Imdex : UBS Australasia Conference 2019 Presentation

19 November 2019

Company Announcements Office

ASX Limited

Exchange Centre

20 Bridge Street

SYDNEY NSW 2001

Dear Sir/Madam

UBS Australasia Conference 2019

Please find attached the UBS Australasia Conference 2019 Presentation to be presented later today.

Yours faithfully

Imdex Limited

Paul Evans

Company Secretary

CONFIDENTIAL - © Imdex Limited November 2019

IMDEX presentation UBS Australasia Conference 2019

NOVEMBER 2019

CONFIDENTIAL - PROPERTY OF

© IMDEX LIMITED

PAUL HOUSE - CHIEF OPERATING OFFICER

PAUL EVANS - CHIEF FINANCIAL OFFICER & COMPANY SECRETARY

IMDEX at a Glance

A leading global Mining-Tech company

Outperforming market growth

Exciting pipeline of new technologies

Compelling opportunities for sustainable revenue and earnings growth

REVENUE CAGR

19%

EBITDA CAGR

37%

FY17 - FY19

STRONG MARKET PRESENCE ON

70%

OF MINERAL DRILLING PROJECTS GLOBALLY

SALES IN 102

COUNTRIES

FY19 EBITDA MARGIN

21%

STRONG COMPETITIVE POSITION

MARKET CAP

$543.3m

AS AT 30 SEPT 2019

INSTITUTIONAL

INVESTORS

65%

STRONG NET CASH POSITION

$23.2m

AS AT 30 JUNE 2019

1Q20 RECORD REVENUE

2

What Our Technologies Do

Enable successful cost-effective operations

We develop cloud-connected sensors and drilling optimisation products to improve the process of identifying and extracting mineral resources globally.

Drilling faster & smarter

• Drilling productivity and rig alignment technologies

• Automated and remote drilling fluid testing technologies
• Data collection and paperless reporting software

1.33

.........

Accurate subsurface data

• Downhole survey sensors
• Core orientation and gamma logging technologies
• In-fieldsampling and analysis technologies

Receiving real-time Information

• Secure cloud-based services
• Real-timesubsurface visualization
• Interpretive software - geological data

3

IMDEX Technologies

Applicable across the whole mining value chain

	1.
Drilling	33
Accurate
faster & smarter	subsurface data

.........

Receiving real-time information

EXPLORATION

DISCOVERY

DEFINITION

PLANNING

FRAGMENTATION

EXTRACTION

"It's about drilling faster and smarter and knowing your rocks in real-time."

DR MICHELLE CAREY

GENERAL MANAGER

IMDEX PRODUCT DEVELOPMENT

	EXPLORATION & DEVELOPMENT	4
GRAPHIC SOURCE: CRC ORE	MINING & PRODUCTION

IMDEX Integrated Solutions

Strong competitive position

ASSAY

GEOCHEMISTRY

GEOPHYSICS

SURVEY	01
36
DATA
07

SATELLITE

IMAGERY

SPATIAL

DATA

COMPREHENSIVE RANGE OF END-TO-END CONNECTED SOLUTIONS

STRONG IP

PROTECTION

HIGH BARRIERS TO ENTRY

STRUCTURAL	+

	DRILLING
GEOLOGY	OPTIMISATION

BLAST HOLE

SENSOR DATA

5

Record Quarterly Revenue Improving quality of rental offering

Revenue

1Q20 up on 1Q19

Maintained gross margins

• Steady growth globally
• Increasing recurring rental revenue
• New technologies provide additional value to clients and generate higher rental rates
• Increasing revenue from mining and production phase

FY19 REVENUE

		AMERICAS		20%
					24%
					EXPLORATION &
SALES						DEVELOPMENT
		ASIA PACIFIC	45%
	79%	47%
RENTAL	53%					MINING

	EUROPE & AFRICA	31%		80%

6

Compelling Opportunities

7

Strategy

Compelling opportunities for sustainable growth

• Growing our core business by enhancing technical leadership, technical integration and increasing share of client spend
• Further extension into larger adjacent mining market to build non-cyclical revenue

	NEW
PRODUCTS / TECHNOLOGIES	EXISTING

DRILLING
PRODUCTIVITY	IMDEX MINING
TECHNOLOGIES
TECHNOLOGIES
(INC COREVIBE™,	(INC BLAST DOG™)
XTRACTA™ &
MAGHAMMER™)

ONGOING R&D

CORE BUSINESS

MARKET EXTENSION

(INC SOFTWARE,CORE BUSINESS IMDEXHUB-IQ™ &

AMC MUD CALC™)

EXPLORATION	MINING
& DEVELOPMENT
MARKETS	8

Ongoing R&D Core Business

Connecting and enhancing our traditional technologies

TECHNOLOGIES	NEW
PRODUCTS /	EXISTING

DRILLING	IMDEX
PRODUCTIVITY	MINING
TECHNOLOGIES	TECHNOLOGIES
ONGOING R&D	MARKET
EXTENSION
CORE
CORE
BUSINESS
BUSINESS

EXPLORATION MINING

• DEVELOPMENT MARKETS

"If I can get instantaneous information as I'm drilling the ground to understand what to put into our mine plans and into how we work with our trucks, diggers and logistics plans, that is the real unlock for us as a business.

