Good morning, everyone, and welcome to Geodrill's First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded today, May 12th, 2025. Before we begin, certain statements made on today's call by management may be forward-looking in nature and, as such, are subject to various risks and uncertainties. Please refer to the company's press release and MD&A for more details on these risks and uncertainties. I'll now turn the call over to Mr. Dave Harper, President and CEO of Geodrill. Please go ahead.
Thank you, Operator, and good morning, everyone. Welcome to Geodrill's Q1 2025 Financial Results Call. Joining me on the call today is our Chief Financial Officer, Greg Borsk. In the first quarter, we achieved outstanding results, setting new records for revenue and for EBITDA. These numbers are a testament to the strength of our strategy, which is working well, evidently, as these results do speak for themselves. Indeed, today's positive report card is the direct result of operational and repositioning efforts undertaken during 2023-2024. The foundation built then is driving our exceptional financial performance today. To recap, high level, Greg Borsk will speak to these in more detail later. We achieved record revenue, surpassing all historical benchmarks, which included two record-breaking months, one after the other, being February and March. EBITDA was also a record, a substantial plus over 100% year-over-year improvement.
Also, Earnings Per Share, $0.12 year-over-year, plus 160% improvement, just a penny shy of our previous record. These results significantly improved the balance sheet, also resulting in total shareholder equity of $125 million, another year-over-year improvement, 11% year-over-year improvement. Our strategy is all about balancing opportunity with risk and execution to ultimately deliver exceptional returns. Recall, key adjustments to our operating model were implemented over the past year, which were considered necessary in order to ensure the sustainability of the business. It is pleasing that these adjustments are now fueling the momentum and validating our approach. Just to recap, these adjustments included building a diverse client portfolio of well-funded, top-tier mining companies in safe jurisdictions, effectively mitigating the risk. This strategic move has expanded to new markets and enhanced our resilience.
One of the most significant achievements has been securing multi-rig contracts across both our core markets in West Africa and expanded markets of Egypt and South America. These contracts have substantially boosted our revenue visibility for the next three to five years, demonstrating our commitment to financial stability. Over the past year, we've made strategic expansion into the South American market, increasing our operations to meet growing demand. Thanks to our focused execution, we are now reaping the rewards of that investment and expect continued revenue growth from this key region. These accomplishments position us for continued growth and reinforce our ability to deliver sustained value for our investors. Our team's execution and commitment have been instrumental in driving our success, but it is also important to acknowledge the tailwinds of the strong commodity prices environment.
Market conditions have amplified demand, creating a background where our positioning allows us to maximize opportunities. The synergy between strategy and favorable market dynamics continues to propel our growth. Finally, it is important to say we are insulated from the effects of tariffs turmoil, ensuring stability and predictability in our operations. I'll now turn the call over to Greg Borsk, our CFO, who will review our financial performance in detail. Thank you, Greg.
Thank you, Dave. I am pleased to report the financial performance for the first quarter of 2025. The company generated record revenue of $48.8 million for Q1 2025, an increase of $14.1 million, or 41% when compared to $34.7 million for Q1 2024. The increase in revenue is the result of the increase in demand for Geodrill's drilling services and a robust gold price, as the majority of our clients are exploring for gold. The gross profit for Q1 2025 was $13.6 million, being 28% of revenue, compared to a gross profit of $7.4 million, or 21% of revenue for Q1 2024. We were able to considerably increase our Gross margin despite inflationary pressures facing the mining sector and mining service providers. EBITDA for Q1 2025 was $13.6 million, or 28% of revenue, compared to only $6.7 million, or 19% of revenue for Q1 2024.
