Orbit Garant 2012 annual rep O rt 29 or available on acceptable terms in an amount suffcient to fund Orbit Garants needs This could in turn have a material adverse effect on the business fnancial condition and results of operations of Orbit Garant At the end of June 30 2012 the Company complied with all covenants Access of customers to equity markets Economic factors may make it more diffcult for mining companies particularly junior mining companies to raise money to fund exploration activity This diffculty would have an adverse impact on the demand for drilling services and could have a material advers e effect on the fnancial performance fnancial condition cash fows and growth prospects of the Company Acquisitions The Company is continuously seeking business acquisitions It may be exposed to business risks or liabilities for which it may not be fully indemnifed or insured The ongoing integration of existing and new computer systems equipment and personnel may impac t the success of the acquisitions Any issues arising from the integration of the acquired businesses including the integrati on of the accounting software may require signifcant management fnancial or personnel resources that would otherwise be available for ongoi ng development and expansion of the Companys existing operations If this happens it may have a material adverse effect on the fnancial performance fnancial condition cash fows and growth prospects of the Company Supply of consumables The Companys strong growth could place pressure on the ability of Soudure Royale and Orbit Garant Ontario to manufac ture and deliver to the Company new drills and consumables Any negative impact on the ability of Soudure Royale and Orbit Garant Ontari o to deliver their products may constrain the Companys ability to increase its capacity and increase or maintain revenue and proftability Competition The Company faces considerable competition from several large drilling services companies and many smaller regional competi tors Some of the Companys competitors have been in the drilling services industry for a longer period of time and have substantially greater fnancial and other resources than the Company Increased competition in the drilling services market may adversely affect the Companys current market share proftability and growth opportunities The capital cost to acquire drilling rigs is relatively low enabling c ompetitors to fnance expansion and providing opportunity for new competitors to enter the market Thi s dynamic exposes the Company to the risk of reduced market share and scope for geographic growth as well as lower revenue and margi n for its existing business A signifcant portion of the drilling services business is a result of being awarded contracts through a competitive tender proc ess It is possible that the Company may lose potential new contracts to competitors if it is unable to demonstrate reliable performance technical competence and competitive pricing as part of the tender process or if mining companies elect not to undertake a competitive tender proces s Inability to sustain and manage growth The Companys revenue has grown in recent years as a result of the combination of Orbit and Garant the acquisition of Drifts Forage Orbit Garant Ontario Lantech Drillling and an increase in demand for drilling services The Companys ability to sustain its growth will depend on a number of factors many of which are beyond the Companys control including but not limited to commodity prices the ability of mining companies to raise fnancing and the demand for raw materials from large emerging economies such as the Brazil Russia India and China BRIC economies In addition the Company is subject to a variety of business risks generally associated with growing companies Future growth and expansion could place signifcant strain on the Companys Management personnel and likely will require the Company to recruit additional management personnel There can be no assurance that the Company will be able to manage its expanding operations including any acquisitions effecti vely that it will be able to sustain or accelerate its growth or that such growth if achieved will result in proftable operations that it will be able to attract and retain suffcient management personnel necessary for continued growth or that it will be able to successfully make strategic investments or acquisitions The failure to accomplish any of the foregoing could have a material adverse effect on the Company s fnancial performance fnancial condition cash fows and growth prospects Future acquisition strategy The Company intends to continue to grow through acquisitions in addition to organic growth There is considerable competition w ithin the drilling services industry for attractive acquisition targets It is not possible to ensure that future acquisition opportu nities will exist on acceptable terms or that newly acquired or developed entities will be successfully integrated into the Companys operations A dditionally the Company cannot give assurances that it will be able to secure the adequate fnancing on acceptable terms to pursue this strategy