10MA Y 200801195158 major mining companies produce numerous different types of minerals and metals that diversifies their exposure to any one specific commodity. Major mining companies generally require drilling services across all stages of exploration, development and production since their holdings frequently range from development projects to mature producing mines. As such, major mining companies typically have a more stable exploration budget in comparison to intermediate and junior mining companies due to cash flow from existing mining operations. The drilling activity of major mining companies is typically focused more towards the development and production stages of the mining process, as compared to the more cyclical exploration stage. Examples of major mining companies that are customers of Orbit Garant include Goldcorp Inc. and Xstrata plc. Intermediate mining companies Intermediate mining companies are defined as having mining-related revenues between US$50 million and US$500 million annually. As with major mining companies, intermediate mining companies typically have projects ranging from the developmental stage to producing mines, necessitating a range of drilling services. Examples of intermediate mining companies that are customers of Orbit Garant include Agnico-Eagle Mines Limited, FNX Mining Company Inc., IAMGold Corporation and Northgate Minerals Corporation. Junior mining companies Junior mining companies generally have minimal, if any, significant mining-related revenues and as they are typically dependent on external financing to fund their exploration expenditures. Exploration by junior mining companies is generally more heavily weighted to early stage exploration. Examples of junior mining companies that are customers of Orbit Garant include Alexis Minerals Corporation and V irginia Mines Inc. Demand for Mineral Drilling Services Mineral Exploration Expenditures Demand for mineral drilling services is driven, in part, by the amount of mineral exploration being undertaken. MEG reported non-ferrous exploration expenditures of US$5.2 billion in 2005, US$7.5 billion in 2006 and US$10.5 billion in 2007. This growth represents a 102% increase over a three year period and a 40% increase over 2006. Although previously untracked, MEG estimates that a further $0.9 billion of exploration expenditures was focused on uranium in 2007. MEG’s data does not track ferrous exploration expenditures, despite a resurgence of activity in iron-ore exploration in many parts of the world over the last few years. The following chart provides a geographical breakdown of mineral exploration expenditures between 2003 and 2007. Mineral Exploration Expenditures by R egion Australia % Of T otal Explor ation Expenditur es Canada 2003 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2004 2005 2006 2007 United States A frica L atin America P acif ic/SE Asia Rest Of W orld Source: MEG. 22