ENDEAVOUR REPORTS Q3-2024
RESULTSAdjusted EBITDA of $317m • Free Cash Flow
of $97m • Shareholder returns paid of $229m
|
OPERATIONAL AND FINANCIAL HIGHLIGHTS |
-
Strongest quarterly production this year of 270koz at AISC
of $1,287/oz; YTD-2024 production of 741koz at AISC of $1,256/oz
with FY-2024 production expected at or around the low end of
guidance with AISC above the top end
|
-
YTD-2024 AISC impact of $149/oz by higher royalty costs
driven by higher gold prices, low grid power availability in
H1-2024 and underperformance at the Sabodala-Massawa
CIL
|
- Adj.
EBITDA of $317m for Q3-2024, up 27% over Q2-2024, and Adj. Net
Earnings of $74m (or $0.30/sh) for Q3-2024
|
- Operating
cash flow before changes in working capital of $245m (or $1.00/sh),
up 15% over Q2-2024
|
- Free
Cash Flow of $97m (or $0.40/sh) for Q3-2024, up 20% over
Q2-2024
|
- Healthy
financial position with improved net debt of $834m and leverage of
0.77x tracking towards 0.5x target following completion of growth
phase
|
-
Shareholder returns paid of $229m; H1-2024 dividend of
$100m (or $0.41/sh) and $29m of share buybacks year to
date
|
| ORGANIC
GROWTH |
-
Commercial production achieved on budget and on schedule at
both Sabodala-Massawa BIOX® Expansion and Lafigué on 1 August 2024;
both project ramp-ups tracking in line with
expectations
|
- Strong
exploration efforts with
$74m spent
YTD-2024; high priority Tanda-Iguela
exploration programme has identified continuous shallow
mineralisation at the Pala Trend 3 target within close proximity to
the Assafou project
|
London, 7 November 2024 –
Endeavour Mining plc (LSE:EDV, TSX:EDV, OTCQX:EDVMF) (“Endeavour”,
the “Group” or the “Company”) is pleased to announce its operating
and financial results for Q3-2024 and YTD-2024, with highlights
provided in Table 1 below.
Table 1: Q3-2024 and YTD-2024 Highlights
from continuing operations1
| All amounts in US$
million unless otherwise specified |
THREE MONTHS
ENDED |
NINE MONTHS ENDED |
| 30
September 2024 |
30 June 2024 |
30
September 2023 |
30
September 2024 |
30
September 2023 |
Δ Q3-2024 vs. Q2-2024 |
|
OPERATING DATA |
|
|
|
|
|
|
| Gold Production, koz |
270 |
251 |
281 |
741 |
792 |
+8% |
| Gold sold, koz |
280 |
238 |
278 |
743 |
799 |
+18% |
| All-in Sustaining Cost2,3,
$/oz |
1,287 |
1,287 |
967 |
1,256 |
974 |
—% |
|
Realised Gold Price4, $/oz |
2,342 |
2,287 |
1,903 |
2,233 |
1,910 |
+2% |
| CASH
FLOW |
|
|
|
|
|
|
| Operating Cash Flow before
changes in working capital |
245 |
213 |
121 |
595 |
500 |
+15% |
| Operating Cash Flow before
changes in working capital2, $/sh |
1.00 |
0.87 |
0.49 |
2.43 |
2.02 |
+15% |
| Operating Cash Flow |
255 |
258 |
115 |
568 |
453 |
(1)% |
| Operating Cash Flow2,
$/sh |
1.04 |
1.05 |
0.47 |
2.32 |
1.83 |
(1)% |
| Free Cash Flow2,5 |
97 |
81 |
(80) |
45 |
(130) |
+20% |
| Free Cash Flow2,5, $/sh |
0.40 |
0.33 |
(0.32) |
0.18 |
(0.53) |
+21% |
|
PROFITABILITY |
|
|
|
|
|
|
| Net Earnings Attributable to
Shareholders |
(95) |
(60) |
60 |
(175) |
137 |
n.a. |
| Net Earnings, $/sh |
(0.39) |
(0.24) |
0.24 |
(0.71) |
0.55 |
n.a. |
| Adj. Net Earnings Attributable
to Shareholders2 |
74 |
3 |
70 |
117 |
188 |
+2367% |
| Adj. Net Earnings2, $/sh |
0.30 |
0.01 |
0.28 |
0.48 |
0.76 |
+2900% |
| EBITDA2 |
128 |
193 |
262 |
477 |
704 |
(34)% |
| Adj. EBITDA2 |
317 |
249 |
263 |
779 |
755 |
+27% |
|
SHAREHOLDER RETURNS2 |
|
|
|
|
|
|
| Shareholder dividends
paid |
— |
— |
100 |
100 |
200 |
n.a. |
| Share buybacks |
9 |
8 |
20 |
29 |
40 |
+13% |
|
FINANCIAL POSITION HIGHLIGHTS2 |
|
|
|
|
|
|
| Net Debt |
834 |
835 |
445 |
834 |
445 |
—% |
| Net
Debt / LTM Trailing adj. EBITDA6 |
0.77x |
0.81x |
0.40x |
0.77x |
0.40x |
(5)% |
1 Continuing Operations excludes the non-core Boungou and
Wahgnion mines which were divested on 30 June 2023. 2This is a
non-GAAP measure, refer to the non-GAAP Measures section for
further details. 3Excludes pre-commercial costs and ounces sold.
4Realised gold prices are inclusive of the Sabodala-Massawa stream
and the realised gains/losses from the Group’s revenue protection
programme.5From all operations; calculated as Operating Cash Flow
less Cash used in investing activities 6Last Twelve Months (“LTM”)
Trailing EBITDA adj includes EBITDA generated by discontinued
operations.
