Major Drilling International : Financial Statements (Interim Financial Statements Q2 2026 Final)

Interim Condensed Consolidated Statements of Operations (in thousands of Canadian dollars, except per share information) (unaudited)

	Three months ended October 31				Six months ended October 31
	2025		2024		2025		2024
TOTAL REVENUE	$	244,138	$	189,260	$	470,756	$	379,302
DIRECT COSTS (note 8)	195,477		144,985		379,938		293,047
GROSS PROFIT	48,661			44,275		90,818		86,255
OPERATING EXPENSES General and administrative (note 8)	21,704		18,104		43,072		36,342
Amortization of intangible assets	1,525		272		3,055		543
Other expenses	4,933		2,479		8,224		5,435
(Gain) loss on disposal of property, plant and equipment	705		(279)		585		(670)
Foreign exchange (gain) loss	(468)		(512)		1,028		272
Finance (revenues) costs	648		(491)		1,280		(1,155)
	29,047		19,573		57,244		40,767
EARNINGS BEFORE INCOME TAX	19,614		24,702		33,574		45,488
INCOME TAX EXPENSE (RECOVERY) (note 9) Current	7,571		7,138		14,168		12,641
Deferred	(1,905)		(601)		(4,613)		(1,189)
	5,666		6,537		9,555		11,452
NET EARNINGS	$ 13,948		$ 18,165		$ 24,019		$ 34,036
EARNINGS PER SHARE (note 10) Basic	$ 0.17		$ 0.22		$ 0.29		$ 0.42
Diluted	$ 0.17		$ 0.22		$ 0.29		$ 0.42

Interim Condensed Consolidated Statements of Comprehensive Earnings (in thousands of Canadian dollars) (unaudited)

Three months ended Six months ended October 31 October 31

	2025	2024	2025	2024
NET EARNINGS	$ 13,948	$ 18,165	$ 24,019	$ 34,036
OTHER COMPREHENSIVE EARNINGS
Items that may be reclassified subsequently to profit or loss Unrealized gain (loss) on foreign currency translations	9,188	2,666	8,651	5,450
Unrealized gain (loss) on derivatives (net of tax)	2,182	(515)	2,288	(538)
COMPREHENSIVE EARNINGS	$ 25,318	$ 20,316	$ 34,958	$ 38,948

Interim Condensed Consolidated Statements of Changes in Equity

For the six months ended October 31, 2025 and 2024

(in thousands of Canadian dollars) (unaudited)

	Share capital		Retained earnings		Other reserves		Share-based payments reserve		Foreign currency translation reserve		Total
BALANCE AS AT MAY 1, 2024	$ 262,679		$ 151,740		$ (18 )		$ 3,630		$ 75,801		$ 493,832
Exercise of stock options	412		-		-		(109)		-		303
Share-based compensation -			-		-		61		-		61
263,091			151,740		(18 )		3,582		75,801		494,196
Comprehensive earnings: Net earnings -			34,036		-		-		-		34,036
currency translations -			-		-		-		5,450		5,450
Unrealized gain (loss) on derivatives	-		-		(538)		-		-		(538)
Total comprehensive earnings	-		34,036		(538)		-		5,450		38,948
BALANCE AS AT OCTOBER 31, 2024	$ 263,091		$ 185,776		$ (556)		$ 3,582		$ 81,251		$ 533,144
BALANCE AS AT MAY 1, 2025	$ 263,108		$ 177,695		$ (293 )		$ 3,615		$ 77,973		$ 522,098
Exercise of stock options	2,115		118		-		(1,294)		-		939
Share-based compensation	-		-		-		11		-		11
Stock options expired/forfeited	-		22		-		(22)		-		-
	265,223		177,835		(293 )		2,310		77,973		523,048
Comprehensive earnings: Net earnings	-		24,019		-		-		-		24,019
Unrealized gain (loss) on foreign currency translations	-		-		-		-		8,651		8,651
Unrealized gain (loss) on derivatives	-		-		2,288		-		-		2,288
Total comprehensive earnings	-		24,019		2,288		-		8,651		34,958
BALANCE AS AT OCTOBER 31, 2025	$ 265,223		$ 201,854		$ 1,995		$ 2,310		$ 86,624		$ 558,006

Unrealized gain (loss) on foreign

Interim Condensed Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (unaudited)

