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Endeavour Posts Record Performance in Q4, Meets 2016 Guidance and Expects Further Production Growth and AISC Reduction in 201...
Endeavour Mining Corporation (TSX:EDV)
Intraday Stock Chart
Today : Monday 23 January 2017
Endeavour Posts Record Performance in Q4, Meets 2016 Guidance and Expects Further Production Growth and AISC Reduction in 2017
View News Release in PDF Format
Q4 and Full Year 2016 Highlights:
Record Q4 performance with production of 175koz, up 20% over previous quarter, and AISC of circa $865/oz, down 4%
2016 guidance achieved with record production of 584koz, up 13% on prior year, and record low AISC of circa $895/oz, down 3%
2016 Free Cash Flow (before growth projects, WC, tax and financing cost) increased by 60% to circa $135m, in line with guidance
Year-end Net Debt decreased from $144m to $25m
Well positioned to finance growth projects with $335m in available sources of financing and liquidity
2017 Outlook:
Gold production expected to increase to 600-640koz, excluding Houndé, and AISC expected to decrease further to $860-905/oz
Free Cash Flow (before growth projects, WC, tax and financing cost) expected to increase to $150m, based on the 2016 realized gold price of circa $1,240/oz
Continued strong focus on internal growth opportunities:
Houndé construction remains on-time and on-budget; first gold pour expected in Q4
Ity Feasibility Study expected to improve with inclusion of high-grade discoveries
5-year exploration strategy implemented, 2017 budget increased to $40m
George Town, January 23, 2017 - Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) is pleased to announce its preliminary financial and operating results for the fourth quarter and full year 2016, with highlights provided in the table below.
Table 1: Key Preliminary Operational and Financial Highlights
(All 2016 amounts exclude discontinued Youga operation,
while 2015 amounts include Youga.) Units Quarter ended, Year ended December 31,
Dec. 30, 2016 Sept. 30, 2016 Dec. 30, 2015 2016 2015 Change
Gold Production oz 175, 146 146,425 136,844 583,712 516,646 +13 %
Realized Gold Price $/oz 1,205 1,328 1,102 1,240 1,157 +7 %
AISC $/oz ~865 898 934 ~895 922 (3 %)
All-in Sustaining Margin $/oz ~340 430 168 ~345 235 +47 %
All-in Sustaining Margin $m ~65 55 24 ~190 122 +55 %
Free Cash Flow
(before growth projects, WC, tax and financing cost) $m ~50 41 12 ~135 85 +59 %
Net Debt At Period End $m 25 14 144 25 144 (83 %)
The preliminary Q4 2016 production and other financial information provided in this news release are approximate figures and may differ from the final results included in the 2016 annual audited statements and MD&A. Production shown inclusive of Karma's pre-commercial period. Karma's revenue, costs, and operating cash flow is netted against its capital costs for its pre-commercial production period ending September 30, 2016.
Sébastien de Montessus, President & CEO, stated: "I would like to acknowledge the hard work and dedication of our entire team for achieving our record performance in 2016 and improving all our key operating metrics as we met all of our guidance objectives for the year. As expected, our fourth quarter was our strongest with a record performance at Agbaou and Tabakoto, and the continued ramp-up at Karma.
In 2017, we are well positioned to continue to increase production and lower all-in sustaining costs even further, notably without the inclusion of organic growth benefits provided by our Houndé project which is progressing on-time and on-budget. Looking ahead, we remain focused on unlocking our organic growth potential which will be enhanced by a potential positive investment decision at the Ity CIL project and through our reinvigorated exploration program."
> 2016 Guidance Achieved with Record High Production & Record Low AISC
Endeavour produced a total of 583,712 ounces of gold in 2016 at a low AISC of circa $895/oz, achieving both its ambitious production guidance of 575,000 to 610,000 ounces and its AISC guidance of $870-920/oz.
Production increased by 13% over 2015, with Agbaou setting another record year and strong contributions from Tabakoto, Ity and Karma which either met or exceeded their respective guidance while Nzema was impacted by lower than expected purchased ore.
AISC continued to decrease in 2016 with strong performance at Agbaou and an improved asset portfolio with a full year's contribution from Ity, the purchase and ramp-up of Karma and the divestment of the higher-cost Youga mine.
Table 2: Preliminary Production and AISC Compared to Guidance
(in koz on a 100% basis) Production, koz Preliminary AISC/oz
2016
Guidance 2016
Actual 2015 Actual 2016
Guidance 2016
(Preliminary) 2015
Actual
Agbaou 180 - 195 196 181 550 - 600 ~535 576
Tabakoto 155 - 175 163 152 970 - 1,050 ~1,030 1,067
Nzema 90 - 100 88 110 1,050 - 1,125 ~1,170 1,064
Ity 70 - 80 76 6 800 - 850 ~790 683
Karma* 50 - 60 62 - 750 - 800 ~750 -
Youga (divested in March 2016) Excluded - 68 Excluded - 913
Group 575 - 610 584 517 870 - 920 ~895 922
*Karma production shown inclusive of the pre-commercial period, while AISC stated for the commercial period
> Strong 2016 Finish with Record Quarterly Performance in Q4
As expected, Q4 was Endeavour's strongest quarter with production up 20% over the previous quarter to a record 175koz, and AISC down 3% to record low of circa $865/oz.
Fourth quarter performance was lifted by strong increases at Agbaou, Ity and Tabakoto which benefited from the end of the rainy season, and continued ramp-up at Karma.
Table 3: Preliminary Production and AISC
(All amounts in koz, on a 100% basis) Quarter ended, Year ended December 31,
Q4-2016 Q3-2016 Q4-2015 2016 2015 Change
Agbaou 57 49 52 196 181 +8 %
Tabakoto 48 37 42 163 151 +8 %
Nzema 24 24 23 88 110 (20 %)
Ity 17 15 6 76 6 n/a
Karma (including pre-commercial production) 29 20 - 62 - n/a
Production from continuing operations 175 146 123 584 449 +30 %
Youga (divested in March 2016) Excluded Excluded 15 Excluded 68 n/a
Total Production 175 146 138 584 517 +13 %
Table 4: Group All-In Sustaining Costs, US$/oz
(All amounts in US$/oz) Quarter ended, Year ended December 31,
Q4-2016 Q3-2016 Q4-2015 2016 2015 Change
Agbaou ~535 550 537 ~535 576 (7 %)
Tabakoto ~930 1,071 1,119 ~1,030 1,067 (3 %)
Nzema ~1,120 1,136 1,133 ~1,170 1,064 +10 %
Ity ~850 724 683 ~790 683 +16 %
Karma (commercial production) ~750 n/a - ~750 - n/a
Youga (divested in March 2016) Excluded Excluded 985 Excluded 913 n/a
Mine-level AISC ~785 831 862 ~830 868 (4 %)
Corporate G&A ~55 47 56 ~47 41 +15 %
Sustaining exploration ~25 20 15 ~18 13 +38 %
Group AISC ~865 898 934 ~895 922 (3 %)
Agbaou Mine
Q4-2016 Insights:
Agbaou achieved record performance in Q4, up 16% over the previous quarter, as the mine benefitted from the end of the rainy season and a greater mix of higher grade transitional ore, which represented 15% of total ore processed during the quarter.
