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1. Company Snapshot

1.a. Company Description

Foraco International SA, together with its subsidiaries, provides drilling services worldwide.It operates through two segments: Mining and Water.The company offers its drilling services to the mining and energy industry, such as exploration, development, and production related underground water drilling services.


It also drills wells for drinking, irrigation, industrial water, and dewatering wells; and undertakes a range of projects, including village water drilling programs, specialized drilling projects to access mineral water using sanitary protection methods, and large diameter well fields for residential supply in urban environments, as well as provides inspection, servicing, and rehabilitation services for existing wells.As of December 31, 2021, the company operated 302 drill rigs, including 62 rotary drilling rigs, 190 core diamond drilling rigs, 18 combination rigs, and 32 underground rigs.It serves mining companies, governmental organizations, and international development funds.


The company was founded in 1961 and is headquartered in Marseille, France.

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1.b. Last Insights on FAR

The recent 3-month performance of Foraco International SA was negatively impacted by a 29% decline in revenue to US$55.0m in Q1 2025, missing expectations. This downturn was likely exacerbated by the company's failure to provide a clear outlook for the remainder of the year. Furthermore, the absence of a strong earnings beat in Q1 2025 suggests that Foraco International SA may be struggling to maintain its growth momentum. The company's recent management changes, including the appointment of Enrick Tremblay as Vice President, Canada, may not have been enough to offset the negative impact of these factors.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Foraco International Secures Over US$60 Million in Long-Term Drilling Contracts with Tier-One Gold Producers in the Southwestern United States

Dec -05

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A Look At The Fair Value Of Foraco International SA (TSE:FAR)

Dec -02

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TSX Penny Stocks To Watch In November 2025

Nov -12

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Foraco International (TSX:FAR): Margin Decline Tests Value Case Despite Low 7.6x P/E

Nov -01

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Foraco International Q3 Net profit, Revenue Fall

Oct -30

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Foraco International reports Q3 2025

Oct -30

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Foraco International Awarded Multiple Three-Year Drilling Contracts Totaling US$150 Million in Canada and Chile

Oct -28

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FORACO PROVIDES NOTICE OF 2025 Q3 RESULTS & CONFERENCE CALL

Oct -23

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Mining

Expected Growth: 5.5%

Growing demand for minerals, increasing investment in exploration and production, and adoption of advanced drilling technologies drive the growth of Foraco International SA's mining segment.

Water

Expected Growth: 5.5%

Growing demand for oil and gas, increasing mining activities, and rising need for water conservation in industries drive the growth of water well drilling and maintenance services. Foraco International SA's expertise in water well drilling and maintenance services positions it for success in this growing market.

7. Detailed Products

Drilling Services

Foraco International SA provides drilling services for mineral exploration, mine development, and production drilling. The company offers a range of drilling methods, including diamond drilling, reverse circulation drilling, and rotary air blast drilling.

Blast Hole Drilling

Foraco International SA offers blast hole drilling services for open-pit mining operations. The company's blast hole drilling services include drilling, blasting, and loading of explosives.

Water Well Drilling

Foraco International SA provides water well drilling services for municipal, industrial, and agricultural clients. The company's water well drilling services include drilling, testing, and development of water wells.

Geotechnical Drilling

Foraco International SA offers geotechnical drilling services for infrastructure projects, such as tunnels, foundations, and dams. The company's geotechnical drilling services include drilling, sampling, and testing of soil and rock formations.

Environmental Drilling

Foraco International SA provides environmental drilling services for contaminated soil and groundwater remediation projects. The company's environmental drilling services include drilling, sampling, and monitoring of contaminated sites.

8. Foraco International SA's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Foraco International SA is moderate due to the availability of alternative drilling services and equipment.

Bargaining Power Of Customers

The bargaining power of customers is low for Foraco International SA as the company operates in a niche market with limited competition, giving customers limited alternatives.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Foraco International SA as the company relies on a few key suppliers for drilling equipment and services.

Threat Of New Entrants

The threat of new entrants is low for Foraco International SA due to the high barriers to entry in the drilling services market, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Foraco International SA as the company operates in a competitive market with several established players, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.66%
Debt Cost 10.45%
Equity Weight 46.34%
Equity Cost 10.45%
WACC 10.45%
Leverage 115.79%

11. Quality Control: Foraco International SA passed 5 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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Alphamin Resources

A-Score: 5.8/10

Value: 6.0

Growth: 9.0

Quality: 8.0

Yield: 9.4

Momentum: 2.0

Volatility: 0.7

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Capital

A-Score: 5.5/10

Value: 7.6

Growth: 6.6

Quality: 4.9

Yield: 4.4

Momentum: 7.5

Volatility: 2.3

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Kenmare Resources

A-Score: 5.2/10

Value: 9.4

Growth: 6.1

Quality: 2.8

Yield: 9.4

Momentum: 2.0

Volatility: 1.7

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Griffin Mining

A-Score: 4.1/10

Value: 3.7

Growth: 5.1

Quality: 6.9

Yield: 0.0

Momentum: 7.0

Volatility: 1.7

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Foraco

A-Score: 3.9/10

Value: 7.4

Growth: 5.0

Quality: 4.9

Yield: 0.0

Momentum: 3.5

Volatility: 2.7

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Ferroglobe

A-Score: 2.8/10

Value: 5.0

Growth: 4.8

Quality: 1.6

Yield: 0.6

Momentum: 4.0

Volatility: 1.0

1-Year Total Return ->

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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

2.47$

Current Price

2.47$

Potential

-0.00%

Expected Cash-Flows