What we see as the macro opportunity is the ability to actually link decisions across the value chain."

RAG UDD

BHP'S GLOBAL HEAD OF TECHNOLOGY TRANSFORMATION

49%

OF TOP 100 CLIENTS ARE CONNECTED TO IMDEXHUB-IQ™

CONNECTED CLIENTS GENERATE

60%

MORE REVENUE FOR IMDEX THAN NON-CONNECTED CLIENTS

9

Drilling Productivity Technologies

Product Extension

TECHNOLOGIES	NEW
PRODUCTS /	EXISTING

DRILLING	IMDEX
PRODUCTIVITY	MINING
TECHNOLOGIES	TECHNOLOGIES
ONGOING R&D	MARKET
ONGOING R&D
CORE	EXTENSION
COREBUSINESS
CORE
BUSINESS
BUSINESS

EXPLORATION MINING

• DEVELOPMENT MARKETS

COREVIBE™

XTRACTA™

MAGHAMMER™

Client Benefits		Progress Update
• High frequency energy pulse	• Units on rent 1Q20
assisted drilling for wireline coring	• Trial pipeline in Australia
• >30% increase in productivity		and North America full
• Up to 90% increase in	• Pilot production on track
penetration rates
• Allows drillers to change the bit when	•	Commencing client
core is retrieved - no need to pull rods		trials 2Q20
• The hole is always cased, maintaining	• Pilot production on track
hole integrity
• Significant productivity and
safety benefits
• Combines rotary diamond drilling	•	Development at IMDEX
with fluid driven percussive drilling		test site in NZ
• Achieves high penetration rates	•	Commercial trials 3Q20
compared to conventional coring

• Significant safety, cost and environmental benefits

10

Drilling Productivity Technologies Product extension investment rationale

Attractive addressable coring rig market: COREVIBE™ ~1800* XTRACTA™ ~3000*

*Based on current coring rig utilisation rates

Complements IMDEX's integrated solutions

Will not cannibalise existing product offering

MAGHAMMER™	Strong industry	Unique
initially targeting	demand	technologies
high speed pre-collar	for greater	with strong IP
drilling through deep	productivity - from	protection
cover to the coring	drilling contractors
zone, ~1000 RC rigs	and resource
globally	companies

New Drilling	Ability to leverage	Manufacturing
Productivity	existing cost base,	and distribution
technologies suit	client network	fits well within
IMDEX rental	and infrastructure	capabilities
model	globally

11

Mining Technologies

Market Extension - Blast DOG™

TECHNOLOGIES	NEW
PRODUCTS /	EXISTING

DRILLING	IMDEX
PRODUCTIVITY	MINING
TECHNOLOGIES	TECHNOLOGIES
ONGOING R&D	MARKET
ONGOING R&D
CORE	EXTENSION
COREBUSINESS
CORE
BUSINESS
BUSINESS

Co-development project with Orica - the world's

largest provider of commercial explosives and innovative blasting systems. Together we are optimising blasting outcomes based on high-resolution 3D material models and material tracking in the pit.

EXPLORATION MINING

• DEVELOPMENT MARKETS

BLASTDOG™

Client Benefits

• Maximises revenue by increasing mine to mill efficiency
• Predictable fragmentation of blasted ground
• Greater throughput at the processing plant
• Less dilution
• Controlled vibration, dust, fumes and heave
• Enhances safety

Progress Update

• Conducting trials with global resource companies in Australia and the US
• Trials include precious and base metals and bulk commodities
• Revenue generation 4Q20

12

Mining Technologies - Blast DOG™

Optimised blasting and material tracking

Drilling	Domaining	Optimised	Post-Blast	Productivity &
	Analytics	Blasting	Metrics	Processing Metrics

SOFT

IMDEX BHS

IMDEX Blast DOG

HARD

	MEDIUM
	HARD
Holes are logged	Analytics are
using IMDEX multi-sensor,	applied to identify
which measures	material boundaries -
physical properties	i.e. how hard or soft the
	ground is