2017 Outlook
The secondary crusher, which was commissioned in mid-2016, provides the flexibility to process higher grade transitional ore while maintaining a fairly constant ore blend and throughput over the remaining life of mine.
After achieving an exceptional year, Agbaou is expected to return to a more normalized and sustainable production rate of 175-180koz in 2017 with fresh ore representing up to 50% of tonnes processed.
AISC are expected to remain competitive, at $660-700/oz, as higher grade transitional ore is expected to compensate for increased unit costs and lower throughput.
Nearly $20 million of sustaining expenditures are planned for 2017, mainly occurring in the first and last quarter, including $13 million for waste capitalization. No significant non-sustaining expenditures are planned.
Exploration Activities
The ongoing exploration campaign, which commenced in April 2016 based on previous geophysics and soil geochemistry results, is focused on the North pit and South pit extensions, the Agbaou South target, Niafouta target, and on generating targets beyond the current resource boundaries.
Initial drill results suggest the extension of mineralized zones.
An exploration budget of $7 million has been planned for 2017, totaling approximately 45,000 meters of drilling.
Tabakoto Mine
Q4-2016 Insights:
Tabakoto achieved a record quarter with production increasing 30% over the previous quarter due to the anticipated higher grades from Kofi C and Segala and increased mill throughput following the end of the rainy season.
2017 Outlook
Cost reduction will continue to be the main focus in 2017, with AISC expected to decrease to $950-990/oz. Ongoing cost saving and optimization programs include overhead reduction centralizing procurement, fleet replacement, and improving equipment availability and mining efficiency.
Tabakoto production is expected to slightly decrease in 2017 to 150-160koz as grades are expected to slightly decrease due to open pit mining transitioning from Kofi C to Kofi B in the second half of the year, and underground mining sequence.
Nearly $20 million of sustaining expenditures are planned for 2017, inclusive of $7 million for equipment replacement (expected to be incurred in the first half of the year) and the remainder for underground development and Kofi B waste capitalization. No significant non-sustaining expenditures are planned.
Exploration Activities
As set out in Endeavour's 5-year exploration strategy published in November 2016, Tabakoto is a top exploration priority in 2017 given its relatively short mine life and significant potential. As such, a $9 million exploration program totaling approximately 72,000 meters of drilling has been planned for 2017.
The 2017 program will focus on both surface exploration, with the aim of delineating resources within trucking distance at discoveries made in 2016 and on new targets, and underground drilling.
Ity Mine
Q4-2016 Insights:
As expected, production increased in Q4 following the end of the rainy season which allowed for increased throughput. Pre-strip at the Zia pit was completed during the quarter which positively contributed to Ity's Q4 production increase.
2017 Outlook
Production is expected to remain stable in 2017, at 75-80koz while AISC are expected to slightly decrease to $740-780/oz due to higher grades.
Nearly $10 million of sustaining expenditures are planned for 2017, for waste capitalization and fleet renewal, while roughly $4 million of non-sustaining expenditures are planned mainly for infrastructure related to the Bakatouo pit access.
The CIL Project Mineral Reserves, published in November 2016, are expected to be updated in Q2-2017 to include the recent high-grade Bakatouo and Colline Sud discoveries.
The possibility of running the CIL and Heap leaching operations in parallel for the first few years is also currently under analysis. A budget of $10 million has been allocated for studies and metallurgical test work.
Exploration Activities
The largest portion of Endeavour's exploration budget has been allocated to the Ity area in light of its strong prospectivity and potential to further extend the lives of the CIL project and Heap Leach operations. A $10 million exploration program totaling approximately 50,000 meters has been planned for 2017.
In 2017, exploration will be primarily focused on infill drilling at the Daapleu and Mount Ity deposits, and infill drilling and extension drilling at the new Bakatouo and Colline Sud discoveries, as well as on conducting initial drilling campaigns on strong Auger anomalies such as the Yacetouo and Vavoua targets.
An auger drilling program will also be conducted on the 80km underexplored portion of the Birimian corridor along the Ity trend which was consolidated in September 2016.
Nzema Mine
Q4-2016 Insights:
Production slightly decreased over the previous quarter as the higher grades mined was offset by lower purchased ore grades. The Adamus pit push-back progressed well in 2016 and is expected to be completed in Q1-2017.
2017 Outlook
In light of push-back activity, 2016 was a transitional year for Nzema as ore feed was restrained to low grade ore mined and stockpiles, while purchased ore feed was ramping up in the first half of the year. Following the cutback, Nzema is expected to generate healthy cash flows for the coming years.
As a result of the higher expected grades from the Adamus pit following the cut-back, production is expected to increase to 100-110koz in 2017 while AISC are expected to decrease to $895-940/oz.
To complement production from the Adamus pit, pre-stripping at the Bokrobo deposit is expected to start in the second half of the year.
Roughly $5 million of sustaining expenditures are planned for 2017, mainly being incurred in the first half of a TSF lift. In addition, approximately $12 million of non-sustaining expenditures are planned for the Adamus cut-back completion, and Bokrobo pre-strip and resettlement.
Exploration Activities
No significant exploration activities are planned for 2017.
Karma Mine
Q4-2016 Insights:
Commercial production was declared on October 1, 2016. Pre-commercial production revenue and costs have been offset against the mineral interest on the balance sheet.
Production continued to ramp up in Q4 to achieve an annualized run-rate of approximately 115koz as the higher grade Rambo pit complemented ore feed from the GG2 pit and stacking capacity continued to improve.
The low AISC of circa $750/oz achieved in Q4, confirms Karma's potential to have low AISC, in line with Endeavour's acquisition case.
2017 Outlook
Production in 2017 is expected to increase to 100-110koz as higher grade Rambo ore feed will complement that of the GG2 pit with contribution from the Kao pit in the later portion of the year. In addition, stacking capacity is expected to increase in the second half of the year following the completion of the plant optimization efforts.
AISC are expected to range between $750-800/oz with higher grades and volumes offsetting higher mining cost related to the increased drilling and blasting requirements.
Nearly $10 million of sustaining expenditures are planned for 2017, with a large portion occurring in the latter portion of the year for pre-stripping related to the Kao pit which is expected to be in operation by year-end.
Nearly $19 million of non-sustaining capital is planned for 2017, inclusive of $6 million to increase the mining fleet and $3 million for pre-stripping at the Kao pit which will be conducted in the latter portion of the year.
Capacity at the processing facility is expected to further increase in the second half of the year following the replacement of the front-end and other plant optimization activities, which are expected to amount to $35 million.
Exploration Activities
In 2016, the exploration program focused on Kao North, with the goal of extending mine life by +2.5 years. The results are currently being compiled and are expected to be published in the coming weeks.
In 2017, a $4 million exploration program totaling approximately 30,000 meters has been planned to drill near-mill targets such as Rambo West and Yabonsgo.
> Houndé Project
Construction remains on-time and on-budget
Construction of the Houndé project is progressing as planned, with over 50% completed by year-end, in line with project planning, with first gold pour expected by Q4-2017.
