Orbit Garant Drilling : Earnings Document

MANAGEMENT'S DISCUSSION AND ANALYSIS

THIRD QUARTER FISCAL 2022

(Three and nine-month periods ended March 31, 2022)

May 11, 2022

MANAGEMENT'S DISCUSSION AND ANALYSIS

This Management Discussion and Analysis ("MD&A") is a review of the results of operations, the liquidity and the capital resources of Orbit Garant Drilling Inc. This discussion contains forward-looking statements. Please see ''Forward-Looking Statements'' for a discussion of the risks, uncertainties and assumptions relating to these statements.

This MD&A should be read in conjunction with the unaudited interim condensed consolidated financial statements for the three and nine-month periods ended March 31, 2022; as compared with the corresponding periods of the previous year and also with the audited consolidated financial statements and MD&A contained in the Company's annual report for the fiscal year ended June 30, 2021 ("Fiscal 2021").

The Company's third quarter of Fiscal 2022 ("Q3 2022") unaudited interim condensed consolidated financial statements and the accompanying notes were prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts in this MD&A are in Canadian dollars, except when otherwise noted.

In this MD&A, references to the "Company" or to "Orbit Garant" shall mean, as the context may require, either Orbit Garant Drilling Inc. or Orbit Garant Drilling Inc. together with its wholly owned subsidiaries.

This MD&A is dated May 11, 2022. Disclosure contained in this document is current to that date unless otherwise stated.

Percentage calculations are based on numbers in the Financial Statements and may not correspond to rounded figures presented in this MD&A.

Additional information relating to the Company, including the Company's Annual Information Form for the most recently completed fiscal year, can be found on SEDAR atwww.sedar.com.

FORWARD-LOOKING STATEMENTS

Securities laws encourage companies to disclose forward-looking information in order for investors to have a better understanding of a company's future prospects and make informed investment decisions.

This MD&A contains forward-looking statements about the Company's objectives, strategies, financial condition, results of operations, cash flows and businesses. These statements are "forward-looking" because they are based on current expectations, estimates and assumptions about: the markets in which the Company operates; the world economic climate as it relates to the mining industry; the Canadian economic environment; and the Company's ability to attract and retain customers and to manage its assets and operating costs. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Risks and uncertainties that could cause actual results, performance or achievements to differ materially include the ability of the jurisdictions in which the Company operates to manage and cope with the implications of COVID-19, the impact of measures taken by such jurisdictions to control the spread of COVID-19 on the Company's operations, and the economic and financial implications of COVID-19 to the Company.

Actual results could be materially different from expectations if known or unknown risks affect the business, or if estimates or assumptions turn out to be inaccurate. The Company does not guarantee that any forward-looking statement will materialize and, accordingly, the reader is cautioned not to place reliance on these forward-looking statements.

The Company disclaims any intention and assumes no obligation to update any forward-looking statement, even if new information becomes available, as a result of future events or for any other reasons except in accordance with applicable securities laws. Risks that could cause the Company's actual results to materially differ from its currentexpectations are discussed in this MD&A. For a more complete discussion of the risk factors that could cause the Company's actual results to materially differ from its current expectations, please refer to the Company's Annual Information Form dated September 28, 2021, accessible viawww.sedar.com.

COVID-19

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic. Governments responded by implementing emergency measures to minimize the spread of the virus, including the temporary shutdown of businesses deemed to be non-essential. These measures caused significant economic disruption, as well as volatility in equity markets, commodity prices and foreign exchange rates.

Orbit Garant's operations were significantly impacted by these measures beginning late in its fiscal 2020 third quarter ("Q3 2020"), as a number of its drilling projects were put on hold or postponed. In Quebec, as a result of the provincial government's order to minimize non-essential business activity, the Company's operations were suspended from March 24, 2020, until April 20, 2020, at which time they were permitted to resume in a gradual and supervised manner. In addition, drilling activity on certain projects in Nunavut Territory and Ontario was temporarily reduced or suspended. Orbit Garant's international drilling operations were also affected, either as a result of government restrictions on certain business activities, or customer decisions to reduce or delay certain projects.

Orbit Garant considers the health and safety of its personnel, customers, suppliers, and the communities in which it operates to be a top priority. The Company has implemented precautionary health and safety measures across its operations, based on the recommendations, or directives, issued by the public health authorities and governments in the various jurisdictions in which the Company operates.

