South West Pinnacle Exploration Limited has informed the Exchange about Investor Presentation
South West Pinnacle Exploration Ltd (Formerly known as South West Pinnacle Exploration Pvt Ltd) CIN NO.: L13203HR2006PLC049480 Regd & Corp Office: Ground Floor, Plot No.15, Sector-44, Gurgaon 122003, Haryana, India. T: +91 124 4235400, 4235401 F: +91 124 4235402 E: info@southwestpinnacle.com W: www.southwestpinnacle.com
ISO 9001: 2015 Certified Company
Date: 14.11.2022
To,
Manager, Listing Department, National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai-400051
Symbol: SOUTHWEST
Subject: Updated Investor’s Presentation
Dear Sir/Madam,
Please find enclosed herewith copy of updated Investor’s Presentation with Q2 & H1 results of FY 2022-23.
This is for your information and record.
Thanking you, Yours faithfully,
For South West Pinnacle Exploration Limited
Vaishali Company Secretary & Compliance Officer
Q2 & H1 FY23 Investor Presentation November 2022
Disclaimer
This presentation has been prepared by and is the sole responsibility of South West Pinnacle Exploration Limited (SWPE, the “Company”). By accessing this presentation, you are
agreeing to be bound by the trailing restrictions.
This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer or recommendation to purchase or subscribe
for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment thereof. In
particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. No representation or warranty, express
or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such
information and opinions are in all events not current after the date of this presentation. There is no obligation to update, modify or amend this communication or to otherwise notify
the recipient if the information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
Certain statements contained in this presentation that are not statements of historical fact constitute “forward-looking statements.” You can generally identify forward looking
statements by terminology such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “objective”, “goal”, “plan”, “potential”, “project”, “pursue”,
“shall”, “should”, “will”, “would”, or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and
other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or
implied by such forward-looking statements or other projections. Important factors that could cause actual results, performance or achievements to differ materially include, among
others: (a) our ability to successfully implement our strategy, (b) our growth and expansion plans, (c) changes in regulatory norms applicable to the Company, (d) technological changes,
(e) investment income, (f) cash flow projections, and (g) other risks.
This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The Company
may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes.
2
Table of Contents
Company Overview
Business Overview
Industry Overview
Consolidated Financial Highlights
Way Ahead
3
Company Overview
About Us
▪
▪
Integrated Service Provider offering end-to-end Drilling & exploration of Natural resources (Coal, Ferrous, Non-Ferrous & Atomic Minerals and Conventional & Un-conventional Oil & Gas)
Successfully Completed over 110 projects during 15 years journey since inception for all leading Government & Private Organizations
▪ Owns 38 Top drive Hydro static Drillings Rigs with state-of-the-art technology with capacities to drill up to a depth of 2,500 meters in all domains
▪
SWPE possesses three 2D/3D Digital Seismic Recording systems having 8,500 channels, supported with 7 Vibriosis to conduct Land Seismic surveys for Coal, Oil & Gas
▪ Owns three latest generation Geophysical
logging units, DGPS & total stations for land survey and software's for processing and interpretation of Geological and geophysical data
▪
▪
SWPE has an experienced team of dedicated professionals to look after key areas of business and dynamic workforce capable of efficient project deliveries & execution
Company presently has 16 running projects in various geographical locations across India
Services Offered
Oil & Gas Exploration Using Passive Seismic Tomography