Management will host a conference call and
webcast today, 7 November 2024, at 8:30 am EST / 1:30 pm GMT. For
instructions on how to participate, please refer to the conference
call and webcast section at the end of the news release. A copy of
the Management Report and Financial Statements have been submitted
to the National Storage Mechanism and will be filed on SEDAR+. The
documents will shortly be available for inspection on the Company’s
website and at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Ian Cockerill, Chief Executive Officer,
commented: “During Q3-2024 we continued to deliver against our
strategic objectives as we successfully completed our growth phase,
achieving commercial production at our two organic growth projects,
which supported our strongest quarter of production this year and
underpinned our transition to a phase focused on free cash flow
generation.
On the operational front, we expect full-year production to be
at or around the low end of the guidance range, while our all-in
sustaining cost is expected to be above the top end of the range,
due to higher royalty and power costs as well as lower production
at the Sabodala-Massawa CIL operation. Despite above average
rainfall early in the Q4, our performance is expected to be
significantly stronger than Q3, supported by the ramp ups of our
growth projects as well as increased production at the Houndé and
Mana mines, in line with their mine sequences.
During the quarter, we completed construction and achieved
commercial production at the Sabodala-Massawa BIOX Expansion and
the Lafigué mine, with both projects ramping up in line with
expectations and achieving nameplate throughput capacity during the
quarter. At the top tier Assafou project, where the preliminary
feasibility study is on track for completion in Q4, we continue to
see significant exploration upside, both at the Assafou project,
and on the wider Tanda-Iguela property.
We achieved a significant free cash inflection during the
quarter, generating approximately $100 million of free cash flow,
and given our strong outlook, we are now focused on shareholder
returns and our balance sheet. We repaid $160 million of our
revolving credit facility during the quarter, while our stronger
earnings supported an improvement in our leverage, as we advanced
towards our 0.5x leverage target. On shareholder returns, we paid
our H1-2024 dividend of $100 million and we have now returned $229
million to shareholders this year through dividends and share
buybacks. We will increase our focus on supplemental shareholder
returns over the coming quarters.
Looking forward, we have visibility to organically grow the
production profile to our 1.5 million ounce portfolio objective by
the end of the decade, while maintaining best in class margins. We
expect to outline our new outlook next year, which will underpin
our continued commitments to disciplined capital allocation and
delivering attractive shareholder returns.”
SHAREHOLDER RETURNS PROGRAMME
-
Endeavour implemented a shareholder returns programme for the 2021
- 2023 period that was comprised of three annual minimum dividends
totalling $450.0 million, supplemented by additional dividends and
share buybacks. Over the shareholder returns programme period,
Endeavour returned $903.0 million to shareholders comprised of
$600.0 million of dividends and $303.0 million of share buybacks;
more than double the minimum commitment and equivalent to $211
returned for every ounce produced over the 2021-2023 period.
-
During Q3-2024, Endeavour implemented a new shareholder returns
programme to reflect its transition from a phase focused on
investment to one focused on free cash flow generation. The new
programme is comprised of minimum dividends of $435.0 million over
the 2024-2025 period, that are expected to be supplemented with
additional dividends and share buybacks.
-
Dividends are expected to be paid semi-annually, provided that the
prevailing gold price for the dividend period is at or above
$1,850/oz and the Company has a healthy financial position.
Supplemental returns are expected to be paid in the form of
dividends and opportunistic share buybacks, if the gold price
exceeds $1,850/oz and if the Company has a healthy financial
position.
-
Since the beginning of the year, Endeavour has paid $200.0 million
in dividends including the H2-2023 dividend of $100.0 million
($0.41/sh) paid on 25 March 2024 (within the 2021 - 2023 programme)
and the H1-2024 dividend of $100.0 million ($0.41/sh) paid on 10
October 2024 and returned an additional $28.9 million or 1.46
million shares through opportunistic share buybacks, of which $8.8
million or 0.42 million shares were repurchased during
Q3-2024.
-
Since payment of the first dividend in FY-2021, Endeavour has
returned more than $1,032.0 million to shareholders, including
$700.0 million of dividends and $332.0 million of share
buybacks.
Table 2: Cumulative Shareholder
Returns
|
(All amounts in US$m) |
|
MINIMUM DIVIDEND COMMITMENT |
SUPPLEMENTAL DIVIDENDS |
BUYBACKS COMPLETED |
TOTAL RETURN |
△ ABOVE MINIMUM COMMITMENT |
|
|
FY-2020 |
— |
60 |
— |
60 |
+60 |
|
2021-2023 Shareholder Returns Programme (completed) |
FY-2021 |
125 |
15 |
138 |
278 |
+153 |
| FY-2022 |
150 |
50 |
99 |
299 |
+149 |
|
FY-2023 |
175 |
25 |
66 |
266 |
+91 |
|
2024-2025 Shareholder Returns Programme (ongoing) |
H1-2024 |
100 |
— |
20 |
120 |
+20 |
| H2-2024 (Minimum) |
110 |
— |
9 |
119 |
+9 |
|
FY-2025 (Minimum) |
225 |
— |
— |
225 |
— |
|
|
TOTAL |
885 |
150 |
332 |
1,367 |
+482 |
OPERATING SUMMARY
-
Strong safety performance for the Group, with a Lost Time Injury
Frequency Rate (“LTIFR”) from continuing operations of 0.12 for the
trailing twelve months ended 30 September 2024.
-
Q3-2024 production amounted to 270koz, an increase of 19koz over
Q2-2024, due to the ramp up of the Sabodala-Massawa BIOX and
Lafigué operations to commercial production, both of which were
achieved on 1 August 2024, as well as higher production at Houndé,
which was partially offset by lower production at Ity, Mana and the
Sabodala-Massawa CIL operation. Production increased at Houndé due
to higher average grades processed and at Lafigué due to the
ramp-up of the mine towards nameplate capacity, which was achieved
late in Q3. Production decreased at Ity due to lower average grades
processed in line with the mine sequence, at Mana due to lower
tonnes milled following the depletion of the Maoula open pit, and
at Sabodala-Massawa CIL due to the continued lower grade mill feed
as well as strike action, maintenance activity and significantly
above average rainfall lowering throughput levels.
