 FY 2018 FY 2019 33% 36% 45% 48% 26% 31% 36% 39%(2) 32% 43% 46% 42%(3)

RIGS UTILIZATION RATE

EBITDA margin

(1)

5

World Mining Destinations

 South America (28%), Canada (15%) and Australia (14%) are the key mining markets  Foraco is well positioned in the top world mining regions with presence in Canada, in South America, in Europe and Russia, Africa and in Australia, regions representing 83% of the worldwide spending

FORACO’S GEOGRAPHICAL FOOTPRINT IN THE TOP WORLD MINING DESTINATIONS

US 9% China 5% Europe and mainland Asia (excl. Russia and China) 8% Pacific/SE Asia 3% Russia 5%

Europe / Russia 18% Africa 7% Foraco presence Foraco group headquarters Foraco regional headquarters Country shares in the worldwide market Foraco’s FY19 revenues by region Asia Pacific 18% South America (excl. Brazil) 6% North America 34% Brazil 17% Source: S&P « World Exploration Trends » - March 2019

Canada 15% Australia 14% Africa 13% South America 28% 6

Steady Recovery of Global Exploration Expenditures Since 2016…

EVOLUTION BY COMMODITY EVOLUTION BY GEOGRAPHY

 The business cycle bottomed out in 2016, expenditures are expected to progressively rise to reach an equilibrium which should occur in 2023  Relative market shares for the various regions will remain at current levels over the next decade. Latin America, Canada and China are the regions with the highest potentials  Due to the specificity of the market and onerous foreign investment rules, very little of the exploration in China is done by Western companies

Note: Includes expenditures on non-bulk and bulk mineral (i.e. bauxite, coal, and iron ore) exploration Forecast is based on a long-run price (inconstant 2018 US Dollars) of $1300/oz Au, $3.00/lb Cu, $7.00/lb Ni, $1.00/lb Zn, $0.80/lb Pb, $60/lb §U3O8 $50/t iron ore fines and $45 & $140/t for thermal & met coal Note: Includes expenditures on non-bulk and bulk mineral (i.e. bauxite, coal, and iron ore) exploration

 After the market downturn between 2013 and 2016, the drilling industry is recovering and is now in an upward cycle  MinEx estimates that global exploration expenditures will rise from $11.3bn in 2019 to $14.9bn in 2023  This equates to a 32% increase in real terms over the period

Source: MinEx Consulting October 2019

$0 $5 $10 $15 $20 $25 $30 $35 1975 1980 1985 1990 1995 2000 2019 US$Billion 2005 2010 2015

$11.3 b in 2019 $11.2 b in 2016 $34.9 b in 2012 $3.2 b in 2002 $23.7 b in 2008

Other Coal Iron Ore Diamonds Uranium Base Metals Gold

$11.3 b in 2019 $11.2 b in 2016 $34.9 b in 2012 $3.2 b in 2002 $23.7 b in 2008

$5 $10 $15 $20 $25 $30 $35 2019 US$Billion $0 1975 1980 1985 1990 1995 2000 2005 2010 2015 Rest of World FSU + Europe China Western Europe Africa Pacific / SE Asia Latin America USA Canada Australia Between 2012 and 2016 expenditures fell by 68%

Exploration is very much a "boom-or- bust" business

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…with Gold and Base Metals Remaining the Main Targets in the Coming Years

FORECAST EXPENDITURES AND DRILLING BY COMMODITY IN US$BN (2018-2023) FORACO’S REVENUES BY COMMODITY

 Gold and Base Metal continue to be the two main targets for drilling and will account for 83% of the meters drilled in 2023  These commodities represent a significant amount of Foraco FY2019 revenues (c.69% of Foraco FY2019)

Source: Management, MinEx Consulting Report

Base Metal 39% Precious Metal (Gold) 30% Water 11% Coking Coal 9% Iron Ore 7% Uranium and other 4%

FY2019 Revenues: US$205m

Gold Base Metal Iron Ore 5.0 5.9

0.0 1.0 2.0 3.0 4.0 5.0 6.0

2018A 2023E 3.4 4.6

1 2 3 4 5 6

2018A 2023E 0.6 0.8 2018A 2023E +19% +36% +37% % Change

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III Foraco Business Overview

