ORBIT GARANT DRILLING INC. ACQUIRES FORAGE + AND 100,000 METRE SPECIALIZED DRILLING CONTRACT FOR OSISKO MINING CORP.
Val-d’Or, Quebec, October 14, 2008 — Orbit Garant Drilling Inc. (TSX: OGD) today announced the acquisition of Forage+. Under terms of the transaction, Orbit Garant has purchased all of the issued and outstanding shares of 9129-5632 Quebec Inc., doing business as Forage +, a specialized drilling company operating seven drilling rigs. As part of the transaction, Orbit Garant is acquiring a 100,000-metre drilling services contract with Osisko Mining Corp. (TSX:OSK), a Forage+ customer.
The purchase price consists of $1.5 million in cash and 457,142 payable in common shares of Orbit Garant representing an aggregate amount of $1.6 million, issued at an allocated value of $3.50 per share and the payment amount of $624,456 to the Vendors in order to compensate for the difference between the 30-day average trading price of $2.134 per share and the allocated value of $3.50 per share.
The parties have agreed to a contractual escrow agreement with a release period of over 30 months. Larry Belanger, CEO of Forage+, has entered into a 12-month employment contract with Orbit Garant.
“We expect this transaction to be immediately accretive and to generate approximately $2.6 million in incremental EBITDA over the next 12 months,” said Eric Alexandre, President and Chief Operating Officer. “This strategic acquisition will further leverage our established infrastructure, expand on our already strong market position of specialty drilling in the Abitibi region of Quebec, and bring the company an important new customer.”
Osisko hold a 100 per cent interest in the Canadian Malartic gold deposit in the Abitibi region of Quebec, Canada. On September 8, 2008, Osisko filed an initial NI 43-101- compliant resource estimate for the main deposit, with a gold resource of 7.69 million ounces in the Measured & Indicated category and 720,000 ounces in the Inferred category.
Eric Alexandre added, “Completion of the drilling program at the Canadian Malartic gold deposit will require the use of additional specialized drills. Through our manufacturing subsidiary, Soudure Royale, Orbit Garant is very well positioned to meet this need.”
About Orbit Garant
Orbit Garant is one of the largest Canadian-based drilling companies, providing both underground and surface drilling services in Canada and internationally through its 119 drills and approximately 500 employees. Orbit Garant provides services to major, intermediate and junior mining companies, through each stage of mining exploration, development and production.
Forward-looking information
This press release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Orbit Garant Drilling Inc. (the “Company”) and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company’s regulatory filings available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.
For further information:
| Eric Alexandre President and Chief Operating Officer (819) 824-2707 Ext. 233 | Philip Koven Investor Relations (416) 447-4740 Ext. 235 |