Good morning, ladies and gentlemen, and welcome to the second quarter 2023 results conference call. I would like to turn the meeting over to Denis Larocque, President and CEO. Please go ahead, Mr. Larocque.
Thank you. Good morning, everyone. As mentioned, we'd like to welcome you to Major Drilling's conference call for the second quarter of fiscal 2023. On the call with me today is Ian Ross, our CFO. Our results were released yesterday evening and can be found at our website at majordrilling.com. Before we get started, I'd like to caution you that during this conference call, we'll be making forward-looking statements about future events or future financial performance of the company. These statements are forward-looking in nature and actual events or results may differ materially from those currently anticipated in such statements. I must say we're very happy with our second quarter results as we saw continued strength of demand for Major Drilling services, especially for our complex specialized drilling services, which again drove solid quarterly results.
During the quarter we began to see the growing importance of electric vehicles and electrification market with increased demand from copper and battery metal customers. Combined with increased activity from all three of our geographic segments, driven mostly by seniors, this more than offset the slight softening in activity from the junior miners. As well, our operational leverage continued to be strong as an 18% increase in revenue produced a 65% increase in net earnings, helping to bring in an additional $43 million of net cash during the quarter. At the same time, we continued to modernize our fleet, purchasing 14 new rigs, including 7 underground drills in line with our diversification strategy, which allows us to offer a modern and productive fleet to our customers in order to meet the growing demand in the industry.
After a strategic focus to diversify our services, I'm proud to say that we now offer one of the most modern underground fleet in the industry. As we continue to move through the current cycle, Major Drilling's core strategy remains to be the leader in specialized drilling, as new mineral deposits will increasingly be located in areas more challenging to access or requiring complex drilling solutions. We're committed to providing top quality service to our customers, through safe and productive drill programs as evidenced by our industry-recognized hole completion rates. We leverage our worldwide expertise and utilize our strong financial position to ensure we have the equipment and inventory required to be best-in-class service provider.
With our continued focus to be an industry leader with respect to ESG, we issued our inaugural Sustainability Report during the quarter, highlighting the tremendous efforts of our organization across the globe to help improve the communities in which we operate in. The collaborative efforts from our board to our teams in the field ensure we are aligned as a company to progress our ESG initiatives, and it remains a priority moving forward. With that, Ian will walk us through the quarter's financials, then I'd like to discuss the market outlook before opening up the calls for questions. Ian?
Thanks, Denis. Revenue for the quarter was CAD 201.7 million, up 18% from revenue of CAD 170.7 million recorded last year as we saw continued growth in all geographic regions. During the quarter, there was tremendous volatility in the currency markets, in particular the US dollar, which produced a favorable foreign exchange translation impact on revenue for the quarter when comparing to the effective rates for the same period last year of approximately CAD 6 million with a CAD 1 million favorable impact on net earnings. The overall gross margin percentage, excluding depreciation, was 31.8% for the quarter, compared to 28.3% in the same period last year. Margins continued on the upward trend due to enhanced productivity and price adjustments that have offset inflationary pressures.
G&A costs were up CAD 2 million at CAD 16.1 million when compared to the same quarter last year. The increase from the prior year was mainly attributed to increased employee compensation as well as elevated travel costs. Other expenses were CAD 4.7 million, up from CAD 3.4 million in the prior year quarter, due primarily to higher incentive compensation expenses throughout the company, given the increased profitability. Foreign exchange loss was CAD 1.1 million, compared to a CAD 900,000 loss for the same quarter last year. While the company's reporting currency is the Canadian dollar, various jurisdictions had net monetary assets or liabilities exposed to other currencies, including the US dollar, which strengthened with the foreign exchange volatility experienced during the quarter.
The income tax provision for the quarter was an expense of CAD 7.5 million, compared to an expense of CAD 4.5 million for the prior year period. The increase from the prior year was due to an overall increase in profitability. Net earnings were up 65% to CAD 23.6 million or CAD 0.29 per share, CAD 0.28 per share diluted, compared to net earnings of CAD 14.3 million or CAD 0.17 per share for the prior year quarter as our earnings power remained prominent. EBITDA grew 40% to CAD 43 million compared to CAD 30.7 million in the prior year quarter. The operational leverage inherent in the business continued to deliver excellent results as top-line growth and margin improvement generated substantial EBITDA growth.