Management 43% Employees 10% Float 47%

Foraco – The 3rd Largest Mineral Driller Worldwide

COMPANY OVERVIEW SHAREHOLDING STRUCTURE KEY FINANCIALS (US$M) & OPERATIONAL KPIS

World’s third largest fleet of mineral drilling rigs (62 rotary, 194 diamond, 18 combination, 28 Underground) Broadly-spread customer base including all the major mining companies Strong and experienced management team and employees with a significant stake (53%) in the business Listed on the Toronto stock Exchange (“FAR”) and headquartered in Marseilles (France) International workforce with a proven track record in geologically complex formations and extreme terrain 1,946 people at the end of 2019 Significant expertise in destructive and non- destructive drilling, as well as proprietary drill rig design capabilities Specialized in drilling in harsh environments and isolated locations including arctic, desert and mountainous terrain and thus has acquired a specific know how in remote locations logistics

in US$m, FYE 31/12 2016A 2017A 2018A 2019A CAGR 16A-19A Revenue 115.2 135.7 180.0 205.4 21.3% % Growth (16.4%) 17.9% 32.6% 14.1% EBITDA 7.1 12.1 18.1 29.3 60.4% % Margin 6.2% 8.9% 10.0% 14.3% EBIT (14.4) (6.7) 1.1 11.0 nm % Margin (12.5%) (5.0%) 0.6% 5.4% Net Debt 103.3 122.7 130.4 128.9 7.7% xEBITDA 14.6x 10.1x 7.2x 4.4x Rigs 302 302 302 302 0.0% % Utilization rate 33% 36% 45% 48% Employees (at YE) 1,536 1,526 1,882 1,946 8.2% Source: Management

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Acquisitive Strategy to Reach a Global Scale

HISTORIAL PERFORMANCE REVENUE ($M) 103 128 119 164 301 368 66 2007A 2008A 2009A 2010A 2011A 2012A 433 January ‘07: Connors Drilling September ‘08: North West Sequoia April ‘09: Mosslake Drilling Services April ‘10: April ‘12: April ‘10: ACQUISITION HISTORY November‘12: 3 RIGS ACQUIRED 8 5 50 90 22 15

Australia EDC: Russia AD: South America North America North America

GEOGRAPHY ADDED

Servitec: Brazil JND: Australia

115 NUMBER OF RIGS 119 180 192 108 308

2007 2008 2009 2010 2011 2012

Servitec & JND

Source: Management

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A Diversified Footprint Covering All Mining Markets

DIVERSIFIED FOOTPRINT AND BUSINESS STRONG CUSTOMER RELATIONSHIPS

Revenues by Commodity (FY19) Revenues by Geography (FY19) Revenues by Customer (FY19)

Majors & Multinational Institutions 88% Juniors 12% Asia Pacific 18% South America 23% North America 34% Europe / Russia 18% Africa 7%

 Broad spread of commodity exposure  No dependence upon any particular resource  Presence in all major mining markets  High quality, broadly-spread customer base including all the major mining companies

Base Metal 39% Precious Metal (Gold) 30% Water 11% Coking Coal 9% Iron Ore 7% Uranium and Other 4%

Source: Management

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A High Quality Customer Base – Focus on Top 5 Clients

OVERVIEW OF CONTRACTS

Contribution to Sales Start of contractual relationship Average duration

• f contracts

# rigs currently deployed with client FY19 FY18 14% 11% 2006 3 years 26 12% 8% 2009 4 years 11 8% 8% 2012 2 years 15 6% 4% 2012 1 year 18 5% 7% 2006 3 years 9 1 2 3 4 5

 No dependence at the global level  Foraco enjoys long term relationships with key clients

Top 5 Clients 38% Top 5 Clients 45%

Total FY18 Sales: US$180m Total FY19 Sales: US$205m

Yes 85.1% Yes 84.9%

Do you intend to work again with Foraco ? Would you recommend Foraco to peers ? Customer Satisfaction Survey

Source: Management

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A Seasoned and International Management…

