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National Bank Financial has initiated coverage on Orbit Garant Drilling (TSX: OGD)

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Analyst Raj Ray gives the company an outperform rating, with an above average risk rating, and a $2.80 target price, a premium of 44% to the $1.95 price on February 8th, the day the report was issued.

Additional Information:

Company: Orbit Garant Drilling
Website: http://www.orbitgarant.com
Stock Symbol: TSX: OGD
Date Published: Feb 15, 2017
Transcript: Available

Video Transcript:

I’m Isabelle Chatelain for Investmentpitch Media

Today’s buy recommendation comes from National Bank Financial, which has initiated coverage on
Orbit Garant Drilling (TSX:OGD) .

Analyst Raj Ray gives the company an outperform rating, with an above average risk rating, and a $2.80 target price, a premium of 44% to the $1.95 price on February 8th, the day the report was issued.

Headquartered in Val-d'Or Quebec, Orbit Garant is one of the largest Canadian-based mineral drilling companies, providing both underground and surface drilling services in Canada and internationally through its 221 drill rigs and more than 900 employees.

The company provides services to major, intermediate and junior mining companies, through each stage of mining exploration, development and production.

It also provides geotechnical drilling services to mining or mineral exploration companies, engineering and environmental consultant firms, and government agencies.

Analyst Raj Ray stated: “Maintaining a client base predominantly composed of relatively better capitalized majors and intermediates provides greater revenue stability as larger miners are able to preserve exploration budgets better than junior mining companies during periods of commodity price volatility. A strategy of acquiring companies during periods of market lows has allowed the company to grow its rig fleet and extend its portfolio of services at a conservative cost.”

Subsequent to the report, on February 13th, the company reported revenue of $27.4 million for the quarter ending December 31, 2016, an increase of 26.3% over the $21.7 million reported in the quarter ending December 31, 2015.

Eric Alexandre, President and CEO, stated: “Our continued growth in revenue and metres drilled reflects the growing demand we are experiencing for our drilling services both in Canada and internationally, particularly in Chile. Our margins and profitability continue to reflect lower pricing on existing contracts in Canada and higher mobilization and start-up costs as we ramp up our operations to meet increased demand. With drill utilization rates now improving, we expect to see a positive impact from pricing improvements on newer contracts in the second half of fiscal 2017.”

The shares are trading at $1.91, and with 35.1 million shares outstanding, the company is capitalized at $67 million.

For more information, please visit the company’s website www.orbitgarant.com or contact Bruce Wigle, Investor Relations, at 647-496-7856 or email investors@orbitgarant.com.

For more information about National Bank Financial or to obtain a copy of their research report, contact your nearest National Bank Financial office. Their branches are listed on their website at www.nbf.ca.

I’m Isabelle Chatelain for Investmentpitch Media