The project remains on-budget with over 65% of the $328 million upfront capital (including $28 million for contingences) committed.
In 2016, a total of approximately $100 million was spent and a $47 million mining fleet equipment financing agreement with Komatsu was signed. The remaining spend, to be incurred in 2017, is expected to be up to $180 million, as shown below.
Table 5: Remaining capital spend, in $m
Upfront project capital 328
Capital spent in 2016 (100 )
Mining fleet equipment financing (47 )
Remaining capital spend ~180
Achievements To-Date
Over 2 million man-hours have been worked without Lost Time Injury (LTI).
The 38km long, 91kv overhead power line construction is 52% complete. First power from Sonobel is scheduled for August 2017.
Open pit pre-strip mining at the Main Vindaloo open pit, adjacent the processing facility, commenced in late 2016.
Detailed engineering of the processing facility along with the design HAZOP has been completed, also ahead of schedule in November 2016.
CIL ring beam concrete pour was achieved in early August 2016, and the SAG and Ball Mill first lift on both plinths was completed by year-end.
The construction of the water harvest dam decant tower is complete, with water already being pumped to the water storage dam two months ahead of schedule.
Construction of the 300-person permanent accommodation village is approaching completion.
Over 2,000 personnel including contractors are currently employed on-site, more than 94% of which are Burkinabe.
Full back-up 26Mw backup power station has been awarded to JA Delmas. This is on schedule to be operational in Q3-2017.
The land compensation process has been successfully completed with resettlement commencing in early 2017.
Exploration Activities
Following a two year period of no drilling exploration, activities will resume in 2017 with a $5 million program totaling approximately 45,000 meters.
2017 exploration efforts will leverage off of the 2016 data analysis, and structural geology and ground geophysical analytical work. The focus will be on delineating high-grade targets such as Bouere and Kari Pump, in addition to preforming reconnaissance drilling.
> 2017 Outlook: Further Production Growth and AISC Reduction
Production is expected to increase to 600,000 - 640,000 ounces (excluding Houndé) in 2017 as improvements at Karma and Nzema are expected to more than compensate for Agbaou returning to a normalized production level after a record-breaking year. As was the case in 2016, production is expected to fluctuate throughout the year due to mine plan sequences, with a peak towards the middle of the year.
Table 6: Production Guidance, koz
(on a 100% basis) 2016 Actual 2017 Guidance
Agbaou 195,505 175,000 - 180,000
Tabakoto 162,817 150,000 - 160,000
Nzema 87,710 100,000 - 110,000
Ity 75,867 75,000 - 80,000
Karma 61,817 100,000 - 110,000
Group-wide Production 583,712 600,000 - 640,000
Group AISC is expected to continue to decrease to $860-905/oz due to the full year benefit of Karma, optimizations at Nzema and Tabakoto, and cost reduction programs. As with production, AISC are expected to fluctuate throughout the year with lower costs expected in the second half.
Table 7: AISC Guidance, US$/oz
(In US$/oz) 2016 Actual 2017 Guidance
Agbaou ~535 660 - 700
Tabakoto ~1,030 950 - 990
Nzema ~1,170 895 - 940
Ity ~790 740 - 780
Karma ~750 750 - 800
Mine-level AISC ~870 800 - 850
Corporate G&A ~46 37 - 34
Sustaining exploration ~18 23 - 22
Group AISC ~895 860 - 905
Exploration will continue to be an increased focus in 2017 with a company-wide exploration program of roughly $40 million (up approximately 20% over 2016 and more than double that of 2015), totaling 285,000 meters of drilling. Mine related exploration is expected to total $35 million and in addition approximately $5 million has been allocated for grassroots exploration programs.
Table 8: Exploration Guidance, $m
(In $m) 2017 Guidance
Agbaou 7
Tabakoto 9
Ity 10
Karma 4
Houndé 5
Exploration Expenditures for Mines 35
Grassroots exploration expense 5
Total Exploration Expenditures 40
As detailed in the above mine sections, sustaining and non-sustaining capital allocations for 2017 amount to $65 million and $35 million respectively, in total up approximately $25 million over 2016 due to the addition of Karma. Growth projects amount to $225 million for the Houndé construction, Karma optimization and Ity CIL project.
Table 9: Capital Expenditure Guidance, $m
(in US$m) Sustaining
Capital Non-Sustaining
Capital Growth
Projects
Agbaou 20 - -
Tabakoto 20 - -
Nzema 5 12 -
Ity 10 4 10
Karma 10 19 35
Houndé - - 180
Total 65 35 225
Due to the expected increased production and lower AISC, the Free Cash Flow before growth projects (and before working capital movement, tax and financing costs) is projected to increase by approximately $15 million to circa $150 million, based on the 2016 realized gold price of circa $1,240/oz, and using the mid-point of 2017 production and AISC/oz guidance ranges
Based on a more conservative gold price of $1,200/oz, the Free Cash Flow before growth projects (and before working capital movement, tax and financing costs) is projected to be $125 million, with the gold price sensitivity as shown in Table 10 below.
Table 10: 2017 Free Cash Flow Guidance based on Production and AISC Guidance Mid-points, in US$m
(in US$m) $1,100/oz $1,200/oz $1,300/oz
Net Revenue (based on production guidance mid-point) 685 725 785
Mine level AISC costs (based on AISC guidance mid-point) (510 ) (510 ) (510 )
Corporate G&A (21 ) (21 ) (21 )
Sustaining exploration (14 ) (14 ) (14 )
Group AIS Margin 140 180 240
Non-sustaining mine exploration (20 ) (20 ) (20 )
Non-sustaining capital (35 ) (35 ) (35 )
Free Cash Flow before growth projects
(Mine cash flow less corporate costs before WC, tax and financing cost) 85 125 185
The short-term Gold Revenue Protection Strategy put in place when the Houndé construction was launched in April 2016 will end in June 2017. The remaining gold collar program covers a total of approximately 187,000 ounces, representing approximately 60% of Endeavour's total estimated gold production for the period, with a floor price of $1,200/oz and ceiling price of $1,400/oz.
As shown in Table 10, within our collar gold price boundaries of $1,200/oz to $1,400/oz, the Free Cash Flow variation to each $100/oz fluctuation is roughly $60 million. Thanks to the Gold Revenue Protection program, if the gold price were to drop below $1,200/oz in 2017, this fluctuation is reduced to roughly $40 million per $100/oz change.
> Sound Balance Sheet and Strong Financing & Liquidity Sources
Endeavour significantly improved its balance sheet in 2016, with net debt reduced to $25 million as of December 31, 2016 compared to $144 million at the same date last year, despite roughly $100 million spent on the Houndé project construction. This was due to:
$180 million of net equity proceeds received since the beginning of the year, which include the La Mancha anti-dilution proceeds related to the True Gold acquisition and the bought deal proceeds.
$120 million voluntary repayment made under the $350 million revolving corporate facility, resulting in a net drawn amount of $140 million. In addition, the $5 million Auramet loan, previously drawn by True Gold, was also repaid in Q3-2016.