PREDICTABLE FRAGMENTATION

OF BLASTED GROUND

CONTROLLED VIBRATION, DUST,

FUMES AND HEAVE

INCREASED PROCESSING INTENSITY (GREATER THROUGHPUT AT

THE PROCESSING PLANT)

ENHANCED PRODUCTIVITY

FOR RESOURCE COMPANIES

Information from these analytics	The blasting process is
forms the input for blast design.	optimised - i.e. varying
Data is transferred via	energy in blast holes depending
IMDEXHUB-IQ™	on ground type

13

Mining Technologies

Market extension investment rationale

Substantial	Strong demand	Leverages	Potential
addressable	for productivity	existing	to provide
market,	increases	technology and	substantial
~700 operating		engineering	additional
mines		expertise	sustainable
			rental revenue

Ability to	Strong support
leverage	from industry
existing	partners -
infrastructure	Orica, Anglo
globally	American and
	Teck Resources

14

Orebody Intelligence

IMDEX provides high-resolution geoscientific data

"We're excited to be working in collaboration with IMDEX, our customers Anglo, Teck and the broader industry on this project, bringing together world- leading experience and expertise to revolutionise drill and blast operations across the global mining industry."

ANGUS MELBOURNE

ORICA'S CHIEF COMMERCIAL

AND TECHNOLOGY OFFICER

Source: Orica 2019 Investor Day Presentation	15

Outlook & Summary

16

Positive Growth Outlook A strong start to FY20

Record 1Q20 revenue

• increasing activity reflected in IMDEX's growing rental fleet

Major and intermediate resource companies - increasing expenditure to replace reserves

New discoveries under cover and at depth - more drilling and longer development times

Resource companies - embracing innovation and new technologies to lower cost, increase safety and achieve greater productivity

Stronger gold price and uplift in capital raisings globally

Four new IMDEX technologies

• additional revenue in FY20, recurring commercial revenue from FY21

17

Summary

Positioned to deliver attractive returns

Strong financial platform - improving recurring revenue and cash flow from operations, ability to increase shareholder returns

Outperforming market growth - market leading patent protected technologies that act as a barrier to entry

Expanding market share and margins, driven by an unrivalled range of technologies and the benefits of being the first mover to cloud-enabled instruments

Compelling opportunities for sustainable revenue and earnings growth - core business and market extension

Established global company - ability to leverage extensive client network and achieve economies of scale

Strong leadership team - successful track record of developing and commercialising technologies in all market conditions

18

Thank you

THIS PRESENTATION HAS BEEN PREPARED BY IMDEX LIMITED ("THE COMPANY"). IT CONTAINS GENERAL BACKGROUND INFORMATION ABOUT THE COMPANY'S ACTIVITIES CURRENT AS AT THE DATE OF THE PRESENTATION. IT IS INFORMATION GIVEN IN SUMMARY FORM AND DOES NOT PURPORT TO BE COMPLETE. THE DISTRIBUTION OF THIS PRESENTATION IN JURISDICTIONS OUTSIDE AUSTRALIA MAY BE RESTRICTED BY LAW AND YOU SHOULD OBSERVE ANY SUCH RESTRICTIONS.THIS PRESENTATION IS NOT (AND NOTHING IN IT SHOULD BE CONSTRUED AS) AN OFFER, INVITATION, SOLICITATION OR RECOMMENDATION WITH RESPECT TO THE SUBSCRIPTION FOR, PURCHASE OR SALE OF ANY SECURITY IN ANY JURISDICTION, AND NEITHER THIS DOCUMENT NOR ANYTHING IN IT SHALL FORM THE BASIS OF ANY CONTRACT OR COMMITMENT. THE PRESENTATION IS NOT INTENDED TO BE RELIED UPON AS ADVICE TO INVESTORS OR POTENTIAL INVESTORS AND DOES NOT TAKE INTO ACCOUNT THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR NEEDS OF ANY PARTICULAR INVESTOR. THESE SHOULD BE CONSIDERED, WITH OR WITHOUT PROFESSIONAL ADVICE, WHEN DECIDING IF AN INVESTMENT IS APPROPRIATE.THE COMPANY HAS PREPARED THIS PRESENTATION BASED ON INFORMATION AVAILABLE TO IT, INCLUDING INFORMATION DERIVED FROM PUBLICLY AVAILABLE SOURCES THAT HAVE NOT BEEN INDEPENDENTLY VERIFIED. NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE AS TO THE FAIRNESS, ACCURACY, COMPLETENESS, CORRECTNESS OR RELIABILITY OF THE INFORMATION, OPINIONS AND CONCLUSIONS EXPRESSED.ANY STATEMENTS OR ASSUMPTIONS

