The Company experienced increases in certain costs during the year, specifically labour and consumables, which partially offset the gains in price attributable to contractual increases and new contracts. However, with the combination of the businesses on January 31, 2007, the Company was able to enter into a new supply agreement with its primary supplier of consumables, Boart L ongyear Limited, which is expected to result in significant savings. Drillers, whose compensation represents the largest single cost item, are paid in line with the industry standard as published by the CDD A. General and Administrative Expenses G&A increased in 2007 over 2006 as a result of the acquisitions. T otal G&A in 2007 was $2,434,541, a 199% increase over 2006. This represents only five months of increased overhead due to the acquisitions of Orbit and Drift, and G&A is expected to be approximately $3.9 million on a full-year basis. As a percent of sales, this level of G&A is 5.6%, which is lower than that achieved prior to the acquisitions and is the result of the elimination of duplication in head office functions and facilities. Normalized EBITD A Consolidated Normalized EBITD A in 2007 was $10,558,782, an increase of $7,887,476 or 295% over 2006. This increase is attributable primarily to the acquisition of Orbit and, to a lesser extent, to the acquisition of Drift and, to a lesser extent, the organic growth in the underground segment. F inancial Expenses Interest costs increased significantly in 2007 due to the recapitalization of Orbit Garant on September 30, 2006 and the subsequent acquisitions of Orbit on January 31, 2007 and Drift on April 17, 2007. Each of these transactions resulted in the addition of debt in the capital structure to bring the total leverage to a level appropriate for the Company. T otal interest in 2006 was $189,851 while in 2007 this amounted to $1,136,822. Amortization The acquisition of the assets of Orbit and Drift during 2007, as well as the purchase of additional underground and surface rigs following the acquisitions, resulted in total amortization of $4,315,683 in 2007 as compared to $738,523 in 2006. In addition, the acquisitions of Orbit and Drift that occurred during the year gave rise to certain intangible assets, the amortization of which totalled $2,464,935 in 2007 (versus $0 in 2006). Net Earnings Net earnings for the year totalled $2,714,289 or a 151% increase over the $1,082,807 achieved in 2006, prior to the acquisitions. The average tax rate for the Company in 2007 was 34% as compared to 32% in 2006. This increase was principally due to tax rate variations of each tax jurisdiction. F iscal Y ear Ended June 30, 2006 Compared to June 30, 2005 Contract R evenue Contract revenue decreased from $28,003,588 in 2005 to $24,641,773 in 2006. This decrease reflects the completion of a one-time paste-fill drilling project for a major customer that was outsourced and managed by the Company. Excluding this contract, total revenue increased from $22,686,333 to $24,641,773 over the period, a gain of 9%. It should be noted that, other than the one-time paste-fill project, the Company only performed underground drilling during these two years and so no further breakdown of the operating results is applicable to this analysis and discussion. Cost of Contract R evenue and Gross Profit Gross profit was $3,448,730 in 2006 representing an increase of 21% as compared to the $2,858,311 achieved in 2005. However, after excluding the impact of the one-time paste-fill project, gross profit increased from $1,745,370 in 2005 to $3,448,730 in 2006, primarily as a result of an increase in the number of metres drilled. 47