The net income for Q1 2025 was $5.6 million, or $0.12 per share, compared to a net income of $2.1 million for Q1 2024, or $0.04 per share. In Q1 2025, we were able to increase the rig fleet, ending the quarter with 98 drill rigs. Building on Dave's comments, the record-high revenue is fundamentally driven by two key factors: our multi-rig, multi-year contracts, and record-high gold prices. Multi-rig, multi-year contracts have been instrumental in boosting our financial performance, and with robust global exploration spending, we are well-positioned for fiscal 2025. At this point, I will turn the call back to Dave.
Thank you, Greg. As we move forward, focus and adaptability remain at the heart of our strategy. The mining industry and the capital markets are constantly evolving, shaped by shifting regulations and economic pressures. To stay ahead, we are proactively navigating these changes while capitalizing on emerging opportunities. Our outlook for 2025 is exceptionally strong. We are still actively pursuing new contracts in high-potential geographic regions, paving the way for the next phase of growth. The synergy between our strategic long-term agreements and the booming commodities market positions us for sustained expansion, revenue growth, and operational success. This concludes our prepared remarks on our financial results. I'll now pass back to the Operator for anyone who has a question. Thank you.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Don angelo Volpe at Beacon Securities. Please go ahead.
Hey, guys. Good morning. Congratulations on the strong results. Just looking for a breakdown.
Oh, yeah, no problem. Just looking for a breakdown on the growth you guys are seeing by geography right now. I know we had some new contracts come in in West Africa and South America. Just trying to pinpoint the strongest points, the strongest areas of growth you guys are seeing.
I have a really interesting moment, Donangelo. Gold is exceptionally strong and has been since Liberation Day. It was doing very well before then. You can imagine if it averaged $2,700 through quarter three, I believe that is the number. Now it is sort of hovering around $3,300, or it is off a bit today, I think. Even at $3,200, it is up $500 on its average from last quarter. Strong gold, that will do it all the time, every time. We operate, we are very strong in West Africa. We are strong and we are getting stronger and bigger and more robust in Egypt. Those are essentially our gold markets. Copper is doing very well as well. Our South American business is actually probably where most of our growth is coming from. Really, it is a bit of both. It is a bit of both.
Yeah, Donangelo, let me just add, 41% quarter-on-quarter revenue increase was exceptional. What Dave's saying, to get that, to achieve that, it has to come from every region we're in. Our primary markets in West Africa, in each of those three countries, top line grew significantly. In Egypt, grew significantly, and in South America, it also grew. It is across the board. It is related to gold, and it is also related to other commodities. Very, very strong Q1 for us here.
Actually, just to jump in there, Greg mentioned a 41% Q over Q increase. Actually, the Q over Q was 47%. It was 41% year-over-year. That just really is a strong indication of the momentum when you get a such, it's good to have a solid quarter-over-quarter. I'm sorry, year-over-year. When you have an even more solid Q over Q, that really tells us something about the momentum.
Okay. Thanks for the color there. I appreciate that. I guess just since we were talking about the 41% year-over-year growth, on the last earnings call, we kind of talked about being happy at a 10-15% year-over-year growth for the year, kind of in line with the historical growth rates you guys have seen. Were there any outliers for this quarter as to why year-over-year growth was so strong, or should we kind of anticipate a bit more accelerated growth from what we've seen throughout the historical performance?
The problem with doing a 40% year-over-year improver is everybody wants you to do it again. I think you're asking what quarter two is looking like, as you know, we don't give guidance. Happy to say at this point in time, I think that at this point in time, it's probably going to be Q over Q flat, but a year-over-year improver.
Yeah. And.
Yeah. And remembering that, our quarter two last year was a record, okay? The previous record to quarter one 2025, top line, was quarter two 2024. For us to match it and beat it, as I say, it'll be we've just put in a very, very solid quarter. I'm expecting at this point, we're probably looking at something flat, maybe a slight improvement, but it'll more or less be in the same zip code. In terms of a year-over-year improver, I think you can definitely we'll definitely be looking at a year-over-year improver, yeah, for sure.