Endeavour has strong financing and liquidity sources of $335 million which include its $125 million cash position and $210 million undrawn on the revolving credit facility, in addition to its strong cash flow generation.
Table 11: Net Debt Reduction, in US$m
(in US$ million) December 31,
2016 December 31,
2015 December 31,
2014
Cash 125 110 62
Less: Equipment finance lease 10 13 16
Less: Drawn portion of $350 million RCF 140 240 300
Net Debt/(Cash) position 25 144 254
> Conference call and live webcast
The 2016 Fourth Quarter and Year End Financials will be released before-market open on March 7, 2017. Management will host a conference call and live webcast on Tuesday, March 7, 2016, at 10:00 am Toronto time (EST), 3:00pm London time (GMT), 4:00pm Paris time (CET), to discuss the Company's financial results.
The live webcast can be accessed through the following link:
http://edge.media-server.com/m/p/ei9msxtz
Analysts and interested investors are also invited to participate and ask questions using the dial-in numbers below:
International:
North American toll-free:
UK toll-free:
Australian toll-free:
Confirmation code: +1646 254 3361
1877 280 2342
0800 279 4992
1800 027 830
8720003
Click here to add Webcast reminder to Outlook Calendar
Webcast Access for mobile devices - QR code:
Access the live and On-Demand version of the webcast from mobile devices running iOS and Android.
A replay of the conference call and webcast will be available on Endeavour's website.
Contact Information Qualified Persons
Martino De Ciccio
VP - Strategy & Investor Relations
+33 (0)1 70 38 36 95
mdeciccio@endeavourmining.com
DFH Public Affairs in Toronto
John Vincic, Senior Advisor
(416) 206-0118 x.224
jvincic@dfhpublicaffairs.com
Brunswick Group LLP in London
Carole Cable, Partner
+44 7974 982 458
ccable@brunswickgroup.com Adriaan "Attie" Roux, Pr.Sci.Nat, Endeavour's Chief Operating Officer, is a Qualified Person under NI 43-101, and has reviewed and approved the technical information related to mining operations in this news release.
About Endeavour Mining Corporation
Endeavour Mining is a TSX-listed intermediate gold producer, focused on developing a portfolio of high quality mines in the prolific West-African region, where it has established a solid operational and construction track record.
Endeavour is ideally positioned as the major pure West-African multi-operation gold mining company, operating 5 mines in Côte d'Ivoire (Agbaou and Ity), Burkina Faso (Karma), Mali (Tabakoto), and Ghana (Nzema). In 2016, it expects to produce between 600koz and 640koz at an AISC of US$860 to US$905/oz. Endeavour is currently building its Houndé project in Burkina Faso, which is expected to commence production in Q4-2017 and to become its flagship low-cost mine with an average annual production of 190koz at an AISC of US$709/oz over an initial 10-year mine life based on reserves. The development of the Houndé project is expected to lift Endeavour's group production +900kozpa and decrease its average AISC to circa $800/oz by 2018, while exploration aims to extend all mine lives to +10 years.
Endeavour Mining | Executive Office | Bureau 76, 7 Boulevard des Moulins, Monaco 98000
This news release contains "forward-looking statements" including but not limited to, statements with respect to Endeavour's plans and operating performance, the estimation of mineral reserves and resources, the timing and amount of estimated future production, costs of future production, future capital expenditures, and the success of exploration activities. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "expects", "expected", "budgeted", "forecasts" and "anticipates". Forward-looking statements, while based on management's best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the successful integration of acquisitions; risks related to international operations; risks related to general economic conditions and credit availability, actual results of current exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Endeavour operates. Although Endeavour has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Please refer to Endeavour's most recent Annual Information Form filed under its profile at www.sedar.com for further information respecting the risks affecting Endeavour and its business. AISC, all-in sustaining costs at the mine level, cash costs, operating EBITDA, all-in sustaining margin, free cash flow, net free cash flow, free cash flow per share, net debt, and adjusted earnings are non-GAAP financial performance measures with no standard meaning under IFRS, further discussed in the section Non-GAAP Measures in the most recently filed Management Discussion and Analysis for the year ended December 31, 2015.
Appendix 1: Preliminary Production and Cost Details by Mine
On a quarterly basis
Agbaou Nzema Tabakoto Ity Karma
(on a 100% basis) Unit Q4-2016 Q3-2016 Q4-2015 Q4-2016 Q3-2016 Q4-2015 Q4-2016 Q3-2016 Q4-2015 Q4-2016 Q3-2016 Q4-2015 Q4-2016
Total tonnes mined - OP* 000t 6,518 6,877 4,924 2,885 2,848 1,341 1,593 1,569 2,423 1,472 948 375 4,022
Total ore tonnes - OP 000t 674 651 753 288 222 278 195 160 137 316 200 63 782
Open pit strip ratio* W:t ore 8.7 9.6 5.5 9.0 11.8 3.8 7.2 8.8 16.6 3.7 3.7 4.9 4.1
Total tonnes mined - UG 000t - - - - - - 324 302 358 - - - -
Total ore tonnes - UG 000t - - - - - - 253 238 215 - - - -
Total tonnes milled 000t 721 709 748 428 424 446 402 381 392 295 271 102 1,163
Average gold grade milled g/t 2.5 2.2 2.1 2.2 2.4 1.8 3.9 3.1 3.5 2.0 1.9 2.4 1.1
Recovery rate % 97 % 96 % 97 % 82 % 82 % 87 % 95 % 95 % 95 % 90 % 91 % 81 % 90 %
Gold ounces produced oz 57,061 49,384 51,372 23,874 24,279 23,076 47,884 37,019 41,546 17,480 15,334 5,689 28,848
Gold sold oz 56,936 51,308 53,298 22,033 23,526 22,526 47,053 37,324 41,118 15,038 15,349 7,917 28,743
Preliminary mine-level AISC per ounce sold $/oz ~535 550 537 ~1,120 1,136 1,133 ~930 1,071 1,119 ~850 724 683 ~750
For the year ended December 31
Agbaou Nzema Tabakoto Ity Karma
(on a 100% basis) Unit FY-2016 FY-2015 FY-2016 FY-2015 FY-2016 FY-2015 FY-2016 FY-2015 FY-2016
Total tonnes mined - OP* 000t 25,382 20,447 9,295 8,144 7,098 9,333 6,102 375 8,753
Total ore tonnes - OP 000t 2,797 2,818 1,000 1,310 649 520 1,186 63 1,879
Open pit strip ratio* W:t ore 8.1 6.3 8.3 5.2 10.4 17.2 4.2 4.9 3.7
Total tonnes mined - UG 000t - - - - 1,301 1,360 - - -
Total ore tonnes - UG 000t - - - - 944 860 - - -
Total tonnes milled 000t 2,827 2,665 1,761 1,783 1,588 1,588 1,173 102 2,089
Average gold grade milled g/t 2.3 2.2 1.9 2.2 3.4 3.2 2.2 2.4 1.2
Recovery rate % 97 % 97 % 83 % 87 % 95 % 93 % 93 % 81 % 90 %
Gold ounces produced oz 195,505 181,365 87,710 110,302 162,817 151,067 75,867 5,689 61,813
Gold sold oz 196,316 182,219 85,495 110,404 161,803 151,345 73,332 7,917 62,884
Preliminary mine-level AISC
per ounce sold $/oz ~535 576 ~1,170 1,064 ~1,030 1,067 ~790 683 ~750
*Includes waste capitalized
Attachments:
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buddhabelly2
12 years ago
Avion Gold Corporation (TSX:AVR)(OTCQX:AVGCF) ("Avion" or the "Company") today announces its financial results for the second quarter ended June 30, 2012. All amounts are in United States dollars unless otherwise indicated.
