RE:td action note today Event Geodrill reported Q4/21 financial results. Adjusted EBITDA of $7.3mm was 3.5% above our $7.1mm forecast, reflecting stronger-than-expected margins of 27.3% (TD: 25.1%), partially offset by lower-than-expected revenue. Impact: SLIGHTLY POSITIVE Q4/21 results were a solid finish to a record year for GEO and we are encouraged by management's 2022 outlook, which highlights an "exceedingly positive" drilling environment. The company is entering 2022 with several new contracts, which underpin more than $130mm of revenue across 2022-2026 and has plans to add seven additional rigs by the end of 2022 (~10% fleet growth). We anticipate that the new rigs will be put into service quickly, with Geodrill effectively operating at full utilization currently. Management noted that globally, Peru is the only region with available capacity, but it is actively bidding on jobs currently, which could see those rigs spoken for. In our view, the current inflationary environment and shortage of skilled labour does present a near-term headwind. However, we believe that the demand environment is sufficiently strong to support price increases. Q4/21 revenue of $26.7mm increased 8% y/y, but was 5% below our estimate of $28.1mm, reflecting the drilling mix in the quarter. FY2021 revenues of $115.2mm were a record for Geodrill, reflecting the robust drilling environment, expanded service offering, and new customer wins. During the year, Geodrill successfully expanded into South America and Egypt and anticipates that these two markets will represent new growth verticals. Geodrill currently has 71 drill rigs in its fleet, the largest fleet it has ever operated (66 available for operations and five in the workshop). Q4/21 gross margins of 24.3% were 265bps below TD's estimate of 26.9%, reflecting drilling mix and higher-than-anticipated rig repair and maintenance costs as the company front-loaded costs to get ready for a very active calendar 2022. TD Investment Conclusion In our view, Geodrill is a high-quality driller that is doing a good job growing its geographic footprint, expanding its service offering, and winning new senior mining customers. We believe that GEO is well-positioned to capitalize on the resurgence in drilling activity, with gold at supportive prices for new project development/ exploration. Gold customers represent ~95% of Geodrill's revenue.