The balance sheet remains a competitive advantage and was bolstered this quarter by increasing our net cash by CAD 42.8 million to finish the quarter with CAD 51.3 million net cash. The company is also pleased to announce the renewal of our existing credit facility under the same terms and conditions for another five-year term. Coupled with our net cash position, this provides tremendous liquidity and flexibility moving forward. The company remains committed to having top-quality equipment for our customers by spending CAD 13.3 million on CapEx, adding 14 new rigs, including 7 underground drills in line with our diversification strategy. We disposed of 11 older rigs in the quarter to finish the quarter with 603 drills.
During the quarter, the company paid out AUD 7 million in contingent consideration in relation to the McKay acquisition as they successfully met all of their year one milestones. The new breakdown of our fleet and utilization is as follows. 293 specialized drills at 51% utilization, 115 conventional drills at 48% utilization, 195 underground drills at 61% utilization for a total of 603 drills at 54% utilization. As we've mentioned before, specialized work in our definition is not necessarily conducted with a specialized drill. Rather, it is work that requires that we meet the rigorous standards of our customers in terms of technical capabilities, operational and safety standards, and other related factors. Over time, we expect these standards to be increasingly important to our customers.
In the second quarter, revenue from specialized work accounted for 65% of our total revenue, up from 64% in Q1. The growth in specialized drilling was driven by senior intermediate demand, requiring a certain level of expertise to execute drilling programs. We continue to see a lot of interest in our specialized work as mining companies look to replace their depleting reserves. conventional drilling made up 12% of our revenue, down slightly from 13% in Q1, driven by the slight decrease in junior activity. Finally, underground drilling revenue held steady from Q1 at 23% of revenue. As mentioned, revenue from juniors was down slightly in the quarter due to tight financing markets. However, they maintained a healthy level at 24% of our revenue, coming off slightly, 25% in Q1.
Seniors and intermediates made up 76% as they added drills in the quarter and continued their plans to address their depleting reserves. In terms of commodities, gold projects represented 45% of our revenue while copper was at 23% this quarter. We've continued to see a shift in our commodity mix as copper and other battery metals are driving our business. Gold continues to provide a stable floor, but with current market conditions has not seen the growth in interest that other commodities have. With that overview on our financial results, I'll now turn the presentation back to Denis to discuss the outlook.
Thanks, Ian. As we enter our season, our seasonally slower third quarter, customer demand for calendar 2023 looks to remain strong. We're already in discussion with several senior customers. Just in the last two weeks, we have seen gold prices come back above $1,800 and copper prices above $3.85 a pound as metal prices have remained at levels well above what is needed to support exploration. As well, in the last couple of weeks, we've seen a pickup in junior financing, which is all good news for the sector going forward. This combined with the growing supply shortfall in most mineral commodities, continues to drive demand for our services.
As the global demand for electrification continues to grow, the world requires an enormous amount of volume of copper and battery metals, which is significant for our outlook and the future of our business. We believe that this will increase pressure on the existing supply-demand dynamic and lead to substantial additional investments in copper and other base metal exploration projects. This increase in both activity levels and diversification of commodities continues to drive demand for our services. Our growing fleet ensures we retain utilization capacity to meet this growing demand, and our capital availability ensures we have flexibility to increase our fleet when and where to consistently meet the needs of our customers across the globe.
It is crucial that we continue to aggressively and successfully invest in the recruitment and training of new drillers to ensure Major Drilling remains both the operator and employer of choice in our industry. We have made great progress over the last 18 months in growing our labor force, doing so with safety in mind, and we are starting to see the results of that training through our productivity. I wanna thank our crews out there for their hard work and success. In closing, I wanna wish you all the best for the holiday season and to our teams, I ask you to rest well during that time, as calendar 2023 is shaping up to be another very busy year. With that, we can open the call to questions, operator.