Avion plans to host a conference call on August 15th at 10:30 AM (ET). To participate in the call please dial:
International: +1 416 695 7848
Toll Free North America: 800 769 8320
Local: 416 695 7848
To register and listen to the webcast of the call, please go to Avion's website at www.aviongoldcorp.com. A webcast play back recording will remain on the Company's website after the completion of the call.
Complete financial statements and related Management's Discussion and Analysis will be available under the Company's profile on www.sedar.com before the market opens August 15, 2012.
Second Quarter Highlights:
-- The Company had earnings of $15.7 million, or $0.04 per share for the
quarter as compared to $15.2 million in earnings, or $0.04 per share for
the comparable quarter last year
-- The Company achieved revenues of $49.4 million this quarter compared to
revenues of $37.9 million for the comparable quarter last year
representing a 30% increase
-- Avion produced 28,637 ounce of gold during the quarter after final
refinery adjustments at a cash cost of per ounce produced of $910.
Please see "Non-GAAP Measures" below. The Company has now set two
consecutive quarterly records for the amount of gold produced in one
quarter, with year to date production of 54,894 ounces after refinery
adjustments. Mining and processing costs were $28.4 million compared to
$12.8 million for the comparable quarter last year.
-- Avion processed 191,500 tonnes of ore at an average grade of 5.05 g/t
Au. Approximately 37% of the ore processed was mined from the
Dioulafoundou and Djambaye open pits, and 63% of the ore was mined from
Tabakoto underground. Average mill recovery for the quarter was 92.5%
-- During the quarter the Company sold 30,669 ounces of gold at an average
realized price of $1,606 per ounce.
-- The Company generated operating cash flow before working capital
adjustments of $18.8 million compared to $21.3 million for the same
quarter last year.
-- The Company completed the quarter having $15.3 million in cash and cash
equivalents
Capital Expansion Programs
Expansion plans continued at Tabakoto, consisting of the following activities:
-- Construction work to double the Tabakoto plant capacity from 2,000 to
4,000 tonnes per day was progressing well until a military coup occurred
on March 21, 2012. The plant expansion was on budget and on schedule,
and approximately 80% complete on a cost spend basis. The mill expansion
which was delayed when contractors left the site during the coup is
anticipated to resume in the latter part of 2012 or early 2013. The
Company is negotiating with contractors to return to site as soon as
possible, however it will take some time to remobilize teams to site.
All parts and supplies to complete the mill expansion have arrived at
site.
-- Reinforcement work of the underground portal at the Segala deposit
continued during the second quarter of 2012
Financial Discussion: three months ended June 30, 2011
The Company reported net income of $15,681,810 ($0.04 per share, basic and diluted) for the three months ended June 30, 2012 compared to $15,206,796 ($0.04 per share, basic and diluted) for the three months ended June 30, 2011.
During Q2-2012, the Company sold 30,669 ounces of gold and generated $49,248,115 in gold sales revenue. In Q2-2011, 24,996 ounces of gold was sold generating $37,772,410 in gold sales revenue. Mining and processing costs were $28,370,860 (Q2-2011: $12,822,914), and the Company recorded depletion and depreciation of $7,302,777 (Q2-2011: $4,131,748). The Company is amortizing deferred property, plant and equipment related to the Mali projects on a unit of production basis from the current mine plan. The Company was subject to a 6% royalty on metal sales during Q2-2012. Royalties expense totaled $2,956,631 for the ounces of gold sold during Q2-2012 (Q2-2011: $2,458,430).
The Company realized a cash cost per ounce produced of $910 per ounce for Q2-2012 compared to $544 for Q2-2011. The increase is attributable to the shift from open pit mining to underground mining. Please see "Non-IFRS Measures" below.
Corporate and administrative expenses totaled $1,870,129 for the quarter ended June 30, 2012 compared to $1,150,011 for Q2-2011. The Company incurred higher professional costs during the quarter as a result of higher audit costs, higher insurance costs and costs related to the proxy solicitation and corporate governance services prior to the Company's annual general meeting. Consulting and management costs were also higher in Q2-2012 compared to Q2-2011 with the addition of a VP of Operations during the current quarter.
Other gains and losses included a foreign exchange gain of $4,721,897 during Q2-2012 compared to a loss of $753,480 during Q2-2011. The Company carried liabilities denominated in FCFA during Q2-2012 as a result of the loan with Banque Atlantique. The FCFA weakened compared to the US dollar during the quarter, resulting in a foreign exchange gain. As well, the Company incurred an unrealized loss on the value of investments held by the Company of $212,165 during Q2-2012 compared to $878,918 during Q2-2011.
The Company recorded an unrealized gain on the change in fair value of derivative liabilities of $2,617,176 during Q2-2012 (Q2-2011: $nil). This was in relation to the gold call options sold during Q1-2012.
Don Dudek, P.Geo. Avion's Senior VP Exploration, and Andrew Bradfield, P.Eng., Avion's Chief Operating Officer, are the Qualified Persons for this MD&A as defined under National Instrument 43-101 and are responsible for the technical and scientific work carried out and have reviewed and approved the scientific and technical information presented in this press release.
About Avion Gold Corporation
Avion is a Canadian-based gold mining company focused in West Africa that holds 80% of the Tabakoto and Segala gold projects in Mali. Avion has developed an underground mine at the Tabakoto deposit, and is developing another underground mine at the Segala deposit. The Tabakoto project property also contains several producing open pit mines. Production sustainability will continue to be supported by exploration programs over an approximately 600 km2 exploration package that both surrounds and is near to the Avion's existing mine infrastructure, and contains mineral resources on the Kofi property. Additionally, mineral resources have grown considerably at Avion's 1,600 km2 Hounde exploration property in Burkina Faso.
Cautionary Notes
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the impact of the financial results on the Company, development potential and timetable of the Mali projects; the future price of gold; the estimation of mineral resources; conclusions of economic evaluation (including scoping studies); the realization of mineral resource estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; foreign operations risks; other risks inherent in the mining industry and other risks described in the annual information form of the Company, which is available under the profile of the Company on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Cautionary Non-GAAP Statements
Avion believes that investors use certain indicators to assess gold mining companies. The indicators are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP. "Cash flow from operating activities before changes in non-cash working capital" is a non-GAAP performance measure which could provide an indication of the Company's ability to generate cash flows from operations, and is calculated by adding back the change in non-cash working capital to "Cash provided by (used for) operating activities" as presented on the Company's consolidated statements of cash flows. "Cash flow per share" is calculated by dividing "Cash provided by (used for) operating activities" and adding back the change in non-cash working capital by the fully diluted number of shares outstanding for the period. "Cash cost per ounce produced" is a non-GAAP performance measure which could provide an indication of the mining and processing efficiency and effectiveness at the mine. It is determined by dividing the relevant mining and processing costs excluding royalties by the ounces produced in the period. There may be some variation in the method of computation of "cash cost per ounce produced" as determined by the Company compared with other mining companies. In this context, "ounces produced" includes in-process and dore inventory along with ounces of gold sold in the period. "Cash costs per ounce produced" may vary from one period to another due to operating efficiencies, waste to ore ratios, grade of ore processed and gold recovery rates in the period.