-
Q3-2024 AISC was stable quarter on quarter at $1,287/oz as
commercial production commenced at the low cost Lafigué mine
coupled with lower AISC at Houndé, which was offset by higher AISC
at Ity, Sabodala-Massawa and Mana. Lower AISC at Houndé was due to
higher grades processed and lower power costs as grid power
availability improved significantly compared to Q2-2024. Higher
AISC at Ity, Sabodala-Massawa and Mana were largely due to lower
volumes of gold sold and higher royalty costs due to higher gold
prices, as well as higher sustaining capital at Ity and
Sabodala-Massawa.
Table 3: Group Production
| |
THREE MONTHS ENDED |
NINE MONTHS ENDED |
|
All amounts in koz, on a 100% basis |
30 September2024 |
30 June2024 |
30 September2023 |
30 September2024 |
30 September2023 |
|
Houndé |
74 |
64 |
109 |
179 |
228 |
| Ity |
77 |
96 |
73 |
259 |
250 |
| Mana |
30 |
35 |
30 |
107 |
106 |
| Sabodala-Massawa1 |
54 |
57 |
69 |
159 |
209 |
|
Lafigué1 |
36 |
— |
— |
36 |
— |
|
PRODUCTION FROM CONTINUING OPERATIONS |
270 |
251 |
281 |
741 |
793 |
|
Boungou2 |
— |
— |
— |
— |
33 |
| Wahgnion2 |
— |
— |
— |
— |
68 |
|
GROUP PRODUCTION |
270 |
251 |
281 |
741 |
893 |
1Includes pre-commercial ounces that are not included in the
calculation of All-In Sustaining Costs.2The Boungou and Wahgnion
mines were divested on 30 June 2023.
Table 4: Group All-In Sustaining
Costs
| All
amounts in US$/oz |
THREE MONTHS ENDED |
NINE MONTHS ENDED |
|
30 September2024 |
30 June2024 |
30 September2023 |
30 September2024 |
30 September2023 |
|
Houndé |
1,379 |
1,472 |
787 |
1,457 |
959 |
| Ity |
928 |
885 |
864 |
898 |
793 |
| Mana |
1,987 |
1,927 |
1,734 |
1,756 |
1,408 |
| Sabodala-Massawa1 |
1,219 |
1,164 |
840 |
1,112 |
795 |
| Lafigué1 |
938 |
— |
— |
938 |
— |
|
Corporate G&A |
45 |
48 |
40 |
47 |
50 |
|
AISC FROM CONTINUING OPERATIONS |
1,287 |
1,287 |
967 |
1,256 |
974 |
|
Boungou2 |
— |
— |
— |
— |
1,639 |
| Wahgnion2 |
— |
— |
— |
— |
1,566 |
|
GROUP AISC3 |
1,287 |
1,287 |
967 |
1,256 |
1,045 |
1Excludes pre-commercial costs associated with ounces from the
BIOX expansion project and the Lafigué mine. 2The Boungou and
Wahgnion mines were divested on 30 June 2023. 3This is a non-GAAP
measure, refer to the non-GAAP Measures section for further
details.
FY-2024 OUTLOOK
-
Group production is expected to be at or around the low end of the
FY-2024 production guidance of 1,130 – 1,270koz as outperformance
at Ity coupled with strong performances at Houndé and Lafigué are
expected to be partially offset by the lower performance at the
Sabodala-Massawa CIL operation
-
Group AISC is expected to be above the top end of the $955 –
1,035/oz guided range, due to underperformance at the
Sabodala-Massawa CIL operation driving lower production and higher
AISC, compounded by higher royalty costs associated with the
prevailing higher gold prices and low grid power availability
during H1-2024 affecting assets in Burkina Faso and Côte
d’Ivoire.
Table 5: FY-2024 Production
Outlook
|
|
YTD-2024 ACTUALS |
FY-2024 GUIDANCE |
FY-2024 OUTLOOK |
| (All
amounts in koz, on a 100% basis) |
|
Houndé |
179 |
260 - 290 |
ON TRACK |
| Ity |
259 |
270 - 300 |
ABOVE TOP END |
| Mana |
107 |
150 - 170 |
ON TRACK |
| Sabodala-Massawa1 |
159 |
360 - 400 |
BELOW LOWER END |
|
Lafigué1 |
36 |
90 - 110 |
ON TRACK |
|
Group Production |
741 |
1,130 - 1,270 |
NEAR LOW END |
1Includes pre-commercial production ounces
-
As previously guided, FY-2024 operational performance is weighted
towards Q4-2024, which is expected to be the strongest quarter year
to date. Q4-2024 production is predicated on expected improvements
at the Houndé, Mana, Sabodala-Massawa and Lafigué mines in Q4-2024.
Houndé is expected to benefit from higher grade ore from the Kari
Pump pit in the mill feed, which historically has had slightly
lower recoveries. At Mana, improved access to higher grade
undergound stopes should support higher grade and volumes of
throughput, if the above average rainfall seen in Q3-2024
decreases. The Sabodala-Massawa CIL operation will be supported by
new non-refractory higher-grade ore sources, where pre-stripping
activity is largely complete. The Sabodala-Massawa BIOX and Lafigué
operations are expected to continue to improve as they complete a
full quarter at nameplate production. Conversely at Ity average
grades processed are expected to decrease as a lower proportion of
Ity and Bakatouo ore will be in the mill feed.