IN THIS PRESENTATION AS TO FUTURE MATTERS MAY PROVE TO BE INCORRECT AND DIFFERENCES MAY BE MATERIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, NONE OF THE COMPANY, ITS DIRECTORS, EMPLOYEES OR AGENTS, NOR ANY OTHER PERSON ACCEPTS ANY LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY LIABILITY ARISING FROM FAULT OR NEGLIGENCE ON THE PART OF ANY OF THEM OR ANY OTHER PERSON, FOR ANY LOSS ARISING FROM THE USE OF THIS PRESENTATION OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH IT.

FOR FURTHER INFORMATION PLEASE CONTACT:

KYM CLEMENTS

IRO & CORPORATE COMMUNICATIONS [e-mail]

20

Appendices

21

Company Snapshot

As at 30 September 2019

CORPORATE INFORMATION

ASX listed		IMD
Share price	$	1.40
Issued shares	m	388.1
Market cap	$m	543.3

SHARE PRICE - 12 MONTH TREND

SHARE REGISTER

ANALYSIS OF TOP 50 SHAREHOLDERS

Institutions	64.75%
Employees, directors & company related parties	3.11%
Private shareholders	6.09%
Brokers & banks	14.63%

LARGEST SHAREHOLDERS	SHARES (m)	%
Morgan Stanley Australia	37.54	9.67
Yarra Capital Management	34.75	8.96
Fidelity Investments	29.25	7.54
L1 Capital	22.05	5.68

22

IMDEX Board

Committed to driving growth strategy

Mr Bernie Ridgeway	Ms Sally-AnneLayman	Mr Anthony Wooles	Mr Ivan Gustavino	Mr Kevin Dundo
Managing Director	Non-Executive Director	Non-Executive Chairman	Non-Executive Director	Non-Executive Director

23

Executive Leadership Team

Successful track record

Bernie Ridgeway	Paul Evans	Paul House	Mathew Regan	Michelle Carey
Managing Director	CFO & Company	Chief Operating	Chief Information and	Global Manager - IMDEX
	Secretary	Officer	Transformation Officer	Product Development

Dave Lawie	Tim Price	Sarah Standish	Kingsley Weber	Derek Loughlin
Chief Geoscientist / Chief	General Manager - IMDEX	IMDEX General	Human Resources	Global Business
Technologist - Mining Solutions	Product Research	Counsel	Director	Development Director	24

ESG

Achievements & Areas of Focus

SAFETY

• Improving safety performance
• Enhancing visible safety leadership
• Improving systems and compliance
• Implementing technology solutions - iAuditor
• Enhancing employee training and education

SOCIAL

• Implemented Supplier Code of Conduct to align with IMDEX's transparent, safe and ethical procurement practices
• Enhanced anti-bribery & anti-corruption framework

ENVIRONMENTAL

• Increasing number of solids removal units on rent - smaller site footprint and significant water reduction
• Market a range of bio-degradable drilling fluids

GOVERNANCE

• Developed Conflict of Interest Policy and process for disclosing and managing conflicts
• Annual employee ethics training and certification
• Annual employee anti-bribery and anti-corruption training
• Implementing revised risk, compliance and legal framework

25

Key Metrics

A strong financial platform

		FY19		FY18		VAR
		$m		$m		$m
Revenue		243.7		218.5		25.2
EBITDA	52.3	42.4	9.9
EBITDA margin %	21%	19%	2%
NPAT	27.6	21.1	6.5
EPS (cents)	7.4	5.7	1.7
Operating cash flow	35.2	15.9	19.3
Net assets	220.0	186.1	33.9
Net cash (as at 30 June)	23.2	7.9	15.3
Fully-franked interim dividend (cents)	0.8	-	0.8
Fully-franked final dividend (cents)	1.4	-	1.4
Full-time employees (no. at 30 June)	511	529	(18)

FY19 FINANCIAL PERFORMANCE

(V FY18)

12% 23% 31%

REVENUE EBITDA NPAT

OPERATING CASH FLOW

121%

NET CASH POSITION

$23.2M

26

Established Global Business

In all the key mining regions of the world

Smithers - Canada			East Sussex - UK	Rastede - Germany
Vancouver - Canada
	Timmins -Canada	Amsterdam- Netherlands
Salt Lake City - USA
San Luis Obispo - USA
Phoenix - USA			Dubai - UAE
Torreón - Mexico
Coahuila - Mexico					Manila - Phillipines
			Accra - Ghana
	Quito - Ecuador		Parauapebas - Brazil	Jakarta - Indonesia
	Lima - Peru		Belo Horizonte - Brazil
IMDEX Facilities				Townsville - QLD
		Itajai - Brazil		Kalgoorlie - WA
			Brisbane - QLD
not including				Johannesburg
Mendoza - Argentina		PERTH - WA
distributors		South Africa
Santiago - Chile		Adelaide - SA Melbourne	Auckland-
Exploration &						- VIC	New Zealand
Mining Projects