Daniel Simoncini Chairman and Co-CEO Jean-Pierre Charmensat Co-CEO and CFO

 Director & CEO since incorporation  Over 30 years of industry experience  Based in Singapore  Director & Executive Officer since incorporation  Over 35 years of management experience  Based in Marseilles (France) Timothy Bremner SVP North America Denis Simonin VP Africa Thierry Merle VP Europe & Middle East Peter Jacobs SVP Asia Pacific Olivier Demesy VP Brazil Fabien Sevestre Deputy CFO Andreï Popov VP Russia and CIS To be named VP South America

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Direct Project Production 59% Direct Project Support 22% Indirect Facilities 11% Indirect / Other 1% SG&A 7%

… Relying on Experienced International Workforce…

EVOLUTION OF # OF EMPLOYEES AT YE SAFETY RECORD

3.34 2.39 1.58 1.66 2.17 1.64 1.57 2.23 1.97 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A

Last Time Injury Rate Trend (per 200,00 hours) Total Recordable Injury Frequency Rate (per 200,00 hours)

1,536 1,526 1,882 1,946 2016A 2017A 2018A 2019A 1.05 0.63 0.45 0.39 0.37 0.33 0.39 0.50 0.19 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A

2019 BREAKDOWN BY GEOGRAPHY 2019 BREAKDOWN BY FUNCTION

Asia Pacific 18% South America 23% North America 34% Europe / Russia 18% Africa 7%

Source: Management

14

… and Retained by a Stable Human Resource Policy

Sustainable Long Term Contracts Engaged and Empowered Employees Stable Employment Opportunities Class Leading HSEC (Health, Safety, Environment and Community) and Productivity Investment in Skills and Knowledge

15

A Versatile Drill Fleet

GLOBAL DRILL RIG FLEET

 A new rig has an operational life of 15 to 20 years and can be rebuilt every 10 years, regaining another decade

• f market life

 In 2019, the company invested c.7% of its revenue in capex

10% 39% 51%

<5 5 < Age < 10 >10

Drill Rig per Age (% of total fleet)

302 Drill Rigs

• 62 Rotary
• 194 Diamond
• 18 Combination
• 28 Underground

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Foraco is a Recognized Innovator and a Leader in Deep Directional Drilling

 Pioneered first wireless remote RC rig with fully featured Measure While Drilling (MWD)



Collects multiple drilling data points use by both drillers and geologists



Currently unmatched by any other drilling competitor  Awarded 2017 DMIRS Engineering Award of Merit  2019 has introduced next generation of remote RC (functional isolation/electronic exclusion zones)  This innovation will reduce drill times and enhance crew safety

… A TECHNIQUE WITH MULTIPLE ADVANTAGES

 Techniques and tools which allow to steer in 3D drilling through hard rock in order to follow a preset 3D trajectory  JV setup between Foraco and the Continuous Wedging Tool (CWT) to market and operate their tool in North America, Brazil, and West Africa



Significant cost and time savings when exploring deep targets



Planned intersections with defined separation



Fewer constraints on rig locations



Less underground development during exploration phase

EXPERTISE IN DEEP DIRECTIONAL DRILLING… LATEST INNOVATION: WIRELESS REMOTE CONTROLLED RC MWD RIG

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IV Historical Key Financials

23% 15% 8% 13% 6% 9% 10% 14% 18% 1% 4% 8% 4% 11% 15% 16% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 EBITDA Margin Gross Profit Margin

Long-term Trend Has Been Driven by the Cycle of the Mining Sector

LONG TERM TREND FY12-19 – REVENUE (IN US$M) LONG TERM TREND FY12-19 – EBITDA (IN US$M) AND GROSS PROFIT MARGIN

368 248 186 138 115 136 180 205 66 433 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Revenue CAGR FY16-19: +21.3%

Servitec & JND Restated from one off costs of US$21m in FY13, the EBITDA rate reached 24%

EBITDA CAGR FY16-19: +60.4% Gross Profit CAGR FY16-19: +90.9% Source: Management

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in US$m, FYE 31/12 2016A 2017A 2018A 2019A CAGR 16A-19A INCOME STATEMENT Revenues 115.2 135.7 180.0 205.4 21.3% % Growth (16.4%) 17.9% 32.6% 14.1% Gross Profit 4.6 14.4 21.9 32.1 90.9% % Margin 4.0% 10.6% 12.2% 15.6% EBITDA 7.1 12.1 18.1 29.3 60.4% % Margin 6.2% 8.9% 10.0% 14.3% EBIT (14.4) (6.7) 1.1 11.0 n.m. % Margin (12.5%) (5.0%) 0.6% 5.4% CASH FLOW STATEMENTS EBITDA 7.1 12.1 18.1 29.3 60.4%