-
At Sabodala-Massawa, FY-2024 production is expected to be below the
guided range due to lower availability of high-grade non-refractory
ore, particularly from the Sabodala pit as mining activities
focused on depleting the pit ahead of the potential commencement of
in-pit tailings deposition in 2025. To supplement the mill feed at
the Sabodala-Massawa CIL plant, the Kiesta C and Niakafiri East
deposits have been accelerated into the mine plan, adding
higher-grade non-refractory oxide ores into the FY-2024 mine plan,
that were previously in the plan for FY-2025, resulting in a
decrease in availability of higher-grade non-refractory oxide ores
in the FY-2025 mine plan. The Sabodala-Massawa exploration
programme is prioritising the delineation of potential high-grade
non-refractory oxide targets Sekoto, Mamassato and Koulouqwinde,
that could be incorporated into the near term mine plan.
Table 6: FY-2024 All-In Sustaining Cost
Outlook
|
|
YTD-2024 ACTUALS |
FY-2024 GUIDANCE |
FY-2024 OUTLOOK |
| (All
amounts in US$/oz) |
|
Houndé |
1,457 |
1,000 - 1,100 |
ABOVE TOP END |
| Ity |
898 |
850 - 925 |
ON TRACK |
| Mana |
1,756 |
1,200 - 1,300 |
ABOVE TOP END |
| Sabodala-Massawa1 |
1,112 |
750 - 850 |
ABOVE TOP END |
| Lafigué1 |
938 |
900 - 975 |
ON TRACK |
|
Corporate G&A |
47 |
40 |
ON TRACK |
|
Group AISC |
1,256 |
955 - 1,035 |
ABOVE TOP END |
1Excludes pre-commercial production costs and ounces
-
Group AISC guidance is expected to be above the top end of the
guided range due to higher gold prices increasing royalty costs
(realised gold price exclusive of hedges of $2,321/oz in YTD-2024
above guidance gold price of $1,850/oz, resulting in a +$34/oz
impact on YTD-2024 AISC), lower grid power availability in H1-2024
(+$35/oz impact on group AISC YTD-2024) impacting Houndé
(approximately $58/oz YTD-2024 impact) and Mana (approximately
+$117/oz YTD-2024 impact) and lower levels of production at higher
costs at Sabodala-Massawa (+$80/oz impact on YTD-2024) due to lower
availability of high grade non-refractory ore as mining activities
focussed on depleting the Sabodala pit.
Table 7: YTD-2024 All-In Sustaining Cost
Impacts
|
|
|
YTD-2024ACTUALS |
FY-2024OUTLOOK |
| (All
amounts in US$/oz) |
|
Group AISC at $1,850/oz1 |
|
955 - 1,035 |
| |
Royalties at $2,321/oz2realised gold price |
+34 |
(+) Increase expected in Q4-2024 given high gold price |
| |
Low grid power availability in
H1-20243 |
+35 |
(-) Availability largely improved in early Q3-2024 |
|
|
Sabodala-Massawa CIL performance |
+80 |
(-) Significantly stronger performance expected in Q4-2024 |
|
Group AISC at
$2,321/oz2(actual) |
1,256 |
(-) Stronger production at lower AISC improving FY-2024
AISC |
1FY-2024 group AISC guidance was issued at a $1,850/oz gold
price 2The realised YTD-2024 gold price, exclusive of the
Sabodala-Massawa stream and the realised gains/losses from the
Group’s revenue protection programme, amounted to $2,321/oz. 3As
previously disclosed, grid availability issues increased
self-generated power costs across Burkina Faso and Côte d’Ivoire
assets during the YTD-2024 period.
-
The impact of higher gold prices on royalty costs, low grid power
availability in H1-2024 and Sabodala-Massawa CIL underperformance
on YTD-2024 AISC has been approximately $149/oz, while Q4-2024 AISC
is expected to be significantly lower than YTD-2024 AISC due to
higher levels of production and gold sales, which is expected to be
partially offset by higher royalty costs due to the higher
prevailing gold prices quarter to date.
-
Group sustaining capital expenditure outlook for FY-2024 has been
lowered by $5.0 million to $120.0 million, with $80.5 million
incurred in YTD-2024 (net of YTD-2024 corporate sustaining capital
of $2.1 million), and $30.2 million incurred in Q3-2024 (net of
Q3-2024 corporate sustaining capital of $1.1 million). The decrease
is due to the lower sustaining capital outlook expected at
Sabodala-Massawa due to lower levels of production and a decrease
in planned waste development, and at Lafigué due to the redesign of
the main pit pushback, which was partially offset by higher
sustaining capital at Mana due to increased underground development
and leasing payments to contractors.
-
Group non-sustaining capital expenditure outlook for FY-2024 has
been increased by $35.0 million to $225.0 million, with $162.0
million incurred in YTD-2024, and $68.9 million incurred in
Q3-2024. The increase is due to increased non-sustaining capital at
Ity due to accelerated waste stripping and TSF 2 construction
resulting from higher than guided levels of production, at Mana due
to increased underground development to gain more access to
underground stopes, and at Lafigué due to the main pit pushback
redesign.
-
Growth capital expenditure outlook for FY-2024 remains unchanged at
$245.0 million, with $227.4 million incurred in YTD-2024, primarily
related to construction activities at the Sabodala-Massawa BIOX®
expansion project ($62.4 million incurred in YTD-2024 compared to
FY-2024 guidance of $75.0 million), the Lafigué mine ($157.2
million incurred in YTD-2024 compared to guidance of $170.0
million) and additional spend related to the Kalana project.