The following table provides a reconciliation of mining and processing costs per the financial statements and cash operating for the purposes of calculating cash costs per ounce produced and total cash costs produced.
Three months Three months
ended ended
June 30, 2012 June 30, 2011
--------------------------------
Mining and processing expenses 28,370,860 12,822,914
By-product silver sales credit (149,585) (117,420)
Inventory movements and adjustments (2,153,192) 1,342,755
Cash operating costs 26,068,083 14,048,249
Divided by ounces of gold produced 28,638 25,825
Cash cost per ounce produced 910 544
Royalties 2,956,631 2,458,430
Total cash cost per ounce produced 1,014 639
Operating cashflow 12,534,858 11,544,710
Operating cashflow per ounce produced 438 447
Contacts:
Avion Gold Corporation
Michael McAllister
Manager, Investor Relations
(416) 309-2134
info@aviongoldcorp.com
www.aviongoldcorp.com
buddhabelly2
12 years ago
Summary of the transaction:
•Acquisition of Avion in an all share transaction with each Avion common share exchanged for 0.365 of an Endeavour common share valuing Avion at CDN$0.88 per share or CDN$389 million, using closing prices on the TSX as of August 7, 2012
•The acquisition will immediately increase Endeavour's forecast gold production by approximately 50% to 282,000 - 304,000 ounces for 2012
•Endeavour is providing a US$20 million short term exchangeable loan to Avion ("Bridge Loan") to restart the Tabakoto mill capacity upgrade, leading to further gold production growth to over 450,000 ounces per year when Agbaou reaches steady state production.
•Endeavour's NI 43-101 compliant, attributable Proven and Probable gold reserves will increase by 31% to 2.8 million ounces and Measured and Indicated gold resources increase by 52% to 6.0 million ounces, and Inferred gold resources increase by 167% to 3.3 million ounces (see Tables 1 and 2 for details).
•The acquisition of Avion will create one of the largest West African mining companies with three producing mines, a fourth mine currently in construction, and an attractive pipeline of exploration and resource development properties (see Figure 1 for locations).
Terms of the Arrangement Agreement
Under the Arrangement Agreement, each Avion shareholder will receive in exchange for each Avion common share held 0.365 of an Endeavour common share ("Endeavour Share") via a court-approved plan of arrangement. Certain eligible Avion shareholders may elect to receive their consideration in the form of Exchangeable Shares of Endeavour in lieu of Endeavour Shares. Exchangeable Shares may provide eligible Avion shareholders the opportunity to obtain a deferral of taxable capital gains for Canadian income tax purposes. Also under the Arrangement Agreement, Avion stock options will be varied to become exercisable for Endeavour Shares on the same 0.365 exchange ratio.
Based on the closing price of the Endeavour Shares on the Toronto Stock Exchange of CDN$2.40 on August 7, 2012 the implied transaction value of CDN$0.88 per Avion share yields a premium of 56%. The transaction value on a basic share outstanding basis is approximately CDN$389 million and the Avion shareholders will represent approximately 39.8% of the enlarged shareholder base.
Using the 20-day volume weighted average prices ("VWAP") on the TSX for the period ending August 7, 2012 for both Endeavour and Avion, the exchange ratio yields a premium of 70% to Avion. Applying the 85-day VWAPs on the TSX for the period ending August 7, 2012 for both Endeavour and Avion, the exchange ratio yields a premium of 29% to Avion.
The Arrangement Agreement will be subject to, among other things, approval of 66 2/3% of the Avion shareholder votes cast, approval of 50% of the Endeavour shareholder votes cast, and other customary conditions including court approvals. The two shareholder meetings are expected to occur on or about October 12, 2012 and the transaction is expected to close in October 2012. The record date for the special meeting of the Endeavour shareholders will be announced in the near future.
Neil Woodyer, CEO of Endeavour, commented:
"The acquisition of Avion complements our strategy of becoming a leading and diversified West African gold producer. Avion's Tabakoto Mine and Kofi property in western Mali and the advanced Houndé property in Burkina Faso fit very well into Endeavour's production and development portfolios. At closing, Endeavour's gold production immediately rises to approximately 300,000 ounces per year and including the Tabakoto mill expansion and completion of Agbaou construction, our gold production is forecast to reach approximately 450,000 ounces per year. Endeavour has a well-established track record of using its financial and operating strengths to create value and produce results."
HIGHLIGHTS OF THE ACQUISITION
•A pro forma market capitalization of $977 million using Endeavour's closing price on the TSX as of August 7, 2012
•Endeavour has a pro forma 2012 gold production range of 282,000 to 304,000 ounces, with substantial operating cash flows
•Avion's 80% owned Tabakoto mine produced 91,200 ounces at cash costs of $652 per ounce in 2011, with 2012 production guidance on track to deliver between 95,000 and 102,000 ounces
•Endeavour's financial strength to address immediate cash needs at Avion, and get the Tabakoto mill expansion, from 2,000 tpd to 4,000 tpd, back on track
•Increased operating and geographical diversification, with three operating mines (Ghana, Burkina Faso, western Mali) and a fourth mine in construction (Côte d'Ivoire)
•Addition of Avion's Houndé exploration concession in Burkina Faso includes the highly prospective Vindaloo Deposit, which is progressing towards a Preliminary Economic Assessment by year end. Current resources on the Houndé concession are 893,000 indicated ounces and 712,000 inferred ounces (see Table 2 for mineral resource details)
•Addition of Avion's Kofi exploration concession in western Mali, that is approximately 30km to 60km North of the Tabakoto processing plant, which currently hosts 500,000 indicated ounces and 702,000 inferred ounces (see Table 2 for mineral resource details)
•Addition of 1,800 km2 of exploration ground for a total of 11,800 km2
•Through an all-stock transaction, Avion shareholders can continue to participate in future growth
•Valuation upside as Endeavour continues to progress toward becoming a mid-tier gold producer
Figure 1 - Mine & Project Location Map
For more details about the transaction, please refer to the investor presentation on Endeavour's website at www.endeavourmining.com.
Board and Management Changes
In line with the growth of the business, Endeavour is strengthening its board and management teams. The Board of Directors will be increased from seven to eight directors, with both John Begeman and another member of the current Avion board joining, and one member of the current Endeavour board will resign. John Begeman is currently President and CEO of Avion and a mining engineer with over 30 years of mining experience.