Aquifer Mapping Services
Coal & Mineral Exploration Services
Geological & Geophysical Services
RC Drilling Services
2D/3D SEISMIC For Coal Exploration Services
2D/3D SEISMIC For Oil & Gas Exploration Services
CBM Exploration Services
l
e v i t a u m u C
l
a t o T
) s r e t e M
( g n
i l l i r D
796,048
1,050,000
+22%
1,400,000
1,850,000
2,000,000 21,30,000
2017
2018
2019 2020
2021
2022
SWPE has completed more than 21.3 Lakh meters of drilling, 5 Lakh meters of Geophysical Logging, 464 sq.km. of 3D Seismic surveys, 350 LKM of 2D seismic Survey for exploration of Coal, Mineral, Oil and Gas
5
Journey So Far
▪ Incorporation of Company ▪ Commencement of Drilling Operations
for Core Drilling
▪ Kicked off Company’s 1st CBM
Exploration project
▪ Entered into niche area of LDC (Large Diameter Core Drilling - 8 inches core) for Diamond Exploration
▪ Entered into unconventional Oil & Gas
Sector including CBM Production Drilling
▪ Successfully completed 50 Exploratory
Projects in India
▪ Successfully submitted 1st detailed
Geological Report for Coal Exploration
▪ Entered into oil & gas exploration using
PST (Passive Seismic tomography) technology
▪ Awarded 11-year Copper Mining
Contract valuing over USD 125 Million through JV in Oman and activities commenced now
▪ Awarded coal block in Jharkhand, spread
in 2.66 Sq. Km. having a geological reserve of 84 Million Tons ▪ 110 Operations Completed
2006-2009
2010-2012
2013-2015
2016-2019
2020-2022 till date
▪ Commenced integrated
exploration project including Geology, Geophysics, Geological report along with Drilling ▪ Commencement of Overseas
Drilling in Oman
▪ Entered into Reverse Circulation (RC) Drilling, a niche field of drilling
▪ Entered into Aquifer Mapping ▪ Listing on NSE ‘EMERGE’ Platform in 2018 ▪ Entered into a JV in Oman and bought 35%
Equity stake in Alara Resources LLC
▪ Migrated from NSE EMERGE to NSE Main Board
in 2019
▪ Entered into 3D seismic Data Acquisition for Oil
& Gas & minerals
▪ First Company to be awarded integrated project for seismic and exploration for coal by CMPDI
6
Strong & Experienced Management
Mr. Vikas Jain Promoter, MD & Chairman
Mr. Piyush Jain Co-Promoter & Joint Managing Director
▪ Guiding force behind strategic decisions backed by industry experienced professionals to run business
▪ Over 15 years of experience in exploration and
Mining sector
▪ Responsible for business development, finance,
formulation of overall strategy for growth, future prospects and client relationships besides administrative affairs
▪ Completed MBA from Johnson & Wales University,
USA
▪ Has over 12 years of experience in exploration and
▪
mining sector Spearheads operational responsibilities, procurement, HSE, and Business Development of Company
▪ Completed Masters in Management &
Entrepreneurship from Nottingham Trent University, UK
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Strong & Experienced Management
Mr. Roger James Lord Director
Mr. Rajendra Prasad Ritolia Independent Director
Mr. Jitendra Kumar Mishra Independent Director
Mrs. Sudha Maheshwari Independent Director
▪ Aged 73 years, Director of
Company since 2010 ▪ Started career in Drilling
Industry in Australia and has rich experience of over 4 decades
▪ Associated with Company
since inception
▪ Registered NSW Driller issued with Class License 6 by Water Regulation Officer, Australia
▪ Aged 72 years, holds Post Graduation in Mining from Leoben, Austria (under UNO scholarship) & post-graduation diploma in Management from AIMA
▪ Ex- Chairman-cum-Managing Director of Central Coalfields Ltd, Ranchi, and advisor (Coal) to Managing Director, Tata Steel Ltd
▪ Aged 50 years, qualified
▪ Aged 40 years, Completed
Chartered Accountant (CA), Certified Forensic Accounting & Fraud Detection Auditor (FAFD) & Cost & Management Accountant (CMA)
▪ Over 22 years of experience in various Finance & Accounts roles
▪ Vast experience in the field of Finance, Business Planning & Restructuring, Budgeting, Taxation, and Risk Management
Graduation and post-graduation in Economics from St. Xavier’s, Mumbai & University of Warwick, U.K.
