TSX: GCM, Pink Sheets: GEMCF

Presented by Krish Daftary

The Perfect Investment

Operational momentum

Long-term business sustainability,

predictability, and visibility

Price that allows for a significant

margin of safety

1
 Understanding the Business

What does Gemcom do?

Provides software solutions that help its customers
manage the lifecycle of their mining operations
including:

• Drill-hole data entry in exploration phase

• Mining design & planning
• Mine operations & production management

2
 How Does Mining Work?
• Two main types:
– Open pit mining
– Underground Mining

• Extract tons of ore from the

ground
• Extract tiny bits of precious/base
metals
– i.e. 1 g/ton

• Timing & efficiency matter!

Revenue Sources
• License fees: one-time in nature
• Professional Services
• Update Service & Technical Support
(USTS): recurring in nature, renewed
semi-annually or annually

BREAKDOWN TO COME

3
 Dec ’06 YTD Rev Mix

Dec '05 9-Month Rev Mix Dec '06 9-Month Revenue Mix
Other Other
9% 6%
Professional Fees
14%
Professional Fees
18%
License
44% License
51%

Maintenance
29%

Maintenance
29%

Licensing a large chunk

Surpac Minex Acquisition

• July 19, 2006 - Acquired Australian based Surpac
– For C$28MM
– Represents multiple of 1.5x sales, 9.3x earnings
– C$18.3MM sales, C$3.0MM earnings (LTM Jun-06)

• From July 2002 – July 2005

– Revenues grew by an average of 36% per year
– Earnings grew by an average of 50% per year

• Former key competitor to Gemcom

– 5,000+ users in 89 countries

4
 Surpac Minex Financials
Surpac Acquisition Purchase Price

Cash 13,884,960 • 1.5x sales

Stock 14,916,753 • 9.3x earnings
Acquisition Costs 1,006,842
• Immediately value accretive!
Dilution N/A
(-) Cash 3,005,391
26,803,164 LTM March 30, 2006
• License sales: $11.3MM AUD
• Maintenance sales: $5.8MM AUD
• Professional services: $2.0MM AUD
• Other: $0.2MM AUD

Surpac Minex Acquisition

• Enhances GCM’s competitive profile
– Increased access to European & Australian
markets
– Access to coal, iron ore, lateritic nickel, bauxite,
and oil sands end markets
– Increased manpower to help R&D efforts
– Alleviates some pricing pressure
– Potential cross-selling opportunities

5
 Competitive Positioning
• Gemcom now has a dominant ~40% market
share

• Three companies control 80% of the market

– UK-based Datamine
– Australia-based Maptek

• Other major competitors include in-house

applications

Combined Software Offerings

• EXPLORATION
– GEMS
– Surpac Vision

• MINE DESIGN/MODELING FOR COAL, OIL SANDS, ETC.

– Minex

• MINE PLANNING
– Whittle
– Maximiser

• MINE PERFORMANCE MANAGEMENT

– In-Site

OFFERINGS SPAN THE MINING LIFE CYCLE

6
 Visuals
Minex

MineSched

Major Customers Covered

$139B

$25B $17B

$14B $20B

$15B

7
Mining Industry Overview

Gold Pricing

8
Silver Pricing

Copper Pricing

9
 Zinc Pricing

Gold Reserves & Production

10
 Copper Production
15,500

15,000

GR
14,500
CA
%
2.5
Metric Tons (1,000s)

14,000

13,500

13,000

12,500

12,000
2000 2001 2002 2003 2004 2005

Iron Ore Production

1,800

1,600
C AGR
7. 6%
1,400

1,200
Metric Tons (1,000,000s)

1,000

800

600

400

200

0
2000 2001 2002 2003 2004 2005

11
 Pricing/Production: Gold
Production Gold Price vs. Production 1970-2005
Price ($/t)

3,000 25,000,000

2,500
20,000,000

2,000

15,000,000

1,500

10,000,000

1,000

5,000,000
500

0 0
1970 1975 1980 1985 1990 1995 2000 2005

Pricing/Production: Copper
Production
Copper Price vs. Production 1970-2005
Price ($/t)

16,000,000 4000

14,000,000 3500

12,000,000 3000

10,000,000 2500

8,000,000 2000

6,000,000 1500

4,000,000 1000

2,000,000 500

0 0
1970 1975 1980 1985 1990 1995 2000 2005

12
Pricing/Production: Iron Ore
Production
Price ($/t) Iron Ore Price vs. Production 1970-2005

1,800,000,000 50

1,600,000,000 45

40
1,400,000,000

35
1,200,000,000

30
1,000,000,000

25

800,000,000
20

600,000,000
15

400,000,000
10

200,000,000 5

0 0
1970 1975 1980 1985 1990 1995 2000 2005

Financial Metrics

13
 Price of GCM

Price/share 2.00
Shares Outstanding 50,401,412
(+) Dilution 3,827,562
Total Shares Outstanding 54,228,974
Market Capitalization 108,457,948