Thank you. If you have a question, please press star one on your device's keypad. There will be a brief pause while participants register. Thank you for your patience. The first question is from Gordon Lawson from Paradigm Capital. Please go ahead.
Hello. Good morning. Congratulations on another outstanding quarter. Can you comment on your ability to outperform your competitors with respect to growth in North America? They seem to be struggling, whereas you are reporting very positive year-over-year growth.
Yes. Well, I think it relates to the prep work we did through the downturn. We, in the last upturn, we were playing catch up because we came out with quite a bit of debt levels on our balance sheet and were not able to invest in our fleet. Through that upturn from 2003 to 2012, we were playing catch up and just building up the fleet as we went. This time around, we entered the downturn with a strong balance sheet, so we invested in our fleet, put rigs on the shelf, we stocked up our shelves with inventory and also kept our key people and invested in our training schools.
All of those combined allowed us to get out of the block, from the get-go to tackle the quick upturn in demand that we saw. Basically that had an impact in terms of market share we were able to get.
Okay. That's great. Thank you. Your Australasia and Africa segment also saw a big jump in revenue this quarter. Can you provide some more color as to what's behind that?
Well, I mean, we've got customers in the region that increased activity during the quarter, added rigs to their existing. Our Australasia business, I would say is a bit more mature. A lot more seniors, not a lot of juniors in there. The seniors, basically, those customers added rigs to their projects. That's where most of that growth came from.
Okay. Thank you very much, and congratulations again.
Thank you.
Thank you. The next question is from Ryan Hanley from Laurentian Bank. Please go ahead.
Perfect. Thanks. First off, congrats guys. Another great quarter. Just a couple of quick questions for me here. I guess first, just given that we're heading into fiscal Q3, which is seasonally a bit of a weaker quarter. With demand being where it is, and I guess all signs pointing to things remaining strong, are you expecting, I guess, the cost, given that you typically do rig maintenance in the third quarter, to be a little bit higher than what they typically are for a seasonally weak quarter, just given the increase in demand compared to prior years?
I'm not sure I get your question. You think costs-
I guess compared to the typical fiscal Q3, do you think you're gonna be doing a lot more rig maintenance and spending a lot more on prepping for a busier calendar 2023?
Okay. Yeah. Well, I mean, it's all relative. In absolute dollars, yes, we are. Basically, that's because we're generating more revenue and we're on a higher level. We are certainly. The rigs are coming back from the field. There's more rigs coming back from the field and the way things are looking, more rigs going out back in the field that needs to be prepped. Yes, costs will be higher, but we've got, you know, more revenue to absorb that. Should be okay.
Okay, fair enough. I guess you kinda touched on how a little bit of weakness, I guess, in the, in the gold explorers has been offset by increased demand from seniors and some of the battery metals. Given the way things are looking, how much smaller do you think that kinda gold slice of that pie will get as it gets kinda offset by things like copper and nickel? How much lower, I guess, can that go?
Well, I think you're in a better position to assess that in terms of what the gold companies are gonna do, because at this point for us, we're waiting to see. There's definitely a need to increase reserves. The discussions we're having with gold companies right now are very positive. They're all talking about having to do at least the same amount, if not more, in certain cases. We feel really positive on the gold going forward that we'll be able to maintain our level of activity in 2023 and then add on tack on more work on the base metal side.
Okay, perfect. Makes sense. I guess maybe just one last one for me. You touched on adding seven underground rigs. Are those more for production drilling, or is that exploration? I guess maybe the rationale for my question here is it kind of building, I guess, a bit of a base given that it's a cyclical, you know, type of business? Is it building a bit of a base so that, you know, when exploration does start to turn, at least it gives you a bit of a cushion and that you've got a bit more of a segment with more kinda stickier longer-term contracts?
Whether it's exploration or production in underground, what we found in the last downturn is that, yes, it was stickier. Even through an upturn, it gives you that base. It's a 12-month a year steady revenue. Again, whether it's production or exploration, the minute you're in an underground mine, by definition, it is a producing mine, and they need to keep doing that work if the mine is going to produce. It gives you that assurance of revenue, whereas on surface it's a little bit of sometimes stop and go during the year. Yes, I mean, that strategy, diversification strategy, or the investment we made in the underground rigs is completely in line with that.