Mark Connelly, currently the Chief Operating Officer ("COO") of Endeavour, has elected to step down from his role as COO effective August 31, 2012 in order to pursue other interests. Mark will remain on the Endeavour board. Mark is replaced as COO by Adriaan ("Attie") Roux, formerly Senior VP Operations. Attie Roux joined Endeavour following the completion of the merger with Adamus in December 2011, having been responsible for commissioning the Nzema processing plant in Ghana. As Senior VP Operations at Endeavour, he managed Endeavour's two operating mines - Youga and Nzema. Prior to joining Adamus in 2010, Attie worked for AngloGold Ashanti as a metallurgist for more than 30 years, including some of AngloGold's most successful mines in West Africa, including Siquiri (Guinea), Iduapriem and Obuasi (both Ghana).
Endeavour is also pleased to announce the further strengthening of its technical team based in Accra, Ghana, with the appointment of Gérard De Hert as Vice President of Exploration. As part of the management progression, two members of Endeavour's Technical Services team have been promoted: David Laing is now Executive Vice President Technical Services and Doug Reddy has been named Senior Vice President Technical Services.
Neil Woodyer, CEO of Endeavour, commented
"Mark Connelly built Adamus Resources into a successful mining operation and has been key in developing Endeavour into the business it is today - a fast growing and profitable gold producer with projects throughout West Africa. We look forward to his valued contribution as a member of our board. Attie Roux, with his proven operational management and technical expertise in commissioning the Nzema project on time and on budget, will ensure continuity as COO as we progress with the construction of Agbaou and the integration of Tabakoto into our operating platform.
We are also pleased to welcome Gérard de Hert to our technical team based in Accra, Ghana; his 14 years plus of experience in Africa in both mining and exploration is ideally suited to lead our near-mine and regional exploration programs. Endeavour is continuing to build upon its strong team based in Accra, Ghana, which is the principal technical hub for the Company's expansion throughout the region. The Accra team is complemented by our technical services group in Vancouver; David Laing and Doug Reddy, who between them have over 60 years experience in engineering, mine management, construction, exploration, technical reporting and consulting."
Additional details of the Transaction
The proceeds of the US$20 million Bridge Loan will be used by Avion to fund capital expenditures for the mill expansion at the Tabakoto operation in western Mali, and for other corporate needs. The terms of the Bridge Loan include a repayment date which is 6 months from the date of the loan; the loan may be repaid (a) in cash or (b) by Avion giving notice that it wishes to repay by delivering common shares of Avion to Endeavour. If Avion elects option (b) above, Endeavour may accept or may instead give notice to Avion electing to extend the repayment date by a further 6 month period. The loan is secured by the shares of certain of Avion's subsidiary companies which are holding companies for the Tabakoto, Houndé and Kofi properties.
Subject to pending TSX approval, the Bridge Loan contains an exchange feature enabling Endeavour in its sole discretion to exchange the Bridge Loan principal at any time into Avion common shares at an exchange price of US$0.4323. If Endeavour has not previously exercised its exchange right before the initial repayment date and Avion elects to deliver common shares in lieu of a cash repayment, the exchange price shall be the lower of (i) US$0.4323, and (ii) the 5-day VWAP for Avion on the TSX to the close of trading on the date immediately preceding the initial repayment date.
The Arrangement Agreement includes customary deal protections. Avion has agreed not to solicit any alternative transactions and has agreed to pay Endeavour a break fee of approximately CDN$11.5 million and an Expense Fee of $2 million in certain circumstances. In addition, Endeavour has been granted the right to match any competing offer and has agreed to pay Avion an Expense Fee of $1 million in certain circumstances.
Both the Endeavour and Avion Boards of Directors have determined that the proposed acquisition is in the best interests of their respective companies based on a number of factors, including fairness opinions received from their financial advisors, and have unanimously approved the terms of the Arrangement Agreement and recommend that their respective shareholders vote in favour of the proposed acquisition.
The directors and officers of Endeavour, Avion, Forbes and Manhattan and Stan Bharti have agreed to execute agreements to vote their shares in favour of the proposed acquisition, subject to customary fiduciary waivers in the case of a superior offer.
Stikeman Elliott LLP has provided Endeavour with legal counsel, and Canaccord Genuity Corp. has provided Endeavour's Board of Directors with an opinion that, as of the date thereof and subject to the assumptions, limitations and qualifications set out therein, the exchange ratio is fair, from a financial point of view, to the shareholders of Endeavour.
For the benefit of Endeavour's shareholders, full details of the proposed transaction will be included in a management information circular to be filed with regulatory authorities in both Canada and Australia and mailed to the Endeavour shareholders in accordance with applicable securities laws. For the benefit of Avion's shareholders, Avion will be mailing a management information circular to its shareholders.
Conference Call and Webcast Details
Endeavour will host a conference call and webcast to discuss the transaction as part of its previously announced Q2 results webcast on Thursday, August 9, 2012 at
5:00 AM in Vancouver
8:00 AM in Toronto and New York
1:00 PM in London
8:00 PM in Perth
10:00 PM in Sydney
Participating on the call will be Neil Woodyer, CEO of Endeavour, John Begeman, CEO of Avion, and also from Endeavour: Mark Connelly, COO, Christian Milau, CFO, David Laing, Executive VP - Technical Services, and Doug Bowlby, Executive VP - Corporate Development. Analysts and interested investors are invited to participate in the conference call using the dial in numbers below.
International: +1 201-689-8433
North American toll-free: +1 877-407-0832
Australian toll-free: 0011-800-2246-2666
The conference call can also be accessed through the following link: http://www.endeavourmining.com/s/Webcasts.asp
The call will be archived for later playback on Endeavour's website until August 9, 2013.
