Orbit Garant 2012 annual rep O rt 3 P resident and CE Os message In fscal 2012 Orbit Garant ac hieved its ffth consecutive year of revenue growth since becomi ng a public company in 200 8 W e drilled 15 million metres in fscal 2012 a new high and generated r ecord revenue of 15 48 million up 212 from fscal 2011 Our revenue growth was driven by new drilling contracts higher average rev enue per metre drilled and our acquisition of Lantec h Drilling Inc during our second quarter However our gross margins and net earnings declined in fscal 2012 as we experienced lower than expected utilization rates in the second half of the year due to unseasonably warm temperatures in Marc h whic h impacted our drilling activities in Quebec and Ont ario and a decline in our junior mining company customers dri lling activity in our fourth quarter W hile we currently generate appro ximately 7 4 of revenue from senior and intermediate mining companies our junior mining company customers remain an import ant part of our business mix T he second half of our fscal 2012 year proved to be a diffcul t environment for our junior customers to access capit al and as a result some of these customers suspended or scaled bac k their exploration programs Our senior and intermediate customers continue to be very active an d indications are that they intend to remain active Further we currently derive appro ximately 75 of our revenue from goldrelated projects and gol d remains at historically high prices whic h should support continued active exploration and development W e entered fscal 2013 with 7 0 of our capacity booked for the year Our acquisition of New Brunswic kbased Lantec h Drilling not only enhances our core strengths but also expand s our horizons in support of our longterm growth providing Orbit Garant with a new operational hub in Eastern Canad a adding 32 drill rigs to our feet strengthening our team with highly skilled management drillers an d feld tec hnicians bringing us new expertise in iron ore drilling and geotec hnical services expanding our customer base and est ablishing for Orbit Garant a strategic entry point in the highermarg in mineral drilling market in W est Africa W e believe our computerized drilling control and monitoring solution s will be an import ant contributor to reducing both the labour and the consumable component costs of our mineral drilling operations going forward and to enhancing productivity Direct customer benefts of the tec hnology include realtime visibility of drilling progress and core s amples via the internet improved accuracy and consistency of results and det ailed performance reports on demand By the end of fscal 2013 we expect to have at least 3 0 drill rigs featuring our computerized monitoring and control tec hnology Despite current global economic uncert ainties we believe the longer term fundament als of our business remain positive W e have invested signifcantly in our growth platform over the past 24 month s enhancing our capacity our services and our geographic market presence W e have fortifed our core strengths and expanded our horizons Looking ahead we will focus on the aspects of our business that are in our control including improving our productivity increasing utilization rates cont aining costs and building value for our customers At yearend we had 6 03 million in working capit al and access to a revolving credit line with a major c hartered bank so we have the fnancial fexibility to pursue strategic growth opportunities in Canada and internationally as they arise In closing I would like to thank our employees for their dedication teamw ork and commitment to our shared values I am proud of their contributions And to our shareholders thank you for your continued s upport Eric A lexandre P R E S I D E NT AN D C E O Eric A lexandre President and Chief Executive Offcer