It is to basically keep building that base of steady business throughout the year. It's working out. It's been working out well for us.
Okay, perfect. Sorry, one other one here for me, and then I'll jump back in the queue. Just on the utilization rates, are there any areas, I guess, where the rates are still pretty low, where you see a lot more room for growth, or is it pretty steady-ish around that 50% mark on a global basis?
Well, on a global basis, it's different everywhere, right? I mean, it's... In North America, it's definitely stronger than it is in South America, for example. That is normal compared to what we've seen in previous cycles. Whereas, we see basically the activity picks up in North America first in an upturn, just because the money that gets raised or the investment that gets made early on in the cycle tends to be closer to home. As the cycle progresses and commodity prices improve, then you start to see more investment going abroad. That's kind of what the trend we're seeing. We've been seeing utilization picking up in areas outside of Canada, U.S. over the last 6 months.
Whereas in Canada, U.S. and Australia, we're already seeing some strong utilization numbers in those areas.
Okay, perfect. That's it for me. Thanks again and congrats on a great quarter.
Great. Thanks, Ryan.
Thank you. The next question is from Daryl Young from TD Securities. Please go ahead.
Hey, good morning, everyone. First question is around the juniors, and just wondering if you could help me reconcile some of the commentary in the release about decline or slight softening of junior activity. Based on the 24% split, it seems like it's pretty stable. Maybe just a little bit more color on what you're seeing there and whether you expect that to trend lower in the next few quarters, or if we need, you know, if we need more financing activity to push juniors higher again.
Yeah. Well, it's more in terms of growth. The growth has stopped, and that is related to the slowdown in financing activity that we saw. There's been a lot of money raised over the last 18 months, and that money is still getting spent in the field. That's why that, we were still able to hold up to 24% of our revenue this quarter. It is, as we progress, the we're seeing more activity coming from the seniors. The seniors are, again, in discussions are talking about doing in many cases, doing more next year. That's kind of what we're seeing in terms of how things are playing out.
Okay. Following on that, if we did not see a return of the financing markets, do you think, I know it's early days, but do you think it's possible we could have an increase year-over-year in results without any material junior financing? How could the seniors push things higher year-over-year?
Well, in our case, the juniors we're working for are well-financed at the moment. The projects we're on are, we feel that, we feel pretty good about them for 2023. Therefore, I think, I think we should be okay for, you know, for 2023. I mean, if the financing window doesn't open, you know, it's sure that down the road, those juniors then, will have to slow down their activity because they live and die by drill results. If they're not getting, recognized for those drill results, through financing, then yes, we could see that down the road. Like I say, in our case, we feel pretty good because of the juniors we're aligned with.
Got it. Okay. On the battery metals, was the increase in the quarter a reflection of more work with existing customers? Are you seeing net new contract wins with battery metal miners and explore cos?
It's a bit of both. We saw increased activity by existing customers, but we also moved on some new projects as well in terms of copper and nickel and silver and things like that.
Okay. One last one for me. Just with respect to the miners and the new construction of projects, we've seen some pretty eye-popping inflation numbers for their CapEx budgets on new project development. Would you anticipate that and possible deferrals next year, would you anticipate that to impact the drilling? Or do you see them as continuing the drill programs in advance, in preparation for a future build date?
Well, like I said, we haven't seen the budgets yet for next year. At this point, it's still hard to call, for us. Well, what we have to go by is the discussions we're having at this point, and they're pretty positive in terms of activity levels for next year. That's, I gotta believe. Also, when you consider that some of them are so far behind in terms of reserves and having to catch up, and they've been delaying for a few years in terms of exploration and got going in 2022, I think for them it would be hard to stop that motion, considering the amount of work that's still left to be done to shore up their reserves.
Okay. That's, that's great color. Thanks, guys. Congrats on the good results.
Thank you.