▪ MBA in Marketing from Warwick Business School
▪ Over 12 years of experience in business strategy, marketing & Communications
▪ A communications expert,
Founder & CEO at Wordswork (a unit of B.R.M Management & Consultancy) & provides marketing advisory, content & digital marketing solutions
Well-experienced team of dedicated professionals to look after key areas of business; Respective business/division heads are ably supported by young &
energetic strong force of over 550 employees with well-defined roles & responsibilities
8
Key Strengths
01
02
03
04
05
06
Presence Across Various Domains Of Drilling & Exploration
Capability of Successful Projects Deliveries
Qualification Credentials
Client Retention
Experienced Management Team
Robust Order Book
9
Business Overview
Business Overview
COAL & MINERAL DRILLING SERVICES
offers
Core Drilling,
Large SWPE Diameter Core Drilling & non-core drilling through RC (Reverse Circulation), DTH (Down –the- Hole) & Mud Rotary technologies.
2D/3D SEISMIC EXPLORATION
SWPE has knowledge & ability to handle any challenges involved with Land 2D/3D seismic exploration, Coal ,Oil & Gas
Supplies seismic solutions covering
SWPE has completed over 20 Lac Meters of drilling through above mentioned technologies till date.
• 2D/3D LAND SEISMIC DATA ACQUISITION
• 2D/3D LAND SEISMIC DATA PROCESSING
GEOLOGICAL & GEOPHYSICAL SERVICES
MINING SERVICES
SWPE has strong Geological & Geophysical Services Division with team of 15 experienced Geoscientists
SWPE is equipped to provide Mining Services for Coal including OB, Ferrous and Non- ferrous minerals
Capable of providing on-site integrated exploration services, both for coal & other mineral resources like – Limestone, Atomic Minerals, etc.
Company has Copper/Gold Mining Services through JV in Oman
CBM EXPLORATION SERVICES
CBM PRODUCTION SERVICES
Leading CBM exploratory drilling service provider in country; Provided services to prominent customers like – Reliance Industries, Oil India, Dart Energy
Completed over 60 CBM core wells to date - highest in the country. SWPE has fleet of 2 CBM Exploratory Drill Rigs that are capable of drilling up to 2,000 m depth
SWPE has drilled 184 CBM Production wells up to 1,200 m depths, for its customer – Reliance Industries
Company has two CBM Production Drilling Rigs capable of drilling up to 1,500 m depths
GEOTHERMAL AND SHALE GAS EXPLORATION
SWPE is one of leading companies to drill four wells each for Shale Gas & Geothermal Exploration respectively
Development of Geothermal Energy is present day focus area for our Government
AQUIFER MAPPING
SWPE aims to identify & map aquifers across India to quantify available groundwater resources, and propose plans appropriate to scale of demand and aquifer characteristics
Equipped with multiple disciplines & scientific approaches including remote sensing, hydrogeology, geophysics, hydrochemistry, drilling, groundwater modelling, and management for providing time bound & cost effective services for completion of Aquifer mapping studies
11
Opportunities
Drilling and Exploration of Coal
▪ Large number of unexplored mines of
coal, iron ore and bauxite in India present considerable opportunities for future discoveries of sub-surface deposits
▪ Availability of large coal reserve in India and Government's thrust to enhance production
Oil & Gas Exploration
▪ GoI has adopted several policies to address rising
oil demand
▪ 100% FDI in many segments of this sector ▪ OLAP announced by Govt. to reduce country's
dependence on imports
▪ Govt. recently launched OLAP Bid for
International Competitive Bidding – total 21 Blocks are on offer
Drilling and Exploration of Non-coal Minerals
▪ Over 500 non-coal mineral blocks, partially or minimally explored under current leases, are now up for grabs through competitive bidding ▪ Re-allocation of several non-producing blocks of state-run companies, is giving lot of enthuse to private players as many of these blocks have abundant proven resources
▪ Captive leases are allowed to sell the minerals in
open market as per new provisions
Unconventional Sources of Energy
▪ Abundant unconventional sources of energy in
India, most of them unexplored – opening many opportunities in this area
▪ These unconventional sources of energy mainly
include ✓ Geothermal Power ✓ Shale Gas ✓ Coal bed Methane (CBM)
