Dear Shareholders

2011 was a year of significant growth. Boart Longyear made a record US$160 million net profit after tax as compared to US$85 million in 2010. Both revenue and EBITDA were up substantially on the prior year. In 2011, our EBITDA was US$356 million (US$222 million in 2010) on revenues of US$2.02 billion (US$1.476 billion in 2010).

While Boart Longyear delivered very good financial performance, it also delivered on several other initiatives that made it a much safer, stronger and better positioned business:

• The company finished restructuring its debt. All previous IPO debt facilities have been retired and replaced with new senior notes and a bank debt facility. These facilities are at low interest rates with staggered maturities and limited covenants. Our leverage remains under 1x EBITDA, providing headroom for any unforeseen market downturns.
• The company continued to make investments in the business, laying a foundation for future growth. The commitment to R&D and bringing new products to market remained steady, with 10 new technologies being launched in 2011.
• A new ERP system, Oracle®, was implemented globally in 2011. This system has brought greater visibility globally by connecting the countries where we operate under one system. The company will now be able to speed transactions and enhance compliance and controls worldwide.
• The Board approved a new environmental sustainability program that focuses on air quality controls, energy and water conservation, and waste and hazardous materials minimisation. This initiative, in addition to our global annual ISO 14001 certification, drove several improvement projects worldwide to reduce our environmental impacts.
• The company invested in new training programs and new equipment and technologies that are inherently safer to operate. Since 2007, Lost Time Days are down 79%, Total Case Incidents Rates are down 29% Lost Time Incidents Rates are down 62% and Severity Rates for lost-time incidents are down 83%.

The business is in great shape and the company is well positioned to deliver growth in 2012 and beyond. I would like to thank my fellow Board members for their support, advice and guidance provided to the company. I would also like to thank our Chief Executive Officer, Craig Kipp, and his executive team for their leadership, dedication and outstanding performance during this record year.