Three months ended Six months ended October 31 October 31

	2025	2024	2025	2024
OPERATING ACTIVITIES Earnings before income tax	$ 19,614	$ 24,702	$ 33,574	$ 45,488
Operating items not involving cash Depreciation (note 8)	15,863	14,211	31,799	28,079
Amortization of intangible assets	1,525	272	3,055	543
(Gain) loss on disposal of property, plant and equipment	705	(279)	585	(670)
Share-based compensation	-	19	11	61
Finance (revenues) costs recognized in earnings before income tax	648	(491)	1,280	(1,155)
	38,355	38,434	70,304	72,346
Changes in non-cash operating working capital items	(2,682)	7,782	(15,800)	3,747
Finance revenues received (costs paid)	(648)	491	(1,280)	1,155
Income taxes paid	(5,824)	(3,555)	(9,090)	(9,682)
Cash flow from (used in) operating activities	29,201	43,152	44,134	67,566
FINANCING ACTIVITIES Repayment of lease liabilities	(304)	(399)	(688)	(1,122)
Issuance of common shares due to exercise of stock options	1,208	15	1,457	303
Cash-settled stock options	(518)	-	(518)	-
Change in long-term debt	312	-	288	-
Cash flow from (used in) financing activities	698	(384)	539	(819)
INVESTING ACTIVITIES Payment of consideration for previous business acquisition	-	(9,088)	-	(9,088)
Investments (note 7)	-	-	-	(15,205)
Acquisition of property, plant and equipment (note 6)	(11,835)	(20,073)	(26,215)	(41,324)
Proceeds from disposal of property, plant and equipment	97	398	290	1,611
Cash flow from (used in) investing activities	(11,738)	(28,763)	(25,925)	(64,006)
Effect of exchange rate changes	(551)	575	(47)	1,471
INCREASE (DECREASE) IN CASH	17,610	14,580	18,701	4,212
CASH, BEGINNING OF THE PERIOD	47,078	85,850	45,987	96,218
CASH, END OF THE PERIOD	$ 64,688	$ 100,430	$ 64,688	$ 100,430

Interim Condensed Consolidated Balance Sheets

As at October 31, 2025 and April 30, 2025

(in thousands of Canadian dollars) (unaudited)

	October 31, 2025	April 30, 2025
ASSETS
CURRENT ASSETS Cash and cash equivalents	$ 64,688	$ 45,987
Trade and other receivables (note 12)	191,086	144,731
Income tax receivable	4,989	6,992
Inventories	114,748	115,629
Prepaid expenses	9,473	8,490
	384,984	321,829
PROPERTY, PLANT AND EQUIPMENT (note 6)	276,393	277,553
RIGHT-OF-USE ASSETS	8,110	9,176
INVESTMENTS (note 7)	17,784	17,814
DEFERRED INCOME TAX ASSETS	2,579	2,151
GOODWILL	67,536	65,962
INTANGIBLE ASSETS	21,560	24,256
	$ 778,946	$ 718,741
LIABILITIES
CURRENT LIABILITIES Trade and other payables	$ 137,851	$ 112,690
Income tax payable	7,513	4,295
Current portion of lease liabilities	2,057	2,021
Current portion of contingent consideration	7,406	8,869
	154,827	127,875
LEASE LIABILITIES	6,798	7,430
CONTINGENT CONSIDERATION	15,036	13,341
LONG-TERM DEBT	27,970	27,682
DEFERRED INCOME TAX LIABILITIES	16,309	20,315
	220,940	196,643
SHAREHOLDERS' EQUITY Share capital	265,223	263,108
Retained earnings	201,854	177,695
Other reserves	1,995	(293)
Share-based payments reserve	2,310	3,615
Foreign currency translation reserve	86,624	77,973
	558,006	522,098
	$ 778,946	$ 718,741

1. NATURE OF ACTIVITIES

   Major Drilling Group International Inc. (the "Company") is incorporated under the Canada Business Corporations Act and has its head office at 111 St. George Street, Moncton, NB, Canada. The Company's common shares are listed on the Toronto Stock Exchange ("TSX"). The principal source of revenue consists of contract drilling for companies primarily involved in mining and mineral exploration. The Company has operations in North America, South America, Australia, Asia, and Africa.

2. BASIS OF PRESENTATION

   Statement of compliance

   These Interim Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB") and using the accounting policies as outlined in the Company's annual Consolidated Financial Statements for the year ended April 30, 2025.

   On December 10, 2025, the Board of Directors authorized the financial statements for issue.