STRONG MARKET PRESENCE ON

70%

OF MINERAL DRILLING PROJECTS GLOBALLY

SALES IN

102

COUNTRIES

27

Clients & Industry Partners

Long-standing collaborative relationships

OUR CLIENTS

Drilling contractors and resource companies globally

INDUSTRY PARTNERS /

DIRECTLY SUPPORTING

LONG-STANDING

THOUGHT LEADERSHIP

MAJOR MINING COMPANIES

DRILLING CLIENTS

AUSTRALIAN

SHAFT DRILLING

28

IMDEXHUB-IQ™

Enabling instantaneous information

01 36 07

Sophisticated driller operable geo-sensors

TRADITIONAL PROCESS

E-MAIL

DBA / DBMS

Survey data	On-site computer	Transfered	Input to
to DBA	database

• Built-invalidation at the time of data collection
• Secure chain of custody for your data
• Real-timeaccess to data anywhere, anytime
• Data agnostic

SQL

Stored and managed

1.33

29

New Discoveries

Deeper and under ground cover

INDUSTRY IS PROGRESSIVELY LOOKING

UNDER DEEPER COVER OVER TIME

1900	1920	1940	1960	1980	2000	2020
0
500								Note: Size of the
								bubble refers to
								Moderate, Major and
1000								Giant discoveries
								Excludes satellite
1500								deposits within
							existing camps.
								Analysis excludes
								Nickel laterites and
2000								under-sea deposits
	Base Metals
							Source: MinEx Consulting
		Gold						© March 2017
2500
	Gold - South Africa
3000		N = 2926

DEPTH (METRES)

30

Deeper Drilling

Denver Gold Forum - September 2019

1. Looking Deeper in outcrop areas

2. Exporing under cover

"One of our aspirations is to grow our asset base, ideally "through the drill bit" by focussing on brownfield and greenfield exploration opportunities globally."

NEWCREST 2019 ANNUAL REPORT

Newcrest's unique mining capabilities opens up all search spaces

NEWCREST BRIEFING PACK

SANDEEP BISWAS, MANAGING DIRECTOR & CEO

31

COREVIBE™

Significant productivity gains for clients

HIGH FREQUENCY PULSE ASSISTED DRILLING FOR WIRELINE CORING OPERATIONS

TRADITIONAL DRILLING

67 SHIFTS

500m

1000m

1500m

2000m

COREVIBE™

47 SHIFTS

UP TO 33%

PRODUCTIVITY

IMPROVEMENT

Minimises hole deviation with high penetration rates

Reduces tripping of inner tube for blockages

Improves penetration rates

Extends bit life

32

XTRACTA™

Significant benefits for clients

ALLOWS DRILLERS TO INSPECT OR CHANGE THE BIT EACH TIME THE CORE IS RETRIEVED

No need to pull the rods to change bits

- the hole is always cased, maintaining hole integrity

Increase	Reduce Risk	Reduce Hole	Drill
Productivity	of Injury	Deterioration	Aggressively

33

MAGHAMMER™

Significant productivity & safety benefits for clients

FLUID DRIVEN

PERCUSSIVE

DRILLING ON A DIAMOND DRILL RIG

TRADITIONAL RC DRILLING	MAGHAMMER™ ON DIAMOND DRILL RIG
AIR POWERED	WATER POWERED

		Significantly safer and zero dust generated
Entire drill hole can be
completed with one rig where
RC & Diamond Drilling required
	Drilling fluid can be
		recycled with AMC SRU™

250m

Reduces costs for rig (mobilisation

and demobilisation) and fuel

500m

Penetration rates are not

affected by water intrusion

750m

Allows rapid drill case setting

1000m

Operates with any

normal drilling fluid

Only limited in depth by

34

1250m

pull back capacity of drill rig

Drill & Blast Industry Challenges

Fragmentation

UNDERGROUND OPERATIONS

ABOVEGROUND OPERATIONS

35

Drill & Blast Industry Challenges

Structure

36

Drill & Blast Industry Challenges

Fume

37

Drill & Blast Industry Challenges Manual, inefficient processes

38