MITCHELL SERVICES LIMITED — Investor Presentation 2021

Jul 15, 2021

NOOSA MINING CONFERENCE 16 July 2021

www.mitchellservices.com.au

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DISCLAIMER

This investor presentation has been prepared by Mitchell Services Limited (“the Company”). Information in this presentation is of a general nature only and should be read in conjunction with the Company’s other periodic and continuous disclosure announcements to the ASX, which are available at: www.asx.com.au.

This presentation contains statements, opinions, projections, forecasts and other material (“forward-looking statements”) with respect to the financial condition, business operations and competitive landscape of the Company and certain plans for its future management. The words anticipate , believe , expect , project , forecast , estimate , likely , intend , should , could , may , target , plan and other similar expressions are intended to identify forward-looking statements. Such forward-looking statements are not guarantees of future performance and include known and unknown risks, uncertainties, assumptions and other important factors which are beyond the Company’s control and may cause actual results to differ from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Any forward-looking statements contained in this document are qualified by this cautionary statement. The past performance of the Company is not a guarantee of future performance. None of the Company, or its officers, employees, agents or any other person named in this presentation makes any representation, assurance or guarantee as to the accuracy or likelihood of fulfilment of any forward-looking statements or any of the outcomes upon which they are based.

The information contained in this presentation does not take into account the investment objectives, financial situation or particular needs of any recipient and is not financial product advice. Before making an investment decision, investors should consider their own needs and situation and, if necessary, seek independent professional advice.

Mitchell Services Limited’s financial statements comply with International Financial Reporting Standards (IFRS). This presentation may include certain non-IFRS performance measures including EBITDA, Underlying EBITDA, EBIT, Underlying EBIT, Underlying NPBT, Underlying NPAT, Gross Debt and Net Debt. These measures are used internally by management to assess the performance of the business. Non-IFRS measures have not been subject to audit or review and should not be considered as an alternative to an IFRS measure of profitability, financial performance or liquidity

To the maximum extent permitted by law, the Company and its directors and advisers of both give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in this presentation. Further, none of the Company, it officers, agents or employees of accepts, to the extent permitted by law, any liability for any loss, claim, damages, costs or expenses arising from the use of this presentation or its contents or otherwise arising out of, or in connection with it. Any recipient of this presentation should independently satisfy themselves as to the accuracy of all information contained herein.

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www.mitchellservices.com.au

MITCHELL SERVICES MARKET PROFILE

ASX Information

Share Price Movement

ASX Stock Symbol MSV Shares Issued 199,954,290 Share Price (at 14/07/2021) A$0.47 Market Capitalisation A$93.97m

Share price movement rolling 12 months

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Board of Directors Executive Management Team

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Nathan Mitchell Scott Tumbridge Executive Chairman Executive Director Peter Miller Robert Douglas Non-Executive Non-Executive Director Director

Neal O’Connor Peter Hudson Non-Executive Non-Executive Director Director

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Andrew Elf Chief Executive Officer

Greg Switala CFO & Company Secretary

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www.mitchellservices.com.au

PEOPLE, RISK AND SUSTAINABILITY

• Implemented critical risk management program. Infield program designed to verify the presence and effectiveness of critical control measures to prevent life changing injuries and fatalities

• Covid 19 has continued to present logistical changes but credit to our entire team who have continued to deliver safe and efficient services to our clients

• Developed and released a Modern Slavery Statement

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www.mitchellservices.com.au

HIGHLIGHTS

• Strong underlying performance excluding impairment loss on trade receivables. Solid operating base to move forward on in a strong market

• Safe and efficient demobilisation from SMS project. Three Epiroc D65 drill rigs from this project were sold for approximately $3.5m with proceeds used to repay equipment finance debt

• SMS Settlement Agreement reached. $5m. • $3m in July

• $1m in September

• $1m in December

• Asset recycling program placed on hold to deploy more rigs to satisfy increasing demand for services

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www.mitchellservices.com.au

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IMPACT OF INCREASED UTILISATION ON REVENUE

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•
Average operating
$175.56m
revenue per rig
continued to increase
due to improved
2nd Half
productivity, pricing and
$120.21m drilling mix
2nd Half
•
Mitchell Services
2nd Half anticipates further
$72.69m increases in operating
rig count in FY2022
2nd Half
1st Half
$40.30m •
Operating rig count
1st Half
2nd Half 1st Half subject to change due
to seasonality or other
1st Half
1st Half factors
FY2017 FY2018 FY2019 FY2020 FY2021 •
96 rigs in fleet
21.6 37.1 48.2 67.7 75 (1H2021)
Average Operating Rig Count
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www.mitchellservices.com.au

HIGH QUALITY REVENUE STREAMS

Revenue by Client Type

• Tier 1 Clients are large / multinational mining & energy companies

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•
A majority of Mitchell Services revenue comes from Tier 1 Clients operating on
long life, low cost mine sites. Approximately 80% of revenue is at the mine
site resource definition, development and production stage which is a
critical service in the mining lifecycle
80.4%
91.3% 86.9% • The strength of the base metals sector and attractive returns has driven the
revenue increase from other clients and we expect this percentage to remain
fairly similar in the second half
•
We maintain our focus on production related services but have exited the drill
and blast sector. We may choose to re-enter this market sector in the future
should an appropriate opportunity arise
19.6%
13.1%
8.7%
•
Expect Tier 1 revenue to increase to circa 90% in FY22
1H2019 1H2020 1H2021
Other Clients Tier 1 Clients
Revenue by Stage in the Mine Lifecycle
Greenfield
Mine Site Exploration &
Exploration & Development Production
Resource Definition
Feasibility
circa 20% circa 80%
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www.mitchellservices.com.au

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REASONS FOR OPTIMISM

• Strong commodity prices for our clients

• Resource capital raisings increasing, and quality drilling results are being recognised by the market

• Both factors are driving demand and increasing utilisation across the industry

• Evidence of rate improvements

• Industry consolidation continues and competitive profile of the market improving

• The federal budget un-capped instant asset write-off has now been extended to the end of FY23. This will have a positive impact on free cash flow

• MSV is trading at less than net tangible asset value based on market values of property, plant and equipment

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www.mitchellservices.com.au

OUTLOOK

• Pipeline of identified opportunities remains strong as does the demand for drilling services particularly from Tier 1 clients.

• Rig utilisation is likely to reach capacity at some stage in calendar year 2021.

• We will invest in organic growth to take advantage of additional opportunities

• Based on current market conditions, commodity prices, current contracts, and strong opportunity pipeline, Mitchell Services expects FY22 .

• Revenue and EBITDA to continue to grow

• Mitchell Services is covered by Morgans.

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www.mitchellservices.com.au

SUMMARY

• Mitchell Services’ vision is to be Australia’s leading provider of drilling services to the global exploration, mining and energy industries

• Mitchell Services has a diversified revenue stream by different drilling types and clients

• Mitchell Services has a high quality client base with a majority of work related to mine site resource definition, development and production

• Further growth in net earnings anticipated in FY22

• Maintain a strong balance sheet to provide flexibility to take advantage of strategic opportunities

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www.mitchellservices.com.au