12 Orbit G arant 2012 annual rep O rt M ANAGEMENT ’ S DISCUSSION AND ANALYSIS This Management Discussion and Analysis (“MD&A”) is a review of the results of operations, the liquidity and the capital res ources of Orbit Garant Drilling Inc. This discussion contains forward-looking statements. Please see ‘‘Forward-Looking Statements’’ for a disc ussion of the risks, uncertainties and assumptions relating to these statements. This MD&A should be read in conjunction with the comparative audited consolidated fnancial statements for the peri od ended June 30, 2012 as compared with the corresponding period of the previous year and also with the audited consolidated fnancial statements and MD&A contained in the Company’s annual report for the fscal year ended June 30, 2011. The Company’s 2012 audited consolidated fnancial statements and the accompanying notes will form part of the frst annual audi ted consolidated fnancial statements to be prepared in accordance with International Financial Reporting Standards (“IFRS ”) for the fscal year ending June 30, 2012. The changes are described under “Transition to IFRS” further in the report. All amounts in this MD&A are in Canadian dollars, except where otherwise noted. In this MD&A, references to the “Company” or to “Orbit Garant” shall mean, as the context may require, either Orbit Garant Dril ling Inc., or Orbit Garant Drilling Inc. together with its wholly owned subsidiaries. This MD&A is dated September 19, 2012. Disclosure contained in this document is current to that date unless otherwise stated. Percentage calculations are based on numbers in the Financial Statements and may not correspond to rounded fgures presented i n this MD&A. Additional information relating to the Company, including the Company’s Annual Information Form for the most recently compl eted fnancial year, can be found on SEDAR at www.sedar.com FOR w ARD-LOOKING STATEMENTS Securities laws encourage companies to disclose forward-looking informati on in order for investors to have a better understanding of a company’s future prospects and make informed investment decisions. This MD&A contains forward-looking statements about the Company’s objectives, strategies, fnancial condition, results of operations, cash fows and businesses. These statements are “forward-looking” because they are based on current expectations, estimates and ass umptions about the markets in which the Company operates, the world economic climate as it relates to the mining industry, the Canadi an economic environment and the Company’s ability to attract and retain customers and to manage its assets and operating costs. Actual results could be materially different from expectations if known or unknown risks affect the business, or if estimates or assumptions turn out to be inaccurate. The Company does not guarantee that any forward-looking statement will materialize and, accordingly , the reader is cautioned not to place reliance on these forward-looking statements. The Company disclaims any intention and assumes no obligation to update any forward-looking statement, even if new information becomes available, as a result of future events or for any other reasons except in accordance with applicable securities laws . Risks that could cause the Company’s actual results to materially differ from its current expectations are discussed in this MD&A. h IG h LIG h TS • Revenue increased 21.2% to $154.8 million in fscal 2012, compared to $127.7 million in fscal 2011 • Record metres drilled at 1.5 million metres, up from 1.4 million metres in fscal 2011 • Adjusted gross margin (excluding amortization expense) of 27.3%, compared to 27.6% in fscal 2011 • EBITDA increased to $27.9 million from $26.0 million in fscal 2011 • Earnings per share of $0.31 ($0.30 per share diluted), compared to $0.35 ($0.34 per share diluted) in fscal 2011 • Acquisition of New Brunswick-based Lantech Drilling Services Inc. • Drill feet expanded to 224 drill rigs, up from 180 drill rigs at the end of fscal 2011 • Capital expenditures of $18.4 million to support increased business activity