Donangelo, if you do remember, we had a very slow start to Q1 2024. We were not really ramping up Q1 2024 to the end of that quarter. It is a 41% increase quarter to quarter. The base was, I think it was around $34 million-$35 million. To get it up this year to where we are at $48.8 million, it is 41%, but the comparable was on the lower. We had a slower start to 2024. Q1 was slower than Q2 2024.
Okay. Perfect. Thank you for that. Final one, if I may, just curious on the commodity mix for the quarter, revenue by commodity.
Still predominantly, we drill for gold. I think we communicate this almost every call. It is the geography of where we are drilling. West Africa is predominantly all gold. Where we are drilling in other parts of Africa. Where we are seeing drilling for copper, etc., is in South America. The mix for us is still very heavily weighted towards drilling for gold.
90% gold and the 10% is for copper. I think we put that in the MD&A, actually, Donangelo.
Yeah. I saw 90% and 95%. I just wanted to kind of circle in on exactly which one.
Yeah. It's going to improve a bit as we move forward because what's happening is we've got more rigs going into the copper region, but they haven't really started to produce yet. Copper will become a bigger piece of what we're doing. To what extent, we're not 100% sure just yet.
Okay. Makes sense. I appreciate you guys answering the questions. Once again, congratulations on the results. I'll hop back in the queue.
Thank you.
Thank you.
Thanks, Donangelo.
Thank you.
Thank you. The next question comes from Mark Gomes at Pipeline. Please go ahead.
Good morning.
Hey, congratulations, guys. Great to see how your decision-making and sacrifices in 2023 are paying off so well.
Thank you.
Looking at drill demand in the marketplace versus your fleet size and drill availability in the marketplace, how would you characterize how that looks right now relative to your demand and hopes to further increase your rig count?
I think you'll see that we actually quoted our Rig Utilization there at 75% versus 65% a year ago. 75%, for your information, is more or less 100%. Mark, what never happens is you never get 100% of the fleet spinning. That's because usually there's some rigs in the workshop, or there's some rigs stuck in customs or mobilizing to a job or something. We effectively, when we quoted that number, we're talking about the average that was achieved for the quarter. There were some months in the quarter where we actually achieved north of 80%, I think 81% and 83%. I think January was the quieter of the three months. We're at effectively 100% utilization. I mean, it's the highest in the industry globally at the moment on a percentage basis. We will continue as we have always.
The history has been that from cash generated from operations, we add rigs, we grow revenues, we continue to grow the profit. And whilst the demand is there, and if anything, it's increasing, I think that pattern is just going to continue until at some point in time we decide we've got enough rigs and we make that decision, well, maybe we'll start backing off on the rig growth and just turn Geodrill into a cash generator. That time's actually coming. It's something that we talk about all the time at these board meetings. It's coming, and it's coming soon. For the moment, we're just in a very, very strong environment, and there's an enormous amount of demand. We've got to keep our customers satisfied too. In part, what we're doing is largely defensive as well.
Mark, that utilization, the 75%, that's the group number. But behind that, we are busy in each region. That kind of echoes the answer I gave on the revenue. The utilization and the revenue go hand in hand. There is demand for our rigs in every country where we are operating. It is a good problem to have in Q2 also. Very busy.
Right. I took note of that 75% number and do consider that to be effectively 100% in terms of what is possible, which leads me to ask, how does it look out there in terms of your ability to acquire more rigs? Is it a tight environment to find more rigs out there? I noticed that you are leasing one. How does that look?
It is improving. I mean, we were leasing three, and now we are leasing one. That is because our own rigs are coming, we are able to replace the leased rigs with our own. Rigs are still available, and we are still building rigs in our workshop. Where there is a will, there is a way. There is manufacturing. There is a rig manufacturing industry out there. We actually have additional rigs in the pipeline as we speak, actually, Mark. We are going to, somewhere in the not too distant future, we will be reporting that we have got north of 100 rigs. It is a work in progress.