(-) Cash 10,224,370

(+) Debt 260,234
(+) Minority Interest 23,975
Enterprise Value 98,517,787

Last Q Gangbuster
3 Months • Acquisition accounted for 62%
Dec-06 Dec-05 of growth
Revenue:
Products and services 11,055,990 4,575,348 • Organic growth accounted for
Third-party products 360,596 30,108 remaining 38% of increase in
Total revenue 11,416,586 4,605,456 revenue
% Growth 147.9%
• Implies 56.2% organic
Cost of revenue 2,273,780 739,315 growth rate!
Gross margin 9,142,806 3,866,141
% Margin 80.1% 83.9% • Annualized, Surpac revenue
totals C$16.9MM
Research and development 2,491,167 1,007,355 Breakdown
Sales and marketing 3,873,253 1,821,495 License 6.2 2.1
% Growth 195.2%
General and administration 416,672 327,382 Maintenance 3.1 1.3
EBITDA 2,549,758 860,052 % Growth 138.5%
Professional Fees 1.6 0.7
% Margin 22.3% 18.7% % Growth 128.6%
% Growth 196.5% Other 0.5 0.5
% Growth 0
Total 16.0 4.6
% Growth 248.3%

14
 PF Combined Historical IS
ANNUALIZED
Dec-06 Jun-06 Jun-05

Gemcom Revenue x 17,967,509 16,895,836

Surpec Revenue x 18,357,379 14,257,695
Total Revenue 44,223,960 36,324,888 31,153,531
% Growth 21.7% 16.6%

Gemcom Gross Profit x 15,052,834 13,818,287

Surpec Gross Profit x 14,903,652 11,526,408
Total Gross Profit 36,571,224 29,956,486 25,344,695
% Margin 82.7% 82.5% 81.4%

Gemcom EBITDA x 3,688,106 2,807,094

Surpec EBITDA x 4,202,142 2,644,825
Total EBITDA 10,199,032 7,890,248 5,451,919
% Margin 23.1% 21.7% 17.5%
% Growth 29.3% 44.7%

Gemcom FCF x 2,010,077 797,022

Surpec FCF x 2,883,870 2,070,485
Total FCF 10,000,968 4,893,947 2,867,507
% of EBITDA 98.1% 62.0% 52.6%

Undervalued?
Annualized Q3 Multiples
Sales 45,666,344 2.16x
EBITDA 10,199,032 9.66x
EBIT 7,450,680 13.22x
Net Income 4,842,942 20.34x
FCFE 6,314,918 15.60x
Not so sure on an absolute basis…
Thoughts on multiples:
• Annualizing a record quarter (aggressive) however…
• Must consider growth in 2007 and beyond and…
• Must consider operational leverage

15
 Relative: EV/S
2006 2007E 2008E
EV EV/R EV/R EV/R

Autodesk Inc. (NasdaqNM:ADSK) 10,123 6.0x 4.9x 4.3x

Business Objects SA (NasdaqNM:BOBJ) 3,658 2.2x 1.9x 1.7x
Cognos Inc. (NasdaqNM:COGN) 3,532 3.0x 2.7x 2.5x
Dassault Systemes SA (ENXTPA:DSY) 6,695 3.8x 3.2x 2.6x
Hyperion Solutions Corp. (NasdaqNM:HYSL) 2,977 3.1x 2.7x 2.4x
Matrikon Inc. (TSX:MTK) 83 1.1x 1.0x ???
Open Text Corp. (NasdaqNM:OTEX) 1,611 3.6x 2.5x 2.2x

Average 4,097 3.3x 2.7x 2.6x

Median 3,532 3.1x 2.7x 2.5x

Gemcom Software International Inc. (TSX:GCM) 99 3.4x 2.2x ???

Slightly undervalued

Relative: EV/EBITDA
2006 2007E 2008E
EV TEV/EBITDA TEV/EBITDA TEV/EBITDA

Autodesk Inc. (NasdaqNM:ADSK) 10,123 17.8x 14.9x 12.9x

Business Objects SA (NasdaqNM:BOBJ) 3,658 11.3x 8.6x 7.7x
Cognos Inc. (NasdaqNM:COGN) 3,532 15.7x 11.7x 10.1x
Dassault Systemes SA (ENXTPA:DSY) 6,695 12.3x 10.7x 9.6x
Hyperion Solutions Corp. (NasdaqNM:HYSL) 2,977 14.2x 11.2x 9.5x
Matrikon Inc. (TSX:MTK) 83 8.5x 6.3x ???
Open Text Corp. (NasdaqNM:OTEX) 1,611 13.2x 8.0x 6.9x

Average 4,097 13.3x 10.2x 9.4x

Median 3,532 13.2x 10.7x 9.5x

Gemcom Software International Inc. (TSX:GCM) 99 15.7x 9.7x ???