-
Exploration expenditure outlook for FY-2024 is expected to be
slightly above the $77.0 million guidance, of which $74.4 million
was incurred in YTD-2024, due to the accelerated exploration
activity at Sabodala-Massawa focused on delineating near-term
non-refractory targets. Exploration expenditure is expected to
decrease into Q4-2024 as the programmes focus on compilation and
desktop work for reserve and resource updates as well as targeting
for next year and beyond. More details on the allocation of the
Group’s increased exploration budget are provided in the sections
below.
Table 8: FY-2024 Sustaining &
Non-Sustaining Capital Expenditure
|
|
YTD-2024SPEND |
FY-2024GUIDANCE |
REVISED FY-2024GUIDANCE |
| (All
amounts in US$m) |
|
Houndé |
39 |
40 |
40 |
| Ity |
6 |
10 |
10 |
| Mana |
18 |
15 |
25 |
| Sabodala-Massawa |
15 |
35 |
30 |
|
Lafigué |
3 |
25 |
15 |
|
Total Sustaining Capital Expenditure |
81 |
125 |
120 |
|
Houndé |
5 |
10 |
10 |
| Ity |
52 |
45 |
60 |
| Mana |
44 |
40 |
50 |
| Sabodala-Massawa |
22 |
40 |
40 |
| Sabodala-Massawa Solar
Plant |
31 |
45 |
45 |
| Lafigué |
4 |
5 |
15 |
|
Corporate G&A |
4 |
5 |
5 |
|
Total Non-Sustaining Capital Expenditure |
162 |
190 |
225 |
|
Total Mine Capital Expenditure |
243 |
315 |
345 |
CASH FLOW SUMMARY
The table below presents the cash flow and net
debt position for Endeavour for the three-month periods ended 30
September 2024, 30 June 2024, and 30 September 2023, and the nine
month periods ended 30 September 2024 and 30 September 2023 with
accompanying explanations below.
Table 9: Cash Flow and Net
Debt
| |
|
THREE MONTHS ENDED |
NINE MONTHS ENDED |
|
All amounts in US$ million unless otherwise specified |
Notes |
30 September 2024 |
30 June 2024 |
30 September 2023 |
30 September 2024 |
30 September 2023 |
|
Net cash from/(used in), as per cash flow
statement: |
|
|
|
|
|
|
| Operating cash flows before
changes in working capital1 |
|
245 |
213 |
121 |
595 |
500 |
| Changes
in working capital1 |
|
10 |
45 |
(5) |
(27) |
(47) |
|
Cash generated from operating activities from continuing
operations |
[1] |
255 |
258 |
115 |
568 |
453 |
| Cash
generated from discontinued operations |
|
— |
(6) |
— |
(6) |
27 |
|
Cash generated from operating activities |
[1] |
255 |
252 |
115 |
562 |
480 |
| Cash
used in investing activities |
[2] |
(158) |
(171) |
(195) |
(517) |
(610) |
|
Free Cash Flow2,3 |
|
97 |
81 |
(80) |
45 |
(130) |
|
Cash generated/(used) in financing activities |
[3] |
(241) |
(150) |
(125) |
(303) |
(198) |
| Effect
of exchange rate changes on cash |
|
9 |
(5) |
(15) |
(7) |
2 |
|
DECREASE IN CASH |
|
(135) |
(74) |
(219) |
(265) |
(326) |
|
Cash and cash equivalent position at beginning of period4 |
|
387 |
461 |
845 |
517 |
951 |
|
CASH AND EQUIVALENT POSITION AT END OF
PERIOD4 |
[4] |
252 |
387 |
625 |
252 |
625 |
|
Principal amount of $500m Senior Notes |
|
500 |
500 |
500 |
500 |
500 |
| Drawn portion of Lafigué Term
Loan |
|
147 |
147 |
35 |
147 |
35 |
| Drawn portion of Sabodala Term
Loan |
|
23 |
— |
— |
23 |
— |
| Drawn portion of $645m
Revolving Credit Facility |
|
415 |
575 |
535 |
415 |
535 |
|
NET DEBT2 |
[5] |
834 |
835 |
445 |
834 |
445 |
|
Trailing twelve month adjusted EBITDA2,5 |
|
1,082 |
1,028 |
1,113 |
1,082 |
1,113 |
|
Net Debt / Adjusted EBITDA (LTM)
ratio2,5 |
|
0.77x |
0.81x |
0.40x |
0.77x |
0.40x |
1 Continuing operations excludes the Boungou and
Wahgnion mines which were divested on 30 June 2023.2 Free cash
flow, net debt, and adjusted EBITDA are Non-GAAP measures. Refer to
the non-GAAP measure section in this press release and in the
Management Report.3Calculated as Operating Cash Flow less Cash used
in investing activities.4Cash and cash equivalents are net of bank
overdrafts ($62.2 at 30 September 2024; $21.1 million at 30 June
2024; Nil at 31 December 2023; Nil at 30 September 2023; Nil at 30
June 2023; Nil at 31 December 2022).5Trailing twelve month adjusted
EBITDA includes EBITDA generated by discontinued operations.
NOTES:
1) Operating cash flows remained
stable with $254.8 million (or $1.04 per share) in Q3-2024 due to
higher revenues and lower income tax payments which were largely
offset by higher operating costs, royalties, gold collar and
inter-quarter forward settlement outflows and a decrease in working
capital inflows as well as the inclusion of a $150.0 million
operating cash inflow related to the pre-payment agreement as
detailed further below. Operating cash flows increased by
$82.1 million from $479.8 million (or $1.94 per share) in YTD-2023
to $561.9 million (or $2.29 per share) in YTD-2024 due to higher
revenues, higher working capital inflows, lower exploration costs
and the proceeds from the $150.0 million gold prepayment, partially
offset by higher operating costs, increased royalties and cash
settlements for gold hedges. Notable variances are summarised
below:
• Working capital was an inflow of $10.1 million in
Q3-2024, a decrease of $34.9 million over the Q2-2024 inflow of
$45.0 million. The inflow in Q3-2024 consisted of (i) a trade and
other payables inflow of $49.6 million related to increases in
supplier payables, royalties payable and payroll-related
liabilities, partially offset by (ii) a receivables outflow of
$31.5 million due to a build-up of VAT receivables, (iii) an
inventory outflow of $4.8 million due to an increase in operational
consumables at Lafigué and stockpile inventory at Sabodala-Massawa
and (iv) a prepaid expenses and other outflow of $3.2 million
related to the timing of payments. Working capital was an
outflow of $27.2 million in YTD-2024, a decrease of $20.2 million
over the YTD-2023 outflow of $47.4 million, largely driven by an
increase in inflows in trade and other payables, partially offset
by an increase in inventory outflows related to a build-up of
stockpiles and consumables at growth projects and an increase in
trade and other receivables due to a build-up of VAT
receivables.