Right. Right. Any sense as to where you'd like to take that number this year?
Not at this point. I've got no idea. Too many variables in there. The manufacturers can let us down. I mean, at the moment, we've done pretty well. We've moved up from we ended last year with 84 rigs, or we started last year with 84 rigs, and here we are with 98 rigs. I mean, considering all of this growth is organic and funded from cash generated from operations, it's as good as it's going to get. I wouldn't like to put a hard number against it knowing that there's just too many variables out there. We'll be north of 100, I imagine, this year.
Yeah. Mark, we do that. As you know, we're able to do that from cash flow from operations. For the last, as long as I can remember, anything we generate, any cash, we put right back into PP&E. As long as there's client demand, if we're at full utilization and there's a need with our tier one customers or with some of our other accounts, if they're looking for more rigs, we're very fortunate in that we're also able to manufacture rigs. Between our workshop, between rig suppliers in the different countries where we're operating in, so far, we've been able to deliver and keep our customers happy.
Your execution has been outstanding. Congratulations and my thanks as a shareholder.
Thanks, Mark.
Thank you very much.
Thank you. The next question comes from Kris Tuttle at Blue Caterpillar. Please go ahead.
Hey. Thanks for taking my question. I echo Mark's congratulations. A couple of questions for you. One is just on the receivables, kind of just looking at that line versus last year. It seems higher. I mean, it's not aged receivables. I am just curious if big portions of that have been collected, or if that's kind of the new run rate. Want some insight on that.
Yeah. Good question, Kris. The receivables, they're really a reflection of how busy we were in the back half of the quarter, predominantly February and March. As Dave said, usually January, it takes a little bit of time to ramp up. By the time we hit March, if not early April, most of the January receivables have been collected. You're seeing that the 30-60 day receivables that you're seeing at March 31, those are kind of current receivables, and they're reflecting how busy we were in February and March. What we try to do just to give comfort is we break down the aging of those receivables. Out of the $49 million, almost $50 million in receivables, very little are aged over 90 days this quarter.
That is a function of shifting the business, shifting the business over the last couple of years towards tier one miners and just people with the ability to pay their receivables on time, which helps us. Naturally, our Q1 and Q2 are the busy quarters. The receivables do ramp up Q1 and Q2. Okay?
Okay. Yeah. Got it. I did see these in the longer, the consolidated statements. Makes sense. My second question is just, great results, and I do the math, kind of looking at the current margins and a sustainable business. Correct me if I'm wrong, but it seems like you are going to be in a position to have a considerable amount of free cash flow, perhaps in excess of what you need. I'm wondering, what's your attitude around using that capital either for dividends or buybacks? Am I missing the opportunity to maybe make more investments than I'm aware of? Just wanted to get your thinking on that now that you guys have hit such a high level.
Glad you asked that question, Kris, because you're actually talking to the largest shareholder here. Stay happy. Yeah, look, we have this conversation all the time. At what point do we have enough rigs, and at what point should we start backing off on the growth? Firstly, we've never had any free cash since inception, since 1998 when we started with one rig and one contract. This has been a 100% organic growth story. I'm a big believer in at some point in time, we've got to sort of encash that opportunity that comes from all that revenue. If you look at our operating cash that we spin off, we spin off about 15%. Usually, all of that goes back into CapEx, and half of that is expansionary CapEx, and the other half is recurring CapEx.
If we were to back off on that expansionary CapEx at a point in time, it would give us the opportunity to, one, dividends, shore up the balance sheet by putting a bit of cash there, and buy some stock back. We plan to do all of those three things on balance, and that will tick everybody's box because not everybody wants dividends. Not everybody wants share buybacks. How do you keep everyone happy? I think the approach is just a balanced approach, a little bit of everything. The first thing we would like to see is just some cash on the balance sheet. We could also retire some debt. We have debt on the books, and that is expensive debt. We paid 10-odd %, which is expensive by Western standards, certainly. We certainly plan to do that. That time is coming.