Slightly undervalued

16
 Relative: P/E
2006 2007E 2008E
EV P/E P/E P/E

Autodesk Inc. (NasdaqNM:ADSK) 10,123 31.6x 25.7x 20.7x

Business Objects SA (NasdaqNM:BOBJ) 3,658 21.2x 16.7x 13.8x
Cognos Inc. (NasdaqNM:COGN) 3,532 24.7x 18.8x 16.2x
Dassault Systemes SA (ENXTPA:DSY) 6,695 22.6x 20.2x 17.2x
Hyperion Solutions Corp. (NasdaqNM:HYSL) 2,977 30.3x 25.1x 21.1x
Matrikon Inc. (TSX:MTK) 83 19.0x 17.1x ???
Open Text Corp. (NasdaqNM:OTEX) 1,611 23.3x 17.6x 13.8x

Average 4,097 24.7x 20.2x 17.1x

Median 3,532 23.3x 18.8x 16.7x

Gemcom Software International Inc. (TSX:GCM) 99 36.0x 22.4x ???

In-line

Relative: Growth Rates

EV 1-Yr Revenue G 1-Yr EBITDA G Est. LT G Rate

Autodesk Inc. (NasdaqNM:ADSK) 10,123 24.25 21.74 16.80

Business Objects SA (NasdaqNM:BOBJ) 3,658 16.40 23.14 16.15
Cognos Inc. (NasdaqNM:COGN) 3,532 7.63 (2.49) 13.73
Dassault Systemes SA (ENXTPA:DSY) 6,695 23.89 14.19 9.85
Hyperion Solutions Corp. (NasdaqNM:HYSL) 2,977 15.12 29.02 13.09
Matrikon Inc. (TSX:MTK) 83 1.49 (20.02) NA
Open Text Corp. (NasdaqNM:OTEX) 1,611 12.59 48.36 10.00

Average 4,097 14.48 16.28 13.27

Median 3,532 15.12 21.74 13.41

Gemcom Software International Inc. (TSX:GCM) 99 16.60 44.72 ???

Grossly undervalued

17
 Application Software Comps

P/Diluted
TEV/LTM Total TEV/LTM EPS Before TEV/ NTM TEV/NTM
Rev EBITDA Extra Total Rev EBITDA P/NTM EPS

Mean 4.2x 21.7x 39.4x 3.0x 14.7x 31.2x

Median 3.2x 15.9x 31.2x 2.8x 13.1x 26.5x

Gemcom 3.4x 15.7x 36.0x 2.2x 9.7x 22.4x

Undervalued on a forward basis

Business Software & Services Comps

P/Diluted
TEV/LTM TEV/LTM EPS Before TEV/ NTM TEV/NTM
Total Rev EBITDA Extra Total Rev EBITDA P/NTM EPS

Mean 4.1x 22.2x 38.3x 2.8x 15.5x 35.0x

Median 2.4x 14.1x 30.9x 2.3x 12.9x 25.6x

Gemcom 3.4x 15.7x 36.0x 2.2x 9.7x 22.4x

Undervalued on a forward basis

18
 Internet Software & Services Comps

P/Diluted
TEV/LTM TEV/LTM EPS Before TEV/ NTM TEV/NTM
Total Rev EBITDA Extra Total Rev EBITDA P/NTM EPS

Mean 5.0x 25.8x 40.9x 2.9x 18.4x 34.9x

Median 2.5x 15.1x 31.4x 2.4x 13.6x 25.9x

Gemcom 3.4x 15.7x 36.0x 2.2x 9.7x 22.4x

Undervalued on a forward basis

Multimedia & Graphics Software Comps

P/Diluted
TEV/LTM TEV/LTM EPS Before TEV/ NTM TEV/NTM
Total Rev EBITDA Extra Total Rev EBITDA P/NTM EPS

Mean 4.9x 25.3x 41.8x 2.9x 18.3x 34.4x

Median 2.5x 15.2x 31.7x 2.4x 13.6x 25.8x

Gemcom 3.4x 15.7x 36.0x 2.2x 9.7x 22.4x

Undervalued on a forward basis

19
 Security Software & Services Comps

P/Diluted
TEV/LTM TEV/LTM EPS Before TEV/ NTM TEV/NTM
Total Rev EBITDA Extra Total Rev EBITDA P/NTM EPS

Mean 5.0x 24.7x 41.0x 2.9x 18.1x 34.3x

Median 2.6x 15.2x 31.5x 2.4x 13.6x 25.8x

Gemcom 3.4x 15.7x 36.0x 2.2x 9.7x 22.4x

Undervalued on a forward basis

Technical & System Software Comps

P/Diluted
TEV/LTM TEV/LTM EPS Before TEV/ NTM TEV/NTM
Total Rev EBITDA Extra Total Rev EBITDA P/NTM EPS

Mean 4.9x 24.8x 43.0x 2.9x 17.8x 35.4x

Median 2.7x 15.3x 32.4x 2.4x 13.5x 25.7x

Gemcom 3.4x 15.7x 36.0x 2.2x 9.7x 22.4x

Undervalued on a forward basis

20
 Reasons to Hate the Stock

Why I’m Hesitant

• Valuation may be rich
• Business ever changing, relies heavily on R&D
• Half of revenue stream dependent on bulky license sales
• Strengthening CAD
• Dilutive warrants, options could suppress stock in short-
term
• Business difficult to understand
• No catalysts
• Integration risk
• Transaction comp
• 52-week highs

21
Missed the Boat?

…or more room to run?

GARP?

22