• Gold sales
from continuing operations increased from 238koz in Q2-2024 to
280koz in Q3-2024 due to higher group production in Q3-2024 and the
timing of gold shipments at Sabodala-Massawa. The realised gold
price from continuing operations for Q3-2024 was $2,506 per ounce
compared to $2,322 per ounce for Q2-2024. Inclusive of the Group’s
Revenue Protection Programme (-$106/oz Q3-2024 impact) and London
Bullion Market Association (“LBMA”) gold price averaging strategy
(-$57/oz Q3-2024 impact), the realised gold price for Q3-2024 was
$2,342 per ounce compared to $2,287 per ounce for Q2-2024.Gold
sales from continuing operations decreased from 799koz in YTD-2023
to 743koz in YTD-2024, following lower Group production in
YTD-2024. The realised gold price from continuing operations for
YTD-2024 was $2,321 per ounce compared to $1,915 per ounce for
YTD-2023. Inclusive of the Group’s Revenue Protection Programme
(-$60/oz YTD-2024 impact) and LBMA gold price averaging strategy
(-$28/oz YTD-2024 impact), the realised gold price for YTD-2024 was
$2,233 per ounce compared to $1,910 per ounce for YTD-2023.
• Total cash
cost per ounce decreased from $1,148 per ounce in Q2-2024 to $1,128
per ounce in Q3-2024 due to higher volumes of gold sold and lower
processing unit costs reflecting improved grid availability across
sites in Burkina Faso and Cote d’Ivoire partially offset by higher
royalties due to higher revenue and higher unit processing costs at
Sabodala-Massawa reflecting lower plant availability and
utilisation during the quarter.Total cash cost per ounce increased
from $837 per ounce in YTD-2023 to $1,097 per ounce in YTD-2024 due
to higher royalties, higher processing costs associated with an
increased reliance on self-generated power, higher open-pit mining
costs due to increased drill & blast (Houndé), grade control
drilling (Houndé and Sabodala-Massawa) and longer haulage distances
(Houndé, Ity and Sabodala-Massawa), lower volumes of gold sold, and
a reduction in capitalised stripping costs (Houndé,
Sabodala-Massawa and Ity), partially offset by decreased
underground mining costs at Mana.
• Income taxes
paid decreased by $98.8 million from $163.3 million in Q2-2024 to
$64.5 million in Q3-2024 due largely to the timing of tax payments
in Senegal, Cote d’Ivoire and Burkina Faso from our
Sabodala-Massawa, Ity and Houndé mines, and a decrease in
withholding tax payments related to the upstreaming of cash in the
prior quarter.Income taxes paid increased by $9.1 million from
$270.0 million in YTD-2023 to $279.1 million in YTD-2024 due
largely to the increase in taxes paid at Ity as provisional tax
payments made in YTD-2024 are calculated from a higher FY-2023 tax
base when compared to the prior year and higher withholding taxes
paid due to an increased quantum of cash upstreamed compared to the
prior year-to-date period, partially offset by decreased tax
payments at Mana and Sabodala-Massawa due to lower estimated
taxable profit.
Table 10: Tax Payments from continuing
operations
| |
THREE MONTHS ENDED |
NINE MONTHS ENDED |
|
All amounts in US$ million |
30 September2024 |
30 June2024 |
30 September2023 |
30 September2024 |
30 September2023 |
|
Houndé |
12 |
17 |
11 |
40 |
35 |
| Ity |
25 |
50 |
9 |
75 |
43 |
| Mana |
2 |
3 |
5 |
9 |
21 |
| Sabodala-Massawa |
— |
45 |
65 |
76 |
116 |
| Lafigué |
— |
— |
— |
1 |
— |
|
Other1 |
25 |
49 |
51 |
79 |
54 |
|
Taxes paid by continuing operations |
65 |
163 |
142 |
279 |
270 |
1Included in the “Other” category is income and withholding
taxes paid by Corporate and Exploration entities.
As previously disclosed, on 26 April 2024 the
Company entered into two separate gold prepayment agreements for a
total consideration of $150.0 million in exchange for the delivery
of approximately 76koz in Q4-2024. The gold prepayments secured
$150.0 million of financing for a low cost of capital of
approximately 5.3% and supported the Company’s offshore cash
position during its investment and de-levering phase. The
prepayments are structured as follows:
• A $100.0 million prepayment
agreement with the Bank of Montreal based on a floating arrangement
for the delivery of approximately 54koz in reference to prevailing
spot prices for the settlement of $105.1 million (inclusive of $5.1
million in financing costs) in Q4-2024. The value of the 54koz
above the contracted $105.1 million reimbursement at the time of
delivery will be returned to Endeavour as cash.
• A $50.0 million prepayment
agreement with ING Bank N.V. is based on a fixed arrangement for
the delivery of approximately 22koz for the settlement of $50.0
million in Q4-2024. To mitigate the Group’s exposure to gold price
associated with the delivery of ounces under the fixed arrangement
prepayment agreement, Endeavour has entered into forward purchase
contracts for 22koz at an average gold price of $2,408/oz due in
Q4-2024, locking in a financing cost of approximately $3.0
million.