• Var. of Working Capital

(5.8) 0.0 (6.8) (0.6) Other (1.3) (0.1) 0.1

• Cash from operations

0.0 12.0 11.3 28.7 n.m. Capex (6.5) (9.5) (12.7) (12.5) Free Cash Flow (pre interests and taxes) (6.5) 2.5 (1.4) 16.2 n.m. Rigs 302 302 302 302 0.0% Employees 1,536 1,526 1,882 1,946 8.2%

Historical Performance

Source: Management Notes: (1) Includes amortization and depreciation expenses related to operations; (2) Excluding financial interests and taxes

(1) (2)

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REVENUES (IN US$M) EBITDA (IN US$M) NET DEBT (IN US$M)

8.4 8.3 15.4 26.5 40.5 2015A 2016A 2017A 2018A 2019E

Key Competitors Comparison

137.7 115.2 135.7 180.0 205.4 2015A 2016A 2017A 2018A 2019A 238.8 228.0 253.2 286.1 320.6 2015A 2016A 2017A 2018A 2019E 735.2 642.4 739.1 770.2 774.6 2015A 2016A 2017A 2018A 2019E (115.3) 1.6 (36.6) 54.1 114.0 2015A 2016A 2017A 2018A 2019E 89.3 103.3 122.7 130.4 128.9 2015A 2016A 2017A 2018A 2019A (27.6) (18.7) (5.6) (12.1) (17.0) 2015A 2016A 2017A 2018A 2019E 576.4 675.8 598.9 682.6 723.2 2015A 2016A 2017A 2018A 2019E

Source: Management, Companies, Factset Notes: Figures calendarized for Major Drilling at year ended December, 31; average USD/CAN exchange rate over the period (1) As per broker estimates / LTM Jun. 2019 EBITDA of $79.5m; (2) As of Jun. 2019; (3) As of Oct. 2019

% of sales

0.2% (5.0%) (15.7%) 7.0% 18.1 7.1 12.1 18.1 29.3 13.1% 6.2% 8.9% 10.0% 14.3% 2015A 2016A 2017A 2018A 2019A 14.7% 3.5% 3.7% 6.1% 9.3% 12.6%

(1) (1) (2) (3)

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Backlog Evolution and Roll-Out

Total at 01/01 FY FY FY + 1 FY + 2 FY + 3 2018 (IN USDM) 2019 (IN USDM) 2020 (IN USDM)

128 41 32 134 78 32 201 Total 266 24

Roll-out

• 158

55 32 269 24 Source: Management

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V Strategy Going Forward

Strategy Going Forward: 5 to 7 Year Plan – Positioned for Growth

Prepared for Up Cycle 3: 2020 and Forward

 Take advantage of our strengths as market recovers  Continue to focus on quality and safety  Continue to attract, motivate and retain best employees  Continue to address all commodities  Leverage our presence in all significant markets to reinforce our position  Continue to focus on profitable growth  Continue to monitor capex and working capital requirements  Strengthen balance sheet:

 Reorganize existing debt  Take the opportunity of solid economic

activity to generate significant cash-flows

 Rebuild strong cash position and limit

debt to a reasonable level

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Disclaimer

This presentation (the “Presentation”) has been prepared by Foraco. Neither this Presentation nor any information contained herein may be used for any other purpose without the prior written consent of Foraco. This Presentation and its contents shall be kept strictly confidential and not be disclosed to any person other than its intended recipients. This Presentation has been prepared by Foraco on the basis of information provided by Foraco or in the public domain. It reflects prevailing conditions as of this date, all of which are subject to change. In preparing this Document, Foraco has relied upon and assumed the accuracy and completeness of all the information available. In issuing this Presentation, Foraco does not undertake to provide the recipient with access to any additional information or to update this Presentation or any other information provided in connection therewith or to correct any inaccuracies therein that may become apparent. Recipient of this Presentation shall conduct its own review and analysis and should consult its own advisers. This presentation is incomplete without reference to, and should be viewed solely in conjunction with an oral briefing provided by Foraco.

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