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1. Company Snapshot

1.a. Company Description

Major Drilling Group International Inc.provides contract drilling services for mining and mineral exploration companies.The company offers a suite of drilling services, including surface and underground coring, directional, reverse circulation, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive, longhole drilling, surface drill and blast, and related mining services.


The company was founded in 1980 and is based in Moncton, Canada with additional offices in Mexico, South America, Asia, Africa, USA, and Australia.

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1.b. Last Insights on MDI

Major Drilling Group International Inc.'s recent performance was driven by a 20.8% increase in revenue to $226.6 million in Q1 2026, with an adjusted gross margin of 25.2%. The company's strong financial results were fueled by a 19.3% year-over-year revenue growth. Additionally, the Toronto Stock Exchange accepted its notice of intention to make a normal course issuer bid to purchase outstanding common shares, indicating a positive shareholder value proposition. The company's solid quarterly results and share buyback program underscore its financial strength.

1.c. Company Highlights

2. Major Drilling Posts Mixed Q4 Results Amid Economic Uncertainty

Major Drilling reported a mixed Q4 2025 performance, with revenue rising 11.6% year-over-year to $187.5 million, driven by strong activity in South and Central America. However, profitability metrics weakened, as adjusted gross margin declined to 22.8% from 26.9% last year, weighed down by start-up and mobilization costs. Adjusted EBITDA dropped to $20.5 million from $25.3 million, and net earnings fell to $1 million, or $0.01 per share, missing consensus estimates of $0.07 per share. The company ended the quarter with $3.9 million in net debt and $123 million in liquidity, providing a cushion for future investments.

Publication Date: Jun -16

📋 Highlights
  • Revenue Growth: Revenue rose 11.6% to $187.5 million, driven by strength in South and Central America.
  • Gross Margin Decline: Adjusted gross margin fell to 22.8% from 26.9% due to start-up and mobilization costs.
  • EBITDA Drop: EBITDA dropped to $20.5 million from $25.3 million, reflecting higher operational costs.
  • Net Debt and Liquidity: The company ended with $3.9 million in net debt and $123 million in liquidity.
  • CapEx and Fleet Update: Capital expenditures totaled $18.6 million, adding 7 rigs and disposing of 4 older ones.

Financial Performance Details

G&A costs increased by $3.5 million, reflecting the integration of the Explomin acquisition and higher wage expenses. Capital expenditures for the quarter totaled $18.6 million, with the addition of 7 new rigs and the disposal of 4 older ones, bringing the total fleet to 708 drills. Management emphasized that the delayed mobilization of rigs, due to economic uncertainty, impacted the quarter's performance but remains optimistic about the upcoming fiscal year. CEO [CEO's Name] noted, "We are seeing increasing exploration budgets from seniors and intermediates, which bodes well for our specialized drilling solutions in 2026."

Operational Highlights and Outlook

Specialized drilling services accounted for 60% of revenue, with gold and copper projects contributing 41% and 35%, respectively. While juniors continued to face challenges, seniors and intermediates drove 92% of the company's revenue. Looking ahead, Major Drilling expects fiscal 2026 capital expenditures of $70 million and anticipates Q1 revenue to grow 20% year-over-year. Analysts are projecting revenue growth of 27.8% for the next fiscal year, signaling confidence in the company's ability to capitalize on rising demand for specialized drilling solutions.

Valuation and Investment Thesis

Trading at a P/E ratio of 21.6 and a P/B ratio of 1.4, the stock appears fairly valued given its growth prospects. The company's EV/EBITDA of 6.74 and free cash flow yield of 4.29% suggest that investors are pricing in the anticipated recovery in profitability. While the Q4 results were weaker than expected, the company's strong liquidity position and growing exposure to key commodities like gold and copper position it well to benefit from increasing exploration activity in 2026.

3. NewsRoom

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Major Drilling to Release Results for its Second Fiscal Quarter on December 10, 2025

Nov -27

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3 TSX Stocks Estimated To Be Trading At Discounts Of Up To 48.9%

Nov -25

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Zacatecas Silver Secures Community Access Agreement at Panuco and Signs Drill Contract with Major Drilling

Nov -10

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Major Drilling Announces Normal Course Issuer Bid

Oct -17

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Major Drilling Group International Inc.'s (TSE:MDI) Stock Has Seen Strong Momentum: Does That Call For Deeper Study Of Its Financial Prospects?

Oct -13

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Major Drilling Announces Results of Annual Meeting of Shareholders

Sep -10

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Major Drilling Group International First Quarter 2026 Earnings: EPS Misses Expectations

Sep -10

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Major Drilling Announces First Quarter 2026 Results

Sep -08

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.00%)

6. Segments

Contract Drilling

Expected Growth: 1%

Contract Drilling growth driven by increasing demand for drilling services from major mining companies, rising commodity prices, and expansion into new geographic markets. Additionally, Major Drilling's strategic acquisitions and investments in technology, such as autonomous drilling, have enhanced operational efficiency and competitiveness, contributing to the segment's growth.

7. Detailed Products

Drilling Services

Major Drilling provides drilling services to the mining industry, including surface and underground drilling, directional drilling, and reverse circulation drilling.

Camp Services

Major Drilling offers camp services, including camp construction, management, and logistics, to support remote drilling operations.

Water Drilling

Major Drilling provides water drilling services for mining and non-mining applications, including water supply and monitoring wells.

Geotechnical Drilling

Major Drilling offers geotechnical drilling services for site investigation, rock mechanics, and geotechnical engineering applications.

Environmental Drilling

Major Drilling provides environmental drilling services for contaminated site remediation, groundwater monitoring, and environmental monitoring.

8. Major Drilling Group International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Major Drilling Group International Inc. is medium due to the availability of alternative drilling services and equipment. However, the company's specialized drilling services and equipment may limit the threat of substitutes.

Bargaining Power Of Customers

The bargaining power of customers for Major Drilling Group International Inc. is low due to the company's strong market position and the lack of concentration among its customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Major Drilling Group International Inc. is medium due to the availability of alternative suppliers and the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Major Drilling Group International Inc. is low due to the high barriers to entry, including the need for significant capital investment and specialized expertise.

Intensity Of Rivalry

The intensity of rivalry for Major Drilling Group International Inc. is high due to the competitive nature of the drilling services industry and the presence of several established competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.34%
Debt Cost 3.95%
Equity Weight 94.66%
Equity Cost 12.16%
WACC 11.72%
Leverage 5.65%

11. Quality Control: Major Drilling Group International Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Major Drilling

A-Score: 4.7/10

Value: 3.8

Growth: 6.2

Quality: 5.0

Yield: 0.0

Momentum: 9.0

Volatility: 4.3

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Growth: 6.1

Quality: 5.8

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Momentum: 5.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.92$

Current Price

13.92$

Potential

-0.00%

Expected Cash-Flows