2) Cash flows used in investing
activities decreased by $13.5 million from $171.4 million in
Q2-2024 to $157.9 million in Q3-2024 due to proceeds of $29.8
million related to the sale of Allied Gold shares, the receipt of
$25.1 million in proceeds related to the settlement agreement for
the disposal of Boungou and Wahgnion (subsequent to quarter-end
Endeavour received the remaining outstanding $5.0 million from the
first $30.0 million tranche on 9 October 2024, with an additional
$10.0 million received on 23 October 2024 related to the second
$30.0 million tranche) and decreased growth capital expenditure
related to closing payments for the Lafigué and BIOX growth
projects partially offset by an increase in sustaining capital
expenditure at Houndé (HME replacement) and Sabodala-Massawa
(purchase of drill rigs for owner-operated grade control) and
increased non-sustaining capital expenditure at Sabodala-Massawa
related to the purchase of additional haulage fleet
capacity. Cash flows used in investing activities decreased by
$93.0 million from $609.8 million in YTD-2023 to $516.8 million in
YTD-2024 largely due to lower growth capital related to the timing
of growth project payments, a $39.8 million inflow related to the
sale of Allied Gold Shares, $25.1 million in proceeds received for
the disposal of Boungou and Wahgnion mentioned above and a decrease
in non-sustaining capital associated with decreased pre-stripping
activities at Ity and Houndé, partially offset by increased
sustaining capital at Houndé (waste development) and Mana
(underground development).
• Sustaining capital from
continuing operations increased from $21.6 million in Q2-2024 to
$31.3 million in Q3-2024, largely due to increased expenditure at
Houndé related to replacement of heavy mining equipment, at Lafigué
due to classification of stripping to sustaining capital after the
declaration of commercial production on 1 August 2024, and at
Sabodala-Massawa due to the timing of purchases of new drill
rigs.Sustaining capital from continuing operations increased from
$71.8 million in YTD-2023 to $82.6 million in YTD-2024 due to
higher sustaining capital expenditure at Houndé related to
increased stripping activity, and at Mana related to increased
underground development and inaugural sustaining capital
expenditure at Lafigué, partially offset by reduced expenditure at
Sabodala-Massawa and Ity.
• Non-sustaining capital from
continuing operations increased from $51.8 million in Q2-2024 to
$68.9 million in Q3-2024 largely due to an increase at
Sabodala-Massawa as spending on the Solar Power Plant optimisation
initiative accelerated and at Lafigué related to the pre-stripping
activities following the declaration of commercial production from
1 August 2024.Non-sustaining capital from continuing operations
decreased from $192.8 million in YTD-2023 to $162.0 million in
YTD-2024 largely due to decreased expenditure at Ity due to
decreased pre-stripping activities at Le Plaque and expenditure
related to the Recyn optimisation initiative and decreased
expenditure at Houndé due to reduced pre-stripping activities at
the Kari Pump pit, partially offset by increased expenditure at
Sabadola-Massawa related to the ongoing solar power plant
optimisation initiative.
• Growth capital decreased from
$93.4 million in Q2-2024 to $35.3 million in Q3-2024, as the
Sabodala-Massawa BIOX® Expansion and Lafigué growth projects were
completed during the quarter.Growth capital decreased from $292.5
million in YTD-2023 to $227.4 million in YTD-2024 due to the timing
of construction activities at the Sabodala-Massawa BIOX® Expansion,
which was launched in Q2-2022, and the Lafigué development project,
which was launched in Q4-2022.
3) Cash flows used in financing
activities increased by $91.2 million from an outflow of $149.8
million in Q2-2024 to an outflow of $241.0 million in Q3-2024
largely due to $190.1 million in repayments of debt made during the
quarter. Financing cash outflows in Q3-2024 included $190.1 million
in repayments of debt including $185.0 million in repayment of the
Company’s RCF ($415.0 million drawn as at Q3-2024) and $5.1 million
in repayment of the Sabodala Term Loan, payment of dividends to
minorities of $74.9 million related to the upstreaming of cash,
payments of financing and other fees of $15.4 million,
acquisition of the Company’s own shares through its share buyback
programme of $8.2 million, and payment of finance and lease
obligations of $5.6 million. Outflows were partially offset by
$53.2 million in proceeds from long-term debt including $25.0
million drawn from the Company’s RCF and $28.2 million drawn from
the Sabodala-Massawa Term loan.On 29 July 2024, the Group entered
into a $28.2 million term loan with Ecobank, a local banking
partner in Senegal, as part of the Group’s strategy to
progressively move its debt onshore to reduce leakages associated
with debt service and repayments of offshore debt. During Q3-2024,
the Group drew down the full $28.2 million and subsequently repaid
$5.1 million. The term loan bears interest at an attractive fixed
rate of 6.0% per annum, payable monthly, maturing in December
2024.On 5 November 2024, subsequent to quarter end, the Group
signed a new $700.0 million sustainability-linked Revolving Credit
Facility (“RCF”) at the same favourable terms as the 2021 $645.0
million RCF that will be re-financed. The new RCF will bear
interest at a rate equal to SOFR plus between 2.40% to 3.40% per
annum based on leverage, in line with the 2021 RCF, and will have
4-year term with the potential for a 1-year extension. The new
facility was coordinated by Citibank and comprises a syndicate of
eight banks including Citibank, Bank of Montreal who acted as the
Sustainability Co-ordinator, HSBC Bank, ING Bank, Macquarie Bank,
Nedbank, Standard Bank of South Africa, and Standard Chartered
Bank. The new sustainability-linked RCF integrates the core
elements of Endeavour’s sustainability strategy into its financing
strategy, specifically climate change, biodiversity and malaria,
with clear sustainability-linked performance metrics that will be
measured on an annual basis and reviewed by an independent external
verifier. For more details on the sustainability-linked RCF, please
refer to the MD&A.Cash flows used in financing activities
increased by $105.5 million from an outflow of $197.6 million in
YTD-2023 to an outflow of $303.1 million in YTD-2024 largely due a
net inflow of $273.3 million in proceeds from debt in the prior
period.