Thank you. The next question is from James Vail from Arcadia Advisors. Please go ahead.
Good morning.
Good morning.
I have a very simple question as usual. Ian basically said our operational leverage continue to generate excellent financial results. It seems to me that going forward, you guys are gonna be almost debt-free, and the contingent payments are gonna be gone, and you're just gonna be generating an incredible amount of cash. What does how does that figure into your strategic thinking?
Yeah, for sure. From a capital allocation standpoint, and we got asked this question last quarter, right now, we still feel it's early in the cycle. Our focus is on growth right now. That's either new jurisdictions, organic growth, or potential M&A, tuck-in opportunities that are out there. The balance sheet, the way it's set up, provides tremendous flexibility right now. What we're looking for is good opportunities, and that's what we feel is gonna bring the best value for our shareholders. At this point in time, that's the strategy.
Well, it's interesting, one of the previous questioners asked how you're doing so well against some of your competitors who didn't get out of the gate as quickly as you did. Is that where you see opportunities to grow?
Yeah. I mean, again, we're still very early in this cycle. When you go back, the amount of exploration that was spent in 2012 was $21 billion, and last year there's only $11 billion that was spent. That's after two years of increased activity and exploration. There's been quite a bit of a drag in terms of exploration, and therefore, the last upturn lasted nine years, and we're just in starting year three of this upcycle. Still a lot of a lot of room to go and to grow. To your point, yeah, I mean, there are probably opportunities out there to grow.
Okay.
Yeah.
Great. I think you guys are doing a great job. Oh, the market just opened. I wonder what that's gonna mean. All right. All the best.
Thank you.
Thank you. The next question is from Larry Callahan from Wheelhouse Securities. Please go ahead.
Good morning. I was wondering if you ever get inquiries or if you ever consider a listing in the U.S. rather than trading on the pink sheets, or if you could give any insight into that at all.
We haven't looked at it. It's not part of our plans at the moment. No.
Would it be prohibitively expensive to do something like that for a company your size?
I mean, that is part of it. Again, it's not something that we have in our plans at the moment.
Would it involve additional accounting expense or, I mean, would you consider it? What would be the barriers to considering it, expanding your U.S. ownership? I mean, I know people can trade on Toronto, but small investors don't always have access to foreign markets.
I mean, right now, the bulk of our holdings are institutionally owned, and we haven't come across a big demand for a listing. In terms of the accounting and back office function, yes, there would be some additional support needed to have a U.S. listing that we have looked at, but that's not the main reason. For now it's that the main institutional interest in us can access our float on the TSX. At this point in time, we aren't seriously looking at it.
Okay. Could I ask that you consider it again, please?
We can certainly look at it. Yes.
Thank you.
Thank you. The next question is from Soren Heberle from Mill Road Capital. Please go ahead.
Hi, Denis and Ian. Thanks a lot for taking my questions, and congrats on another great quarter. I have 3 questions for you today, and mine are related to the cycle, your competitive position, and the implications of those two factors on your next peak EBITDA. You know, first, just revisiting the potential length and magnitude of this current upcycle. I believe the gold reserves are currently about 10% lower today than they were back in 2005, which was, you know, call it roughly the beginning of the last upcycle. It took about 8 subsequent years of elevated exploration activity for miners to shore up their reserves back then. Total exploration spend at the peak of that last cycle in 2012, it was about 75% higher than the expected level for this year.
I guess my question is, with that context, is it reasonable to assume that this upcycle should last for several more years and exploration spend could, you know, continue to increase well above 2022 levels if miners are going to replace the reserves that they've depleted?
I mean, definitely, as you mentioned, we're still a long way from the exploration spent that was there at the peak in 2012. And as I said, we're just in starting year three of that upcycle. Now, how long will it go, is, you know... I mean, nobody knows. There's definitely a need for a lot of exploration to fix up the reserves. When people look at metals, I mean, what you, what you hear in the market right now, what you read is all about demand, and there's a big, you know, there's a lot of press in terms of the demand coming for copper, for battery metals, for all of that. The supply side is what drives our business.