   Basis of consolidation

   These Interim Condensed Consolidated Financial Statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved when the Company is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

   The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statements of Operations from the effective date of acquisition or up to the effective date of disposal, as appropriate.

   Intercompany transactions, balances, income and expenses are eliminated on consolidation, where appropriate.

   Basis of preparation

   These Interim Condensed Consolidated Financial Statements have been prepared based on the historical cost basis, except for certain financial instruments that are measured at fair value, using the same accounting policies and methods of computation, as presented in the Company's annual Consolidated Financial Statements for the year ended April 30, 2025.

3. APPLICATION OF NEW AND REVISED IFRS® ACCOUNTING STANDARDS

   The following IASB amendment, adopted as of May 1, 2025, has not had a significant impact on the Company's Consolidated Financial Statements:

   • IAS 21 (as amended in 2023) - The Effect of Changes in Foreign Exchange Rates - The amendments contain guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.

     The Company has not applied the following IASB standard that has been issued, but is not yet effective:

   • IFRS 18 (as issued in 2024) - Presentation and Disclosure of Financial Statements - effective for periods beginning on or after January 1, 2027, with earlier application permitted. The standard replaces IAS 1, Presentation of Financial Statements, and includes requirements for the presentation and disclosure of information in financial statements, such as the presentation of subtotals within the statement of operations and the disclosure of management-defined performance measures within the financial statements.

     The Company is currently in the process of assessing the impact the adoption of the above standard will have on the Consolidated Financial Statements.

4. KEY SOURCES OF ESTIMATION UNCERTAINTY AND CRITICAL ACCOUNTING JUDGMENTS

   The preparation of financial statements, in conformity with IFRS Accounting Standards, requires management to make judgments, estimates and assumptions that are not readily apparent from other sources, which affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

   The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. Significant areas requiring the use of management estimates relate to the useful lives of property, plant and equipment and intangible assets for depreciation and amortization purposes, inventory valuation, determination of income and other taxes, recoverability of deferred income tax assets, assumptions used in compilation of share-based payments, fair value of assets acquired and liabilities assumed in business acquisitions, provisions, contingent considerations, impairment testing of goodwill, and impairment testing of intangible and long-lived assets.

   The Company applied judgment in determining the functional currency of the Company and its subsidiaries, the determination of cash-generating units ("CGUs"), the degree of componentization of property, plant and equipment, the recognition of provisions, and the determination of the probability that deferred income tax assets will be realized from future taxable earnings.

5. SEASONALITY OF OPERATIONS

   The third quarter (November to January) is normally the Company's weakest quarter due to the slowdown of mining and exploration activities, often for extended periods over the holiday season.

6. PROPERTY, PLANT AND EQUIPMENT

   Capital expenditures for the three and six months ended October 31, 2025 were $11,835 (2024 - $20,073) and $26,215 (2024 - $41,324). The Company did not obtain direct financing for the three and six months ended October 31, 2025 or 2024.

7. INVESTMENTS

   On July 22, 2024, the Company purchased shares in DGI Geoscience Inc. ("DGI") for $15,000 in cash consideration, a 39.8% equity interest (that provides the Company with 42.3% of the voting rights). DGI and its subsidiaries are privately held entities, headquartered in Canada, focused on downhole survey and imaging services as well as using artificial intelligence for logging scanned rock samples.

   In addition to the equity interest, Major Drilling has representation on the DGI Board of Directors and has special approval rights (protective in nature) granted to the Company as part of the investment. As a result, the Company concluded that the equity method of accounting is appropriate for its investment in DGI.

8. EXPENSES BY NATURE

   Direct costs by nature are as follows:
   	Q2 2026	Q2 2025	YTD 2026	YTD 2025
   Depreciation	$ 14,830	$ 13,433	$ 29,741	$ 26,293
   Employee salaries and benefit expenses	85,681	66,733	168,562	134,918
   Materials, consumables and external costs	84,171	55,599	163,517	112,420
   Other	10,795	9,220	18,118	19,416
   	$ 195,477	$ 144,985	$ 379,938	$ 293,047
   General and administrative expenses by nature are as follows:
   Q2 2026		Q2 2025	YTD 2026	YTD 2025
   Depreciation	$ 1,033	$ 778	$ 2,058	$ 1,786
   Employee salaries and benefit expenses	11,246	9,632	22,823	19,629
   Other general and administrative expenses	9,425	7,694	18,191	14,927
   	$ 21,704	$ 18,104	$ 43,072	$ 36,342

