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Geodrill Limited T.GEO

Alternate Symbol(s):  GEODF

Geodrill Limited is an Isle of Man-based exploration drilling company with a fleet of 76 drill rigs operating in Africa and South America. The Company operates in two continents and seven countries, namely Ghana, Burkina Faso, Cote d’Ivoire, Mali in West Arica; Egypt in North Africa; and Peru and Chile in South America. The Company provides Reverse Circulation, Diamond Core, Deep Directional Navi Drilling, Air-Core, Grade Control, Geo-Tech and Water Borehole drilling services to intermediate and junior mining companies and operates a fleet of multi-purpose rigs in Africa. Its fleet stands at 76 drills and is made up of nine types, including EDM 2000 multi-purpose (qty. 6), Sandvik DE 810 multi-purpose (qty. 11), Sandvik DE 740 core (qty. 10), Sandvik DE 710 core (qty. 10), X1200 Multi-Purpose (1), X900 Multi-Purpose (17), Austex X350 RC / Grade Control (qty. 2), Austex X300 Air-core (qty. 7) and LM90 (qty. 7).


TSX:GEO - Post by User

Post by DeepValueAlwayson Nov 01, 2023 6:38pm
318 Views
Post# 35712333

Oversold!

Oversold!Let’s think about this the CEO owns 40% of the company and has grown the business over 25 years. ? Other mgt and board members own a good chunk of the business as well, and I only see one sale at prices much higher. Maybe this is the year they go bankrupt. I highly doubt it as they have been increasing revenue each quarter YOY for the last few years, of course except for the coming Q. We will be about 5M short, which don’t forget is usually their worst Q and we had a terrific Q last year. The CEO stated they would miss last year’s number by a million or so, he was off by a few million. They have been firing on all cylinders and hit a soft pocket imo, due to a strategic move. They trade at an insane 5 months of revenue, less than half tangible book and less than 2x EBITDA. Intelligently diversifying away from Africa and focusing on senior minors. Right now, 95% of the drilling comes from gold. Gold last checked is close to 2K usd. A small percentage of shares brought the share price down roughly 30% in 2 days. Yes, they cut the dividend and will revisit, next year, but maybe smart at these levels to buy back shares or preserve cash for some negative possible outcomes. Not believe they are able to start buying 2 days after Q3 results. I sure would prefer that to the second half of the year’s dividend. The A/R provisions should be up to around 6M with this quarter’s additions, off memory. So, about 40% set aside for the receivables due 90days or more. We were still net cash last quarter and should be able to cover 100% of the A/R that is over 90 days and have some left over, in the unlikely case we receive goose eggs. They have been booking long-term contracts with some solid senior minors which should protect them even if we have a major slow down. Having a 30M +- a million quarter is not terrible, especially with them pulling out of a country that once accounted for 30% of revenue. First Q next year the CEO says we will see the benefits of the move, I am hoping we venture more outside of Africa. We should for sure get a rerating at these levels if a higher percentage comes from outside. We are pretty darn cheap. Disclosure have been buying a little aggressive the last 2 days more than doubling my position.

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