When you look at the supply and the reserves and I mean, you said it yourself in terms of even on the gold reserves being 10% less than what we saw in 2005. There's definitely a need for a lot of exploration going forward. With everything getting deeper, more remote, which will, by definition, require a lot more drilling, it'll be interesting to see where it gets going forward because there's gonna a need there's a need for a lot more exploration to shore up the reserves. You lay on top of that the demand for those metals that keeps increasing then, yeah, I feel really good about the future.
Thanks. I mean, you know, from my perspective, it just feels like the market backdrop is so powerful that even if you do see a slight softening of the juniors, I just struggle to see how that really matters in the grander scheme of things, because, you know, it sounds like we're in the earlier innings of a prolonged upcycle with further exploration activity yet to come if quite frankly, if miners don't wanna deplete themselves out of existence. That's a powerful macro backdrop. I guess I'll turn to my second question, which is on your competitive position.
you know, you've spoken about this a bit already, and I think everyone knows that your two largest competitors have had capital structure issues since the last upcycle, that have materially limited their ability to invest as you've discussed. While at the same time you've had a great balance sheet. you know, I think that would really have strengthened your competitive position. The way we looked at it is we said, let's pick a simple metric like revenue. you know, on that metric, it looks like your relative size versus your two major competitors has grown very significantly.
You know, if I pull out just the big three, call it Major Drilling, Boart Longyear and Foraco, and I go back to the last peak, it looks to us like your share of revenue then was about 16%, and that's grown to around 31% now, which would suggest you've nearly doubled your market share relative to your two largest competitors. You know, that would seem to be proof that you're in a much stronger competitive position today. Maybe, you know, is that the case? Is that fair to assume?
Yeah. Well, like I mentioned, in the last upturn, we started on the back foot, really. Just the fact that we had to rebuild our fleet through that upturn and rebuild our level of crews and build up our inventory. That took time. Whereas this time around, at the time, we had a few of our competitors that were in much better shape financially than we were, and therefore got out of the blocks quicker than we did. Whereas this time around, I think the roles have been reversed, like you said.
During the down cycle, we used our balance sheet to just prep our rigs, stock up, and train people and so that we were able to get out early and grow. That, I think that's what explains the yes, market share that we were able to get.
Okay, great. You know, last topic for me is really just understanding the implications of all of that on the company's next potential peak EBITDA. I guess just to be clear from the start, I don't expect you to provide any guidance here. I just wanna sense check a few of my own assumptions. You know, my understanding is that right now your average revenue per utilized rig is about CAD 2.35 million, if I updated my calculation correctly for the information on this call. Closer to a cyclical peak, your capacity utilization could be at least 75%, which would imply a little over 450 rigs out there in the field.
If that's directionally correct, and that revenue per utilized rig is sustainable, which it sounds like it is, your revenue would be north of CAD 1 billion. Is that right?
Well, I mean, if using those numbers, yes, you can get to that number, I guess. Yeah.
Okay, great. closer to the peak of a cycle, you know, I'd expect your gross margin to be nearer to what you achieved during the last peak. I'll say about 32.5% is reasonable, and that's actually not far from where you are already. That would get me to about $345 million of gross profit in a peak scenario. Is that in the ballpark?
Well, as a margin percentage, During the downturn, it kinda forced us to look at ways to be more productive, be more efficient. We've put things in place, procedures and better equipment. I'd like to think that with everything being equal, that we'd be able to replicate and probably do a bit better than we did on margins if we were to reach the same peak level as we did in 2012. Yeah.
That's, that suggests that that's potentially even a reasonably conservative number. I'll keep it for conservatism. If I then add in your SG&A costs, which I'm just assuming grow with a high level of inflation, as well as some variable expenses, that gets me to about, you know, CAD 85 million in incremental expenses. That takes me to a peak EBITDA of CAD 260 million, which, you know, of course I don't expect you to comment on that, but that is significantly higher than your last peak EBITDA of CAD 180 million. You know, I just don't think that the market really understands that that's the direction you're going.