9. INCOME TAXES

   The income tax provision for the periods can be reconciled to accounting earnings before income tax as follows:

   	Q2 2026	Q2 2025	YTD 2026	YTD 2025
   Earnings before income tax	$ 19,614	$ 24,702	$ 33,574	$ 45,488
   Statutory Canadian corporate income tax rate	27%	27%	27%	27%
   Expected income tax provision based on statutory rate	5,296	6,670	9,065	12,282
   Non-recognition of tax benefits related to losses	340	769	1,045	971
   Utilization of previously unrecognized losses	-	(1,004)	(42)	(1,706)
   Other foreign taxes paid	93	172	560	297
   Rate variances in foreign jurisdictions	461	(51)	380	(112)
   Permanent differences and other	(524)	(19)	(1,453)	(280)
   Income tax provision recognized in net earnings	$ 5,666	$ 6,537	$ 9,555	$ 11,452

   The Company periodically assesses its liabilities and contingencies for all tax years open to audit based upon the latest information available. For those matters where it is probable that an adjustment will be made, the Company records its best estimate of these tax liabilities, including related interest charges. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax laws. While management believes they have adequately provided for the probable outcome of these matters, future results may include favourable or unfavourable adjustments to these estimated tax liabilities in the period the assessments are made, or resolved, or when the statutes of limitations lapse.

10. EARNINGS PER SHARE

    All of the Company's earnings are attributable to common shares, therefore, net earnings are used in determining earnings per share.

    	Q2 2026	Q2 2025	YTD 2026	YTD 2025
    Net earnings	$ 13,948	$ 18,165	$ 24,019	$ 34,036
    Weighted average number of shares:
    Basic (000s)	81,927	81,841	81,896	81,829
    Diluted (000s)	82,100	81,999	82,065	82,007
    Earnings per share Basic	$ 0.17	$ 0.22	$ 0.29	$ 0.42
    Diluted	$ 0.17	$ 0.22	$ 0.29	$ 0.42

    There was no impact on diluted earnings per share for the three months ended October 31, 2025 (2024 - 200,000). The calculation of diluted earnings per share for the six months ended October 31, 2025 excludes the effect of 99,429 options (2024 - 200,000) as they were not in-the-money.

    The total number of shares outstanding on October 31, 2025 was 82,052,736 (2024 - 81,842,086).

11. SEGMENTED INFORMATION

The Company's operations are divided into the following three geographic segments, corresponding to its management structure: Canada - U.S.; South and Central America; and Australasia and Africa. The services provided in each of the reportable segments are essentially the same. The accounting policies of the segments are the same as those described in the Company's annual Consolidated Financial Statements for the year ended April 30, 2025. Management evaluates performance based on earnings from operations in these three geographic segments before finance costs, general corporate expenses and income taxes. Data relating to each of the Company's reportable segments is presented as follows:

	Q2 2026	Q2 2025	YTD 2026	YTD 2025
Revenue Canada - U.S.*	$ 87,554	$ 85,396	$ 171,624	$ 172,549
South and Central America	110,700	49,141	206,463	98,965
Australasia and Africa	45,884	54,723	92,669	107,788
	$ 244,138	$ 189,260	$ 470,756	$ 379,302

*Canada - U.S. includes revenue of $41,902 and $25,695 for Canadian operations for the three months ended October 31, 2025 and 2024, respectively and $81,071 and $57,543 for the six months ended October 31, 2025 and 2024, respectively.

1. SEGMENTED INFORMATION (Continued)

   Q2 2026			Q2 2025		YTD 2026			YTD 2025
   Earnings (loss) from operations
   Canada - U.S.	$ 10,446			$ 7,694		$ 16,235		$ 15,500
   South and Central America	9,145			6,812		14,845		12,925
   Australasia and Africa	9,066			13,996		18,283		25,433
   	28,657			28,502		49,363		53,858
   Finance (revenues) costs		648		(491)			1,280	(1,155)
   General and corporate expenses**		8,395		4,291			14,509	9,525
   Income tax		5,666		6,537			9,555	11,452
   		14,709		10,337			25,344	19,822
   Net earnings	$	13,948		$ 18,165		$	24,019	$ 34,036