I think the first thing that we want to do is just hit that milestone of 100 rigs and then figure out how many more rigs do we want to go. At what point in time should we maybe change the paradigm in terms of what companies do is they just grow, grow, grow, and then get bought? Another thinking about it in another way, you can just turn this thing into a cash-generating business and reward the loyal shareholders that we've had on the books for so long. I am very much in favor of that. Great that you're asking the question.
I just can't give you a definitive answer on that today other than we are continuing to, and we will continue to spit out operating cash, and at a point in time, we will start to back off on the expansionary CapEx and reward the shareholders somehow. Okay?
Kris, the other way to look at it, you look at the balance sheet, the total balance sheet. We have $125 million in total equity. The different buckets, they shift. Usually in Q1, a lot of that total equity, if you will, is tied up in receivables. Then as naturally through Q2, Q3, Q4, that shifts into more cash, etc. I think in Q1, Q2, we just make sure we are continuing to add total equity, and then it will work its way out into more liquid current assets in Q3 and Q4. I think the other point to make is just it is significant we have been increasing the total equity quarter over quarter. If you look at where we are now, the total equity, $125 million US, we are still trading at less than our book value. Okay?
The book value, if you take the shares divided by the total equity, our book value is about CAD 3.80. So we're still, despite record revenue, $0.12 in earnings. We did $0.12 in earnings in Q1. Last year, for the whole year, we did $0.20 in earnings. So we're about 60% of the way there through Q1. But as I said, that money, because we are extremely busy, it's kind of in different buckets where it has to work its way into the cash bucket. Okay?
Got it. Got it. Thanks for that. Really appreciate it.
Thanks, Kris.
Thank you.
Thank you. The next question comes from Dave Kegler at Investor. Go ahead.
Great quarter, gentlemen. Just a quick question. I believe a few quarters back, you were issued shares by a company that you had done some work for in lieu of cash. Can you tell me what you've done with those shares? Are you able to share anything if they've been cashed or if you still hold them?
Yeah. They're still on the balance sheet, and it's not just one. What we do is we have a portfolio of investments. It shows up in the balance sheet under a strange name. It's financial assets at fair value through profit and loss. We have a note on that, and it's really just equity investments that we've had over the years. Depending on, we look at a number of factors. We look at the underlying company that we're invested on. Is there liquidity? Are we able to sell some of this, etc.? In the quarter, that number actually increased for us. We went from about $6.5 million up to $6.7 million. That portfolio increased in value, and we were also able to get off some of the underlying equity. That helps us, that that's able to turn the equity investments into cash.
Hopefully, I'm explaining. It's kind of a long-term process as to when does it make sense to exit these investments, etc., and when does the market actually allow us to do it. We're always kind of selling these when it makes sense.
Gotcha. Thanks. Appreciate the question and answer.
Thank you.
Thank you.
Thank you. The next question comes from George Mellis at Mellis Marine Management. Please go ahead.
Great. Thank you. Congratulations, gentlemen. You mentioned quite a bit the multi-year, multi-rig contracts in your prepared remark. Can you give us some sense of what percentage of your revenue is made up of these? I mean, I guess it's not binary, but it's not exact, but maybe how many of your revenue is from these kind of contracts and also how that varies by geography?
Sure. When we're doing our budgets, we break our revenues and potential revenues into what we have and what we have to find. In the have bucket through known contracts, it's currently about 60%, and the other 40% will come by way of just general inquiries. In terms of known revenues, we're in the sort of 60% quartile.
Does that mean that you start the year with 60% visibility into your?
No, because we actually start the year with 100% because the audible as contracts in that 40% quartile come off, other ones come on. You have to have a percentage of the fleet available on the fleet, if you can imagine. If it were a taxi rank, you'd have to have some rigs on the cab rank ready to go. Otherwise, you wouldn't be able to service that part of your business. It helps us to know what our known revenues are going to be, but we also have to keep some availability for walk-ins, if you will.