You know, all I can say is that from Mill Road's perspective, you guys should keep on doing what you're doing because you're doing a great job, and hopefully the market will figure it out at some point. Thanks again for taking my questions and congrats on a great quarter.
Well, thank you.
Thank you. Once again, please press star one at this time if you have a question. The next question is from Ahmad Shaath from Beacon Securities. Please go ahead.
Hey guys, congrats on a great quarter. Just a quick one for me on I guess CapEx expectations, slash maybe rig growth fleet, going into calendar 2023. Secondly, anything we should read through in the I noticed like working capital was a net positive or cash inflow in the quarter. Anything to comment on that or is that just a natural for business?
Well, on the CapEx, we offered guidance when we started the year for our fiscal year, which ends at the end of April, and we projected CAD 65 million of CapEx. At the moment, I think we're at something like CAD 26 million of CapEx after, I don't have the numbers in front of me, but I think we're at 26, around CAD 26 million year to date. We're a bit, a bit behind in terms of that spending. We do have rigs on order coming in over the next few months, so we'll see, we'll see where that goes.
Beyond that, I think you can probably expect that level to stay at about those levels going forward unless things change dramatically, you know, either way. If we had like a huge additional influx in demand in certain areas, we might have to add a few more rigs in some of the areas. Right now, I think that level would be appropriate going forward. On the working capital question, nothing really to read into in the quarter. It's a lot of timing for receivables. At Q1, we had some outstanding that flowed into the quarter. We had some payables increase during this quarter just with timing of expenses. Nothing unusual or anything to read into there.
That's it. Thanks for answering my question, guys, and congrats again.
Thanks.
Thank you. The next question is from Greg Menen, private investor. Please go ahead.
Hi. Congratulations. I just wanna reiterate about listing in the United States and increasing or expanding your shareholder base.
Mm-hmm.
I don't know if you're bored or if you guys realize that if you are a, you're not blue-skyed in the U.S., seems like it would be simple for you to do this, to increase your shareholder base, broaden it, and possibly get coverage from U.S. research. They're not gonna cover you unless, you know, they can market your stock to their clients. The world's different today. You know, the last upturn, the regulations in the U.S. weren't as stringent on the blue sky. I don't know if you all know that, you can't put an order in if you know, for a retail client in the U.S. unless you're blue sky. I mean, the computer systems block it. An advisor cannot solicit an order.
You know, you're not gonna get research. Why would you not wanna broaden your base is 83% institutional with Fidelity in there, Fidelity decides to move out of your stock. You know, it's, it's not gonna be friendly to the rest of your shareholders if they decide they wanna own it. Would you please consider getting listed in the United States?
It's certainly something we're certainly gonna look at. It's also... I mean, a big thing also is the size in terms of just the or, basically our capital or the size. We're a small cap. That's what I was looking for. We're still a very small cap stock. So in terms of cost and everything, it is... That's what we need to look at is the cost benefit, but I hear you. It's something that we're gonna consider seriously, especially as our basically our value continues to grow. We're certainly getting to that. With time, we can see getting to that billion-dollar mark of market cap.
Once you get in those ranges, that's where then you start to be more on the radar of investors like that, and that's where it might make sense for us to be listed. It's all a matter of market cap, timing, costs, and all those things that we need to consider. At this point, we haven't considered it just because our market cap is still quite small, but it's something that with time, we'll certainly need to consider.
Thank you. I'm trying to get your market cap to $1 billion, it's kind of waiting for it to get there to do this doesn't make sense to me. It makes sense to do it now to try to assist you in getting to a market cap of $1 billion. There's a huge market out there that might want to invest in your company or hear about your company, they're prohibited because of the regulations.
Mm-hmm.
To spend $1 million. Let's say it's $1 million, but you open up the biggest market in the world for your company. Just seems to make sense to me. Thank you for your consideration and thanks for a great job.
Okay, thank you.
Thank you. There are no further questions registered at this time. I'd like to turn the meeting back over to Mr Larocque.
Well, thank you. As I mentioned, I want to wish everybody the best for the holiday seasons, and we'll be talking to you in the new year.
Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.