16JUN200802055357 industry is undergoing a period of consolidation as many regional companies are either being acquired by public or private drilling companies. The Company competes against both multi-national corporations and regional players on the basis of price, accuracy, safety, productivity, reliability, experience and environmental record. Management believes that the Company offers the highest quality of service at a competitive price by maintaining a low overhead. This pricing advantage in addition to its long-term relationships with many of its customers, allows the Company to continue to obtain contracts from existing clients and contracts with new customers. As set out in the table below, the Company’s gross margin compares favourably to its competitors. Based upon its competitive advantages, management believes that the Company is well positioned to continue to compete successfully in the markets in which it operates and, in time, to expand to additional markets. Management also believes that the Company’s low cost structure will enable it to remain competitive and profitable when market conditions or commodity prices soften. Gross Margin % (1) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 41.1% 35.2% 33.8% 33.5% 33.1% 26.5% Ener gold F oraco (2) Orbit Garant Boar t Longy ear Major Drilling La yne Christensen Gr oss Mar g in % (L TM) Notes: (1) Based on publicly available filings for most recently available financial periods, except in the case of Orbit Garant, which is based on the twelve months ended March 31, 2008 (on a pro forma basis). (2) F oraco gross margin has been reclassified to remove depreciation from cost of goods sold (as reported under International Financial R eporting Standards). Employees Both underground and surface drilling requires a high degree of expertise and technical competence to ensure that the core samples are extracted and reflect accurately the location, composition and extent of the mineral deposit. The Company’s revenue is correlated to the number of metres drilled: revenue increases with the number of metres drilled. The productivity and therefore the profitability of a mining project is determined by how effectively the workers can extract core samples. Maintaining a skilled and experienced workforce is a critical component for any company operating in the drilling services industry and is something at which the Company has excelled. The Company has been able to retain a highly skilled work force of approximately 500 non-unionized employees and maintains turnover at a minimum. The following table summarizes the number of employees at the Company by function: Employees by F unction F oremen Drillers Helpers Garage Administration T otal 38 196 243 20 29 526 37