Got it. Does that vary by region? Because some regions, you've been very established for 20 years, and of course, in South America, you're quite new.
I'm talking averagely here. If we look at South America at the moment, we have zero, like 100% utilization of the fleet. Every rig we have in the fleet, at least in one of the South American regions, is 100% utilized. In the other region where we're in South America, we're actually committed, just waiting to get through some community issues, and those rigs will be out in the rigs spinning. South America, as a division, is actually running at about 100%. Other parts of Ivory Coast at the moment, for instance, we do not have a spare rigs there. I just like to talk in averages because the company is not just one region. It operates across two continents and six countries.
What these multi-rig, multi-year contracts allow us to do is, because it is such a capital-intensive business, it allows us to plan. If we have a two or three-year contract and we know it is going to be a significant amount of meters over that time period, we are able to better position and better plan in that region. They are key to leveraging that region or that country, and they are kind of the staple, the base which we can then continue to grow on. Very important for the business. Whenever you, it is a nice way of saying a really big contract. It is multi-rigs, which is numerous rigs, and it is usually over multi-year. It is a significant management opportunity for us to actually take that contract, make sure we are executing on it, but to also build around it to kind of leverage that contract.
The thing about the multi-rig, multi-rig contract, multi-year contracts is that it gives us recurring revenues that we can pretty much budget on and know unless there's some left-field event that we're not aware of, like a market capitulation or a commodity capitulation. All things being equal, we can look at these and we can do our forecasting and we can plan.
Great. Maybe one more question. In West Africa, you've been there for a very long time, so I understand well how you have a great position. In South America, you're very new, yet you're doing extremely well. I mean, probably more than extremely well. How do you explain that? How do you explain your success in a new geography? I imagine it's new customers, but I'm not sure. Maybe there's some overlap, but I doubt it.
The thing that caught my attention when I was in South America and what drove our thinking that we should expand into the South American continent is that when we arrived in, if we follow our history, we operated. We saw a massive opportunity in West Africa when I started the business 26 years ago. That was that the region was massively underserviced. I actually was at the same time thinking of expanding. I actually had at that time almost moved into South America instead of Africa, but I chose Africa, and I'm glad that I did. The point is I visited South America more than 20 years later and nothing in South America had changed. The same opportunity was still there, and I saw that the same opportunity existed because I felt that the region was still very underserviced.
When we expanded into South America, it was on the strength of relationships that we had forged out of West Africa. Basically, geologists and exploration companies that had operated in West Africa had morphed into international companies operating across two continents, the other continent being South America. It was a congenial thing that we could just jump from a customer that we'd operated for in West Africa who we had history with that were happy to try and use our services in South America. Two friends tell two friends who tell two friends, and before you know it, you've got businesses going very well. I think that Geodrill does a lot of things in a good way. I think that the thing for us now is to try and mirror that same success that we've had in West Africa.
If we can do that and be as successful in South America, then effectively what we're looking at is the doubling of the business.
Okay. Wow. Great. Thank you very much.
Thank you.
Right. Thanks.
Thank you, ladies and gentlemen. As a reminder, should you have any questions, please press star one. The next question is a follow-up from Mark Gomes at Pipeline. Please go ahead.
Hi. I forgot to follow up. With regard to the environment for obtaining drills, for the typical kind of drill that you guys are buying, what is the market, the going rate for new drills there?
Oh, there's no one-off answer for that market. It depends on the type of drill. There's rigs that cost $500,000. There's rigs that cost $2 million. It just depends on the application. I'd say, look, on average, if you were to put an average against what does a rig cost, I'd say averagely you're looking at about $1 million. It doesn't only stop with the rig. You've got all the support equipment and everything that goes with it. You can almost add 50% to that again. I'm talking US dollars. That's just a very average number. We've got rigs in our fleet that cost more than $2 million, and we've got rigs that cost $500,000. They're all different applications. It just depends on the demand, and the demand drives our thinking in terms of what we buy.