Management took several measures to mitigate the economic impact of COVID-19 on its business and operations. To ensure Orbit Garant's continuing ability to meet its financial and contractual obligations, the Company: (i) applied for government grants and subsidies made available by various governments in response to COVID-19; (ii) reworked its cost structure and postponed non-essential expenses; (iii) made arrangements with Export Development Canada ("EDC") to temporarily suspend principal and interest payments on its loans from EDC until October 2020 (see Note 16 in the FY2020 Financial Statements); and (iv) made arrangements with National Bank of Canada ("National Bank") to modify the covenants in its senior credit facility (the "Credit Facility"). The Company believes that as a result of these measures it mitigated the risk of not being able to meet its obligations under its credit facilities during this difficult period and that it had sufficient resources to carry on its business operations.

Operationally, the Company implemented multiple initiatives to reduce costs and manage its liquidity position during the period in which drilling activities were reduced. In addition, effective April 1, 2020 to September 30, 2020, Orbit Garant's Management and Directors agreed to take a temporary 15% reduction in their remuneration to further support the Company.

During Fiscal 2021, Orbit Garant recorded a benefit related to the Canadian Emergency Wage Subsidy ("CEWS") program in the amount of $3.2 million, of which $2.9 million was recognized as a reduction of cost of contract revenue and $0.3 million was recognized as a reduction of general and administrative expenses. During Fiscal 2020, the Company recorded a benefit related to the CEWS program in the amount of $3.6 million, of which $3.2 million was recognized as a reduction of cost of contract revenue and $0.4 million was recognized as a reduction of general and administrative expenses. The Company was no longer eligible for the CEWS program in Fiscal 2022, as its drilling activities in Canada have returned to, or surpassed, pre-pandemic levels. The CEWS program was ended by the Canadian government on October 23, 2021.

The Company's drilling activities in West Africa began to gradually resume or ramp up in the first quarter of Fiscal 2021 ("Q1 2021") and have now surpassed pre-pandemic levels. The Company's drilling activities in Chile began to gradually ramp up in the latter half of its Fiscal 2021 fourth quarter ("Q4 2021") and returned to pre-pandemic levels during Q2 2022.

The outbreak of the Omicron variant of the COVID-19 virus ("Omicron") negatively impacted Orbit Garant's productivity starting in late November 2021, as customers in Canada and internationally further heightened restrictions and implemented stricter contact tracing and quarantine protocols due to the increased transmissibility of Omicron, which resulted in temporary interruptions to work in progress. Several of the Company's customers also commenced December holiday project shutdowns, or slowdowns, approximately one week earlier than usual as a precautionary measure due to the spread of Omicron. In January 2022, at the beginning of Q3 2022, many of these customers also delayed the re-start of certain drilling projects following the holidays.

The long-term impact of COVID-19 and / or related variants is unknown. While mineral drilling projects are permitted to operate with appropriate safety measures, government business restrictions could be reinstated in any of the jurisdictions in which the Company operates should there be a significant increase in COVID-19, or COVID-19 variant, case counts. Orbit Garant's drilling activities were negatively affected by Omicron during Q2 2022 and Q3 2022.

Management continues to closely monitor the impact of the pandemic in the jurisdictions in which it operates. As part of its business continuity plan, Orbit Garant continues to manage its variable cost structure and cash prudently, while maintaining the flexibility required to adapt to any potential increase in COVID-19 related business restrictions.

FISCAL 2022 THIRD QUARTER SUMMARY

• • Revenue totalled $45.2 million, an increase of 11.6% compared to $40.5 million in the third quarter of Fiscal

  2021 ("Q3 2021");

• • Gross margin was 0.7%, compared to 7.8% in Q3 2021;

• • Adjusted gross margin (1) (excluding depreciation expense) was 6.7%, compared to 13.1% in Q3 2021;

• • EBITDA(1) totalled $(0.5) million, compared to $3.6 million in Q3 2021;

• • Net loss was $4.1 million, compared to net earnings of $0.7 million in Q3 2021; and

• • Metres drilled totalled 430,508, in line with the 431,370 metres drilled in Q3 2021.