Table 1 - Pro Forma Mineral Reserves a
Mine / Project Reserves
Proven Probable Proven & Probable Gold
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Price
Mt g/t Mt g/t Mt g/t US$/oz
Nzema1,2,3,4- Total 11.938 2.0 770,000 2.664 2.3 193,000 14.603 2.0 964,000 US$900
Attributable - 90% 693,000 174,000 867,000
Youga5,6,7 - Total 3.517 2.1 235,000 3.792 1.7 212,000 7.308 1.9 448,000 US$1200
Attributable - 90% 211,000 191,000 403,000
Agbaou8 - Total 5.407 2.3 390,000 5.668 2.8 515,000 11.075 2.5 905,000 US$1200
Attributable - 85% 332,000 438,000 769,000
Finkolo9 - Total 1.037 3.3 109,000 1.381 2.9 127,000 2.418 3.0 237,000 US$900
Attributable - 40% 44,000 51,000 95,000
Tabakoto Underground10, 11 - Total 0.355 5.4 61,000 4.251 4.4 604,000 4.606 4.5 665,000 US$1183
Attributable - 80% 49,000 483,000 532,000
Tabakoto Open Pit10, 11, - Total 0.078 3.7 9,000 0.931 3.6 107,000 1.009 3.6 116,000 US$1183
Attributable - 80% 7,000 86,000 93,000
Tabakoto Stockpile10, 11,- Total 1.291 1.1 46,000 1.291 1.1 46,000 na
Attributable - 80% 37,000 37,000
Pro Forma Total 1,620,000 1,758,000 3,381,000
Pro Forma Attributable 1,373,000 1,423,000 2,796,000
Table 2 - Pro Forma Mineral Resources a
Mine / Project Resources (including reserves) Lower cutoff
Measured Indicated Measured & Indicated Inferred
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces
Mt Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Au g/t
Nzema1,2,3,4 - Total 31.658 1.4 1,409,000 16.671 1.2 656,000 48.329 1.3 2,064,000 17.725 1.1 652,000 0.5
Attributable - 90% 1,268,000 590,000 1,858,000 587,000 0.5
Youga5 - Total 3.526 2.3 266,000 7.897 1.6 398,000 11.422 1.8 664,000 3.462 1.2 138,000 0.5
Attributable - 90% 239,000 358,000 598,000 124,000 0.5
Youga Satellite6 - Total 3.220 1.1 118,000 3.731 1.2 146,000 6.951 1.2 264,000 1.211 1.4 55,000 0.5
Attributable - 90% 106,000 131,000 238,000 50,000 0.5
Ouare9 - Total 4.738 2.1 323,000 0.5
Attributable - 90% 291,000 0.5
Agbaou8 - Total 6.262 2.2 438,000 8.708 2.6 719,000 14.970 2.4 1,157,000 1.473 1.5 73,000 0.5
Attributable - 85% 373,000 611,000 983,000 62,000 0.5
Finkolo9 - Total 3.290 2.3 242,000 6.820 2.0 445,000 10.110 2.1 687,000 6.730 1.4 301,000 0.5
Attributable - 40% 97,000 178,000 275,000 120,000 0.5
Tabakoto Underground10, 11, - Total 0.341 7.0 76,000 4.773 5.5 848,000 5.114 5.6 925,000 6.007 5.0 968,000 2.0
Attributable - 80% 61,000 678,000 740,000 774,000 2.0
Tabakoto Open Pit10, 11 - Total 0.054 4.9 9,000 1.604 3.5 182,000 1.658 3.6 190,000 1.591 2.9 149,000 1.0
Attributable - 80% 7,000 146,000 152,000 119,000 1.0
Kofi12 - Total 6.901 2.3 500,000 6.901 2.3 500,000 12.355 1.8 702,000 0.5
Attributable - 75% 375,000 375,000 527,000 0.5
Houndé13 - Total 13.407 2.1 893,000 13.407 2.1 893,000 10.717 2.1 712,000 0.5
Attributable - 90% 804,000 804,000 641,000 0.5
Pro Forma Total 2,558,000 4,787,000 7,344,000 4,073,000
Pro Forma Attributable 2,151,000 3,871,000 6,023,000 3,295,000
Notes to Mineral Resource and Reserve Tables
a Effective dates are as follows: Nzema & Youga - December 31, 2011, Ouare - June 16 2009, Agbaou - May 25, 2012, Finkolo - June 10, 2010, Tabakoto - January 1, 2012, Kofi - December 21, 2011, Houndé - December 19, 2011
1 Technical Report Southern Ashanti Gold Project, Ghana, West Africa effective August 17, 2009, prepared by Ron Heeks (M.AusIMM), Technical Manager Adamus Resources Limited. Qualified Persons not independent of Endeavour Mining Corporation, Depleted as of December 31, 2011.
2 2012 Mineral Resource update of the Salman Gold Deposit effective February 16 2012, prepared by Nic Johnson (M.AIG), MPR Geological Consultants.
3 2012 Mineral Resource update of the Aliva and Nfutu Gold Deposits effective February 17, 2012, prepared by Nic Johnson (M.AIG), MPR Geological Consultants.
4 Mineral Resource for the Akropon Gold Deposit, Internal Resource Estimate effective February 20, 2012, prepared by William Yeo, Qualified Persons not independent of Endeavour Mining Corporation.
5 Technical Report and Update of Mineral Resources and Mineral Reserves for the Youga Gold Mine, Burkina Faso, West Africa, effective December 31, 2010 and dated March 15, 2011, prepared by A. de Freitas and K. Woodman, Qualified Persons not independent of Endeavour Mining Corporation, Depleted as of December 31, 2011.
6 Youga Satellite Deposits, Internal Resource Estimates, prepared by AMEC under supervision of K. Woodman; Internal Reserve Estimates, prepared by SEMS under supervision of A. de Freitas Qualified Persons not independent of Endeavour Mining Corporation.
7 Ouaré Deposit, Internal Resource Estimate, dated June 16 2009 prepared by A. Mouton under supervision of K. Woodman Qualified Persons not independent of Endeavour Mining Corporation.
8 Agbaou Gold Project Technical Report, Cote d'Ivoire, West Africa for Endeavour Mining Corp. effective date of May 25, 2012, prepared by SRK Consulting South Africa (Pty) Ltd, SENET , Knight Piésold Consulting.
9 Tabakoroni Feasibility Study Report, Tabakoroni Gold Deposit, Mali, West Africa, dated June 10, 2010, prepared by S. Stein and K. Woodman, Qualified Persons not independent of Endeavour Mining Corporation.
10 Andrew Bradfield, P.Eng. and Don Dudek, P.Geo. Sr. Officers of Avion and Qualified Persons, as such term is defined under NI 43-101, are responsible for the Mineral Reserve estimates and have reviewed and approved the scientific and technical information in this document relating to those estimates.
11 The Mineral Reserves have been classified in accordance with requirements of NI 43-101 and the CIM standards. Mineral Reserve estimates are based on a gold price of USD$1,183 per ounce and a 94% process plant recovery. Additional parameters used to define the reserves are presented in a NI 43-101 compliant report filed on SEDAR on August 17, 2011, entitled Technical Report on the Tabakoto Mining Operations Mali, West Africa for Avion Gold Corporation and prepared by P&E Mining Consultants Inc
12 Technical Report and Updated Resource Estimate on the Kofi Project, Mali, Africa for Avion Gold Corp, dated December 21, 2011, and prepared by P&E Mining Consultants Inc.
13 Technical Report and Updated Resource Estimate on the Houndé Property, Burkina Faso, Africa for Avion Gold Corp, dated December 19, 2011, and prepared by P&E Mining Consultants Inc.
Qualified Person
Adriaan "Attie" Roux, Pr. Sci.Nat, Endeavour's Senior VP - Operations, is a Qualified Person under NI 43-101, and has reviewed and approved the technical information in this news release, except if noted otherwise.
About Endeavour Mining Corporation
Endeavour is a gold producer delivering growth. Endeavour owns two gold mines producing approximately 195,000 ounces per year in Ghana and Burkina Faso that are generating significant operating cash flows to fund exploration and development growth. In addition to upside potential at its current operations, Endeavour's third gold mine, Agbaou in Côte d'Ivoire has entered the construction phase for an additional 100,000 ounces per year during Q1 2014. Endeavour's strong financial base encourages investments in long-term operational growth, exploration to replace and increase reserves, and funding for acquisitions.
Endeavour Mining Corporation is listed on the TSX (symbol EDV) and ASX (symbol EVR), and also trades on the OTCQX (symbol EDVMF).
On behalf of Endeavour Mining Corporation
Neil Woodyer
Chief Executive Officer
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