Right. Right. Yeah. I was looking for a ballpark average. That's a good number. That would be consistent with kind of looking at your fleet as being average. We're just kind of looking to further validate your book value.
Our book value is massively understated, Mark. If I was to look at replacing these rigs with rig values today and have to go and buy these 98 rigs from a rig supplier, I'd reckon I'd be paying 50% above what we've got these rigs. These rigs have historical depreciation rates that have accounting practices and depreciation rates that have applied per accounting standards. If the market value of the rig changes, we can't just change that because it suits us to do so.
Right. Yeah. In the meantime, you do invest in keeping them tip-top.
Oh, of course. Yeah. Of course, we do that. The interesting thing is because of the sudden demand that we've been faced with recently, we had to go to market and actually buy rigs from suppliers and have to buy a couple of late-model second-hand rigs that were in the market. We're shocked how expensive they are. Shocked. It really validates my point that when we look at the hard book value of this company, which today is what's our hard book value?
The total equity is 175.
No, no. Forget the total equity. If we were just to look on a share price basis, we're looking at Canadian shares. I think Canadian share price, I've got it here actually.
Yeah. $3.80.
And Mark, the.
The hard book value is CAD 3.80. We trade at a discount to that, even though after today's good stonking financial results. I do not mind using that word, stonking, because these results were nothing short of stonking. Even with that, we are still trading under our hard book replacement value. That is not the market value. The market value of these rigs would be far greater. Okay? When you think of hard book values, you think of closing down sales. You think of a ghost town. You think of it is a western, and there is a tumbleweed, and there is a saloon door that is opening and closing, and you can hear it creaking because it is a ghost town. There is a rattlesnake that runs under one of the rigs, and this thing is just all parked up because there is no drilling going on.
Nothing could be further from the truth. This is a real going concern. We do not have one spare rig in the fleet at the moment. This is a 24/7, 365-day-a-year revenue-generating business that spits out very, very good returns for its shareholders. Yet, we trade at less than one year's revenue. If we look at our market valuation, we traded under one year's one-ex revenue. We traded about two times EBITDA per day, and we are trading at a discount to our book. I mean, it just does not make any sense. There is deep, deep value in this story. I have said this for a long time, and I will continue to say it. This is a very, very overlooked story.
Mark, where do you see the value?
Yeah. Okay. Thanks.
Go ahead. No, no, go ahead.
No, I was just going to say we do disclose the carrying value of the rigs. There is a table in the notes to the financials. It is about $43 million. Call it 98-100 rigs. It just really emphasized Dave's point that the book value, because of the depreciation, the average rig book value is about $430,000. It just shows you how much of a discount that is to reality to get a replacement rig.
Deep value.
Exactly the point I was getting at.
Thank you, gentlemen.
Yep.
Yep. Deep value on the back of a very strong earnings story.
Thanks, Mark.
Thanks, Mark.
Thank you. The next question comes from Jesus Sanchez at Castañar Investment. Please go ahead.
Hi. Thank you very much. Congratulations for the great quarter. A couple of questions on my side. You were mentioning, and you are totally right about it, that we are totally undervalued. Why do you think that our performance has not gone in line with the gold price? Because gold price has been rising for the last months, although our stock price is not. Is it because we are not listed correctly, or we are not considered part of the gold mining companies?
If you look at our financial performance and our Rig Utilization, there is a nice correlation actually to the gold price. As gold goes up, utilization goes up, and with it, revenues go up in lockstep. I would argue with you, Jesus, that our share price performance over the last year has actually been quite solid. If you look and you mapped up Geodrill, GEO.T, and looked at how it performed against the S&P last year, it outperformed the S&P. It outperformed gold. It outperformed gold ETFs. It actually did quite well. However, in my same breath, I would say that we are fundamentally still very undervalued. There are very few stories out there where you can buy cash-generating businesses that provide good returns in stable, solid markets. We do operate in West Africa. Yes, I get that.