12
Opportunities
Exploration & Mining Opportunities In Oman & Middle East
Infrastructure Projects
▪ Oman Government looking to diversify & reduce dependence on oil revenue and to create jobs for Omani nationals – growth is anticipated in mining sector following discovery of significant reserves of minerals including gold & copper
▪ SWPE entered into JV with renowned
Australian Exploration & Mining company, Alara, in Oman, & started operations in 2018 through this JV
Coal Block for Commercial Mining
▪ GoI recently made an announcement regarding opening up of coal blocks for commercial coal mining by private players
▪ Participated & won such coal block namely
Jogeshwar and Khas Jogeshwari in Jharkhand through forward auction
▪ Process of mine development is underway – this
has great potential & opens up immense opportunity for Company’s growth
▪ Infrastructure sector a key driver for Indian
economy. With Government's impetus to create
infrastructure, demand for steel & cement to
increase, which will help create opportunities for
exploration & mining
Aquifer Mapping & Hydro Geological Services
▪ Rising focus on “aquifer management” due to
importance of groundwater – Central Ground Water Board (CGWB) has taken up National Project on Aquifer Management to formulate sustainable aquifer management plan
▪ CGWB launched aquifer mapping projects across India.
Company expects to benefit from this & get more projects in future
▪ Recent ‘Nal se Jal’ initiative of Government in rural
India also opening up new opportunities
13
Operations in Oman
SWPEL entered into JV Agreement with Alara Resources, a well known Australian exploration & mining company in 2018
JV has been awarded an 11 year copper mining contract
Started Mining operations in February 2022
$125 mn. Contract Value over 11 years
Rationale
▪ Oman is the second largest country after Saudi Arabia in Gulf Cooperation Council region with huge resources of copper, Gold, Silver, Chromite, Lead, Nickel, Manganese and Zinc. These reserves are highly undeveloped due to preference for oil sector growth
▪
▪
In 2014 Omani Government decided to diversify & reduce dependence on oil reserves & created public authority under Ministry of Commerce and Industry named Mining Development Oman (MDO) to regulate & expand mining activities, & to strengthen private sector involvement & investment in this sector
The move would also generate employment opportunities for Omani nationals
Mr. Vikas Jain CMD, SWPE (Standing 4th from right) along with Alara Resources LLC team at the commencement of Copper Mining Operations in Oman.
14
Coal Block Acquisition
Govt. Impetus On Coal Production
▪ Government of India recently allowed commercial coal mining by private
players to cater to ever-increasing coal demand in India
▪
Private players now free to sell coal in open market after winning coal block by going through auction process
SWPE recently won a commercial coal block for commercial coal mining in the state of Jharkhand
Total Geological block area - 2.66 Sq. Km.
Est. Geo reserves 84 MT
Grade of the coal Block: W-IV
▪ Government is putting more & more coal blocks for auction regularly for faster development of mines by private players to accelerate coal production
▪ Government of India has targeted to accelerate pace of coal production so
as to reach 1 billion ton level by 2024
▪ Ministry of Coal has reengineered & simplified Mining plan preparation & approval process & is facilitating private players by providing single window clearance besides other industry-friendly measures to attract investment in this sector
▪
Company’s decision to enter into coal mining is considering above industry- friendly decisions taken by the Government
Process for clearances and Mine development activities has commenced
Planned to start coal production within next 30 months
15
Marquee Clients
16
Various Projects Handled
CBM Production DrillingAt Sohagpur, MP For Reliance Industries
CBM Production Drilling for Reliance Industries – completion of 100 wells
CBM Exploratory Drilling at Satpura, MP for Dart Energy
Large Diameter Kimberlite core (8”) for Rio Tinto at Bunder, MP – Drilled by BLY LF230 upto a depth of 352 Meters. Largest coring done in India tilldate
Iron and Manganese ore
Detailed Exploration for Coalat Raham Coal Block for CMPDI
