RE:RE:RE:Completely undervaluedHey Screamer,
Thanks for posting. This article infers that Geodrill is the best drilling operator. Not an expert in this field, but they might have benefited from competitors leaving the region in the last years. Major did wind down Burkina a couple of year ago. And OGD had some recent legal problem now successfully resolved. And wonder if Boart Longyear is operating there with their financial problems. And from what I understand, margins on international business are typically running at 30-50% as compared to margin in, let say Canada, where they run lower because of competition.
So now, they are expanding internationally out of their sub saharian African area of expertise (Egypt and Peru). What is their secret sauce that will enable them to get better margins than competitors now that they are out of their home turf ? Finding good crews seems to be challenging as it was mention in MDI, OGD and FAR conference calls.
And local competition might intensify, OGD is mobilizing for a big contract in Guinea, right in their backyard.
Anyway, believe that all the drillers are pretty good investments right now right at the beginning of the cycle. And Boart still has to finalize their reorganization plan (98.5 % dilution, poor shareholders) which leaves the field open to all. Incidentally, MDI was able to pick up a pretty nice Australian operation quite cheaply but still too expensive for all the other players.
So, if one was to find some spare changes (or mortgage the farm) or selling other positions, why GEO instead of the others ? The founder owning 40% is a big plus, but I am always cautious whenever I hear about diversification…
GLTA