Africa is made up of 54 countries, and we operate in the best four countries in Africa. In those countries, they produce gold. That is why we operate in Africa. We do not actually necessarily operate there by choice. We operate there because that is where the gold is. If the gold was in Ukraine or if it was in Brazil or whether it was in Mexico, that is where we would probably be drilling. We just happen to be in West Africa. I would argue with you that I think our share price has performed reasonably well relative to market and relative to our sector. If you compare us against all the other drillers, we have actually done pretty well this year. However, we could definitely do better. I was just highlighting the point there before.
Where can you buy a cash-generating, profitable company with good fundamentals that trades at less than one-ex revenue? You're just not going to find them. This is a real, this is a derivative of gold. If you want to play gold, which is a pretty smart thing to be playing at the moment, with all the turmoil in the world at the moment with concerns about currencies and trade wars and tariffs, turmoils, one safe haven that seems to be doing very well is gold. How do you play gold? How do you invest in gold? Do you go and buy a big bar of gold and take it home and put it in your safe? I mean, you find that your house cleaner will get the combination and run away with it. You can buy gold ETFs. You can buy gold shares or play derivatives.
In general, and companies like Geodrill are picks and shovels. That is what we refer to them as. Of the picks and shovels, we are probably the best of the picks and shovels because we speak for the largess of the exploration budgets. Approximately 50% of all exploration budgets go to drillers. From our point of view, the objective is to be the best driller out there. I hope that answers your question.
Yeah. No, no. Totally agree with you that last year's performance was exceptional. Totally agree with you that it's unjustified, fundamentals. Totally agree with you that we are a derivative play and a very cheap, actually, way of having exposure to gold. Thank you for your perspective. That's why we are invested in Geodrill, actually. My second question is about what are you sensing in the market? You mentioned increased client demand. I guess with these gold prices, majors or other minings are increasing their CapEx. Is what you are listening in the industry?
Yes. That's the short answer. Yes. Very much so.
Okay. What about us? Are we going to increase our CapEx? We added some rigs this quarter. What are our plans for future CapEx?
We have. We just had a really busy quarter with CapEx. We had a very busy, we had a record quarter last year with CapEx. Quarter two will more than likely be another record CapEx quarter. We are increasing our exploration CapEx expenditure in lockstep with demand. The demand is there, and it makes perfectly good sense for us to continue to expand into an ever-increasing insatiable appetite for our services. Now, once that service or that demand starts to fall away, we would like to be in a really strong position of having cash on the balance sheet and being able to, at that point, start thinking about making some returns to our loyal shareholders.
Just to add, Leon, we're unique. We're fortunate to be able to continue to add to our CapEx. That's because of the cash flow we generate from operations. Plus, we have facilities in place, term loans and credit lines, etc., where we're able to utilize those to actually add to CapEx if we need to. Not all of our competitors have that luxury. Geodrill, because we're disciplined and we do this, we've been doing this for a long time, we're able to continue to add CapEx either through Cash flow or, if we need, we can utilize the lines.
Yeah.
That is something I love about Geodrill with the return of capital employee that you have. Yes, reinvest everything in rigs. I just want to get the sense that you are going to continue in this space of three rigs per quarter. You are going to try to increase it, even the demand. I am happy with that.
Okay.
Okay. Great.
Right. Thank you.
Thank you.
Thank you. We have no further questions. I will turn the call back over to management for closing comments.
Thank you very much, everyone, for participating in today's call. Thanks for your great questions. Thank you very much.
Thank you.
Ladies and gentlemen, this concludes our conference for today. We thank you for participating, and we ask that you please disconnect your lines.