   **General and corporate expenses include expenses for corporate offices and stock-based compensation.

   	Q2 2026		Q2 2025		YTD 2026		YTD 2025
   Capital expenditures
   Canada - U.S.	$ 1,310		$ 8,548		$ 2,595		$ 16,720
   South and Central America	6,620		3,703		17,294		9,728
   Australasia and Africa	3,823		7,822		6,155		14,822
   Unallocated and corporate assets	82		-		171		54
   Total capital expenditures	$ 11,835		$ 20,073		$ 26,215		$ 41,324
   Depreciation and amortization
   Canada - U.S.	$ 6,072		$ 6,846		$ 12,626		$ 13,186
   South and Central America	6,454		3,203		12,679		6,404
   Australasia and Africa	4,629		4,218		9,084		8,592
   Unallocated and corporate assets	233		216		465		440
   Total depreciation and amortization	$ 17,388		$ 14,483		$ 34,854		$ 28,622

   	October 31, 2025	April 30, 2025
   Identifiable assets
   Canada - U.S.*	$ 224,870	$ 223,320
   South and Central America	381,229	342,668
   Australasia and Africa	228,305	216,051
   Unallocated and corporate liabilities	(55,458)	(63,298)
   Total identifiable assets	$ 778,946	$ 718,741

   *Canada - U.S. includes property, plant and equipment as at October 31, 2025 of $52,158 (April 30, 2025 - $58,312) for Canadian operations.

2. FINANCIAL INSTRUMENTS

   Fair value

   The carrying values of cash, trade and other receivables, demand credit facilities and trade and other payables approximate their fair value due to the relatively short period to maturity of the instruments. The carrying value of contingent consideration and long-term debt approximates their fair value as the interest applicable is reflective of fair market rates.

   Financial assets and liabilities measured at fair value are classified and disclosed in one of the following categories:

   • Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

   • Level 2 - inputs other than quoted prices included in level 1 that are observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

   • Level 3 - inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The Company enters into certain derivative financial instruments to manage its exposure to market risks, comprised of share-price forward contracts with a combined notional amount of $10,542, maturing at varying dates through June 2028.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.

The Company's derivatives, with fair values as follows, are classified as level 2 financial instruments and recorded in trade and other receivables (payables) in the Interim Condensed Consolidated Balance Sheets. There were no transfers of amounts between level 1, level 2 and level 3 financial instruments for the three and six months ended October 31, 2025.

October 31, 2025 April 30, 2025

Share-price forward contracts $ 1,806 $ (1,582)

Credit risk

As at October 31, 2025, 96.5% (April 30, 2025 - 96.1%) of the Company's trade receivables were aged as current and 1.0% (April 30, 2025 - 1.5%) of the trade receivables were impaired.

The movements in the allowance for impairment of trade receivables during the periods were as follows:

October 31, 2025 April 30, 2025

Opening balance	$ 2,179	$ 4,149
Increase in impairment allowance	216	840
Recovery of amounts previously impaired	(485)	(584)
Write-off charged against allowance	-	(2,215)
Foreign exchange translation differences	23	(11)
Ending balance	$ 1,933	$ 2,179

12. FINANCIAL INSTRUMENTS (Continued)

Foreign currency risk

As at October 31, 2025, the most significant carrying amounts of net monetary assets and/or liabilities (which may include intercompany balances with other subsidiaries) that: (i) are denominated in currencies other than the functional currency of the respective Company subsidiary; and (ii) cause foreign exchange rate exposure, including the impact on earnings before income taxes ("EBIT"), if the corresponding rate changes by 10%, are as follows (in $000s CAD):

Net exposure on monetary

Rate variance MNT/USD ARS/USD USD/AUD IDR/USD USD/CAD USD/ZAR USD/SAR PEN/USD USD/CLP Other

assets (liabilities) 9,939 6,911 6,754 5,389 3,571 (6,020) (6,800) (9,729) (17,095) (1,823)

EBIT impact +/-10% 1,104 768 750 599 397 669 756 1,081 1,899 202

Liquidity risk

The following table details contractual maturities for the Company's financial liabilities:

1 year 2-3 years 4-5 years Thereafter Total

Trade and other payables	$ 137,851	$ -	$ -	$ -	$ 137,851
Lease liabilities (interest included)	2,588	3,795	1,598	2,563	10,544
Contingent consideration (undiscounted)	7,692	18,829	-	-	26,521
Long-term debt (interest included)	1,797	29,767	-	-	31,564
	$ 149,928	$ 52,391	$ 1,598	$ 2,563	$ 206,480