Core drilling for Chromitefor Tata Steel Limited
3D Seismic Project of OIL India Limited in Bikaner Rajasthan
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CSR Activities
Environment Protection
▪ Participated in massive plantation drive organized by social organization and planted sizeable
number of plants in and around Gurugram
Public Health
▪
SWPE contributed fully equipped ambulances to hospital in Gurugram during 2nd wave of COVID
▪ Contributed to Sant Parmanand Hospital Delhi for free Cataract operations of underprivileged
section of society
Education
▪ Company supports meritorious children of society who cannot afford to pursue higher studies
and bear their education expenses
Community Development
▪
SWPE contributed significantly towards marriages of girls whose parents’ financial background is not sound enough
▪ Undertakes various community development projects wherever it has projects on a PAN-
India basis, involving local citizens
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Industry Overview
Coal as an Energy Source
India has estimated geological coal reserves of 344 Billion Tons
Total coal production in India at present is around 729 Million Tons per Annum
Coal continues to be biggest energy source – over 70% of power generation comes from coal-based plants presently
Coal is preferred source of energy due to its’ abundant availability & affordability
Present Market Scenario of Coal
There is a gap in demand and supply of coal globally, affecting power generation by thermal plants
China facing severe power problems due to shortage of coal, making coal prices skyrocket
To accelerate coal production, Ministry of coal set up committee to review/benchmark timelines in execution of coal Mining projects including tendering process
By 2029-30, total installed capacity of power generation is estimated to be more than double
Coal supports many non-power industries as well viz. Cement, Fertilizer, Sponge Iron, Aluminum & host of other industries in organized & unorganized sector
Government of India has targeted to enhance coal production by 25% to 30% in three years
Government of India putting all-out efforts to enhance coal supplies & carrying out various policy changes
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Financial Highlights
Consolidated Statement of Profit & Loss
Particulars (in Rs. Crore)
Total Revenue
Cost of Materials Consumed
Employee Cost
Other Expenses
EBITDA
EBITDA Margin
Other Income
Depreciation
EBIT
Finance Cost
Share of Profit from JVs
Profit before Tax
Tax
PAT
PAT Margin
EPS (in Rs.)
Q2 FY23
24.85
10.41
4.52
5.97
3.95
15.88%
2.03
1.78
4.20
1.36
-0.09
2.93
0.67
2.26
9.08%
0.81
Q2 FY22
27.95
5.75
4.68
11.90
5.64
20.16%
0.88
1.83
4.69
1.21
0.08
3.40
1.11
2.28
8.16%
0.82
Y-o-Y
(11.12%)
(29.97%)
(428 bps)
(10.41%)
(13.66%)
(1.03%)
92 bps
(1.22%)
22
Consolidated Balance Sheet Statement
ASSETS (Rs. Crs.) Property, plant & Equipment Intangible Assets under Development Right of Use assets Goodwill Investment Property FA – Investments FA - Other FA Deferred Tax Assets Other Non-Current Assets Total Non Current Assets FA - Trade Receivables FA - Cash & cash equivalents FA - Bank balances FA - Other Financial Assets Other Current Assets Current Tax Assets Inventories Loan Total Current Assets Total Assets
Sep-22 57.51 5.84 2.05 0.11 3.66 2.56 3.52 0.00 2.71 77.98 60.36 0.29 8.83 1.47 12.68 0.00 39.59 0.33 123.57 201.55
Mar-22 50.20 4.29 2.18 0.11 3.84 2.43 5.43 0.00 3.04 71.51 66.68 2.97 4.67 1.91 6.37 0.02 35.09 0.00 117.71 189.22
EQUITY AND LIABILITIES (Rs. Crs.) Shareholders Funds Share Capital Other Equity Non Controlling Interest Non Current Liabilities Long Term Borrowings Lease Liability Provisions Other Financial Liabilities Deferred tax liabilties Other non-current liabilities Current Liabilities Short term Borrowings Trade Payables Other Financial Liabilities Lease Liability Other Current Liabilities Short term Provisions Current Tax Liability (Net) Total Equity & Liabilities
Sep-22 108.69 27.90 80.79 0.00 22.01 14.84 2.03 0.42 0.04 4.45 0.23 70.84 48.59 14.75 4.26 0.15 0.52 1.05 1.53 201.55
Mar-22 104.93 27.90 77.03 0.00 20.47 13.43 2.10 0.39 0.04 4.27 0.23 63.81 35.35 19.65 5.46 0.14 0.67 1.02 1.53 189.22
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Historical Consolidated Performance Highlights
Revenue (Rs. Crs.)