(1) See Reconciliation of non-IFRS Financial Measures

CORPORATE OVERVIEW

Orbit Garant (TSX: OGD) is one of the largest Canadian-based mineral drilling companies, with 217 drill rigs and approximately 1,500 employees. Headquartered in Val-d'Or, Québec, the Company provides both underground and surface drilling services in Canada and internationally to major, intermediate and junior mining companies, through each stage of mineral exploration, mine development and production. Orbit Garant also provides geotechnical and water drilling services to mining or mineral exploration companies, engineering and environmental consultant firms, and government agencies. The majority of Orbit Garant's business activity is currently conducted in Canada. The Company has regional offices and facilities in Sudbury, Ontario and Moncton, New Brunswick, to support its Canadian business activities. Orbit Garant has worked on international projects in the United States, Mexico, Guyana, Chile, Argentina, Burkina Faso, Ghana and Guinea. The Company has established international operating subsidiaries in: Winnemucca (Nevada), U.S.A.; Santiago, Chile; Georgetown, Guyana; Ouagadougou, Burkina Faso; Takoradi, Ghana, and in Conakry, Guinea to support its international operations.

Orbit Garant has a comprehensive infrastructure with vertically integrated manufacturing capabilities. The Company manufactures custom drill rigs, equipment and drilling materials for use in its operations and occasionally sells certain equipment to third parties. Orbit Garant focuses on "specialized drilling", which refers to drilling projects that are in remote locations or, in the opinion of Management, because of the scope, complexity or technical nature of the work, cannot be undertaken by smaller conventional drilling companies.

The Company has two operating segments: Canada (including surface drilling, underground drilling and manufacturing), and International.

For the nine-month period ended March 31, 2022:

• • Specialized drilling services, which typically generate a higher gross margin than conventional drilling services, accounted for approximately 31% of the Company's total revenue, compared to 35% in the first nine months of Fiscal 2021.

• • Approximately 71% of the Company's revenues were generated by gold related operations, and approximately 29% were generated by base metal related and other operations.

• • Surface and underground drilling services accounted for approximately 66% and 34%, respectively, of the Company's revenue.

• • Approximately 71% of Orbit Garant's revenue was generated from major and intermediate mining company projects, compared to 73% in the first nine months of Fiscal 2021. Orbit Garant's drilling contracts with major and intermediate customers are typically from one to five years in length.

• • Approximately 73% of Orbit Garant's revenue was generated from domestic drilling projects, and approximately 27% was generated from international drilling contracts.

BUSINESS STRATEGY

Orbit Garant's goal is to be the leading Canadian-based mineral drilling company, through the pursuit of both domestic and international market opportunities, and through the provision of best-in-class underground and surface drilling services, equipment and personnel for all stages of the mining and minerals business, including exploration, development and production. The Company employs the following business strategies:

• • Focus primarily on major and well-financed intermediate mining and exploration companies operating in stable jurisdictions;

• • Provide conventional, specialized and geotechnical drilling services;

• • Manufacture customized drills and equipment to fit the needs of customers;

• • Maintain a commitment to technological innovation and advanced drilling technologies, such as the Company's ongoing implementation of computerized monitoring and control technologies;

• • Provide training for the Company's personnel to continuously improve labour efficiency and the availability of a skilled labour force;

• • Maintain a high level of health and safety standards in the workplace and promote protection of the environment;

• • Establish and maintain long-term relationships with customers;

• • Cross-sell drilling services to existing customers;

• • Expand the Company's base of operations in strategic regions, such as: the Company's acquisition of Orbit Garant Chile S.A. ("OG Chile") based in Santiago, Chile in December 2015, and the acquisition of the drilling business of Projet Production International BF S.A. ("PPI") in Ouagadougou, Burkina Faso in October 2018;

• • Maintain a sound balance sheet and a judicious deployment of capital; and

• • Evaluate strategic acquisition opportunities to enhance value for the Company's stakeholders.

INDUSTRY OVERVIEW

Orbit Garant provides drilling services, in Canada and internationally, to the minerals industry through all stages of mine development, from exploration through production. Client mining companies consist of major (or senior), intermediate, and junior companies (which generally focus on exploration only). Mining companies' budgets for external drilling services, such as those offered by Orbit Garant, are typically determined by ferrous (iron) and non-ferrous (precious and base) metals prices, and the availability of capital to finance exploration (particularly in the case of juniors) and development programs, and/or ongoing mining operations.