Geodrill Limited T.GEO

Oversold!

[DeepValueAlways]

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.

[drewmumaw]

Disclosure have been buying a little aggressive the last 2 days more than doubling my position. You doubled your position before waiting to hear what they have to say on the Q3 call? What if several Geodrill customers are facing significant capital raising issues and will never be able to pay their bill? The accounts receivable 90+ days is $13.5M. Those are some big goose eggs. Without a

[DeepValueAlways]

Yes I sure did, look that 13m, if it is a goose egg will be manageable especially with now 6m already set aside. They expressed concern last filing that a few of their customers were waiting capital raises. Well looks like it didn't go well. We are in a new world when trying to borrow money or raise capital. Don't believe they will be drilling for many more companies without rock solid

[drewmumaw]

Sounds good - thanks for your reply. Best of luck with your investment. I'm anxious to hear what they have to say on the Q3 call on November 13th.