EBITDA (Rs. Crs.)
PAT (Rs. Crs.)
Debt to Equity
+11%
118
104
79
85
86
24
23
25
18
16
9
9
+6%
3
10
11
0.6
0.5
0.5
0.5
0.4
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
EBITDA Margin (%)
PAT Margin (%)
RoCE (%)
RoE (%)
31.0%
21.2%
18.8%
22.7% 21.2%
11.5%
11.1%
9.8%
9.2%
17.6%
15.3%
3.8%
13.2% 13.2%
8.8%
12.7%
11.7%
10.8% 10.4%
3.9%
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
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Way Ahead
Way Ahead
Full-fledged Exploration Service Company ▪ Capitalize on being only full-fledged exploration service company in India having expertise, manpower, resources & equipments providing end-to-end drilling, exploration & allied services
▪ Expect our core exploration service business to continue to grow at ~20-25% per annum over near to medium term. Strive to be preferred choice of exploration service contractors for marquee clients
Niche Capabilities ▪ Utilize our capability of maneuvering our bouquet of exploration services across minerals, oil & gas, geothermal energy, 2D/3D seismic study & aquifer mapping according to market cycles & needs
Robust Asset Utilization ▪ Company has multi-purpose rigs which can be used for exploration across various applications & domains for different types of minerals. Thus, we have robust asset utilization irrespective of the industry cycle
Next level of growth ▪ With strong balance sheet, Company is entering into mining business as next phase of expansion
that is expected to give over 2-3x growth in top line & significant margin improvement.
▪ Gradual capex over 5-7 years – mainly financed by mix of internal accruals & debt
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Way Ahead
Exploration, Infrastructure & Allied Services
Growth in core exploration service business expected to continue at ~20% P.A over near & medium term
+20%
106
2021
2026E
• Order book position as in Nov’
22 - Rs. 245 Cr
Coal Block Acquisition
Operations in Oman
Mine development activities started. Plans to start coal production in by FY 2024-25
Total Capex estimated is ~Rs. 240 crores upto production
• Company would require Rs. 240 crores* as capex upto to land acquisition,
coal production towards payment fee etc.)
commencement of Government equipment & other infra development.
Agencies (upfront
• To be funded through debt, internal accruals and receipts against Off-take agreements or any other mode of funding as per market scenario at the time of fund raising
Post that, capex would be funded through internal accruals from coal business only
Revenues to kick in from FY2025. Expect ~Rs. 700 – 800 crores of revenue from FY25-FY27
Awarded an 11 year copper mining contract of USD 125 mn.
(~Rs. 1015 crores)
EBITDA Margins in the range of 20% - 22%
EBITDA Margins in the range of 40% - 42%
Net Margin in the range of 5% - 6% with assured yearly profit of Rs. 2-3 crores
*Out of Rs. 243 crores, Rs. 72 crores approx. payable as upfront fee shall be adjustable against future payments to Governments by way of Royalty & Revenue share, thus leaving effective capex of Rs. 171 crores only
27
Thank You
Company :
Investor Relations Advisors :
South West Pinnacle Exploration Ltd. CIN: L13203HR2006PLC049480 Mr. Dinesh Agarwal, CFO
dinesh.agarwal@southwestpinnacle. com
Tel: +91 124 4235402
Adfactorspr Pvt. Ltd.
Mr. Amit Sharma amit.sharma@adfactorspr.com
Mr. Rahul Trivedi rahul.trivedi@adfactorspr.com
www.southwestpinnacle.com
www.adfactorspr.com
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