4) At quarter end, Endeavour’s cash
and cash equivalents, net of $62.2 million in drawn cash on bank
overdraft facilities, stood at $251.8 million.
5) Endeavour’s net debt position
decreased by $1.8 million, from $835.4 million at the end of
Q2-2024 to $833.6 million at the end of Q3-2024 and the net debt /
Adjusted EBITDA (LTM) leverage ratio decreased from 0.81x at the
end of Q2-2024 to 0.77x at the end of Q3-2024, reflecting the
completion of the Company’s growth phase and a transition towards a
phase focused on de-levering and shareholder returns.
EARNINGS FROM CONTINUING OPERATIONS
The table below presents the earnings and
adjusted earnings for Endeavour for the three-month periods ended
30 September 2024, 30 June 2024, and 30 September 2023, and the
nine month periods ended 30 September 2024 and 30 September 2023
with accompanying explanations below.
Table 11: Earnings from Continuing
Operations
| |
|
THREE MONTHS ENDED |
NINE MONTHS ENDED |
|
All amounts in US$ million unless otherwise specified |
Notes |
30 September2024 |
30 June2024 |
30 September2023 |
30 September2024 |
30 September2023 |
|
Revenue |
[6] |
706 |
557 |
530 |
1,735 |
1,535 |
| Operating expenses |
[7] |
(272) |
(241) |
(205) |
(714) |
(579) |
| Depreciation and
depletion |
[7] |
(147) |
(128) |
(114) |
(384) |
(316) |
|
Royalties |
[8] |
(52) |
(40) |
(32) |
(126) |
(93) |
|
Earnings from mine operations |
|
234 |
148 |
178 |
512 |
548 |
|
Corporate costs |
[9] |
(12) |
(11) |
(10) |
(33) |
(38) |
| Impairment of mining interests
and goodwill |
|
— |
— |
— |
— |
(15) |
| Share-based compensation |
|
(4) |
(5) |
(5) |
(13) |
(22) |
| Other expense |
[10] |
(23) |
(13) |
(1) |
(53) |
(4) |
| Derecognition and impairment
of financial assets |
[11] |
(112) |
(17) |
(6) |
(129) |
(6) |
|
Exploration costs |
[12] |
(4) |
(4) |
(15) |
(14) |
(42) |
|
Earnings from operations |
|
79 |
97 |
141 |
270 |
421 |
|
(Loss)/gain on financial instruments |
[13] |
(98) |
(32) |
7 |
(176) |
(34) |
| Finance costs |
|
(29) |
(26) |
(19) |
(79) |
(52) |
|
Earnings before taxes |
|
(49) |
39 |
129 |
15 |
336 |
|
Current income tax expense |
[14] |
(68) |
(135) |
(54) |
(244) |
(193) |
| Deferred income tax
recovery |
|
40 |
51 |
(2) |
98 |
47 |
|
Net comprehensive (loss)/earnings from continuing
operations |
[15] |
(77) |
(45) |
74 |
(131) |
190 |
|
Add-back adjustments |
[16] |
169 |
65 |
13 |
300 |
58 |
|
Adjusted net earnings from continuing
operations |
|
91 |
20 |
87 |
168 |
248 |
|
Portion attributable to non-controlling interests |
|
18 |
17 |
17 |
51 |
60 |
|
Adjusted net earnings from continuing operations
attributable to shareholders of the Company |
[17] |
74 |
3 |
69 |
117 |
188 |
|
Adjusted net earnings per share from continuing
operations |
|
0.30 |
0.01 |
0.28 |
0.48 |
0.76 |
NOTES:
6) Revenue increased by $149.1
million from $556.8 million in Q2-2024 to $705.9 million in Q3-2024
due to higher volumes of gold sales and a $184 per ounce increase
in the realised gold price from $2,322 per ounce in Q2-2024 to
$2,506 per ounce in Q3-2024, exclusive of the Company’s Revenue
Protection Programme (Gold collars and London Bullion Market
Association (“LBMA”) gold price averaging strategy).Revenue
increased by $200.1 million from $1,535.3 million in YTD-2023 to
$1,735.4 million in YTD-2024 due to a higher realised gold price
for YTD-2024 of $2,321 per ounce compared to $1,915 per ounce for
YTD-2023, exclusive of the Company’s Revenue Protection Programme
(Gold collars and LBMA gold price averaging strategy), partially
offset by lower volumes of gold sold.
7) Operating expenses increased by
$31.2 million from $241.2 million in Q2-2024 to
$272.4 million in Q3-2024 largely due to the ramp-up of
production at Lafigué and the Sabodala-Massawa BIOX® Expansion and
the drawdown of gold inventory sold in excess of production.
Depreciation and depletion increased by $19.4 million from
$127.8 million in Q2-2024 to $147.2 million in Q3-2024 due to
the commencement of depreciation and depletion of the BIOX plant
and refractory ore reserves, coupled with inaugural depreciation
and depletion expenses at Lafigué subsequent to commercial
production declaration.Operating expenses increased by
$135.0 million from $578.5 million in YTD-2023 to
$713.5 million in YTD-2024 due to increased processing costs
across the Group, increased underground mining costs at Mana driven
by higher volumes and increased mining costs at Ity, Houndé and
Sabodala-Massawa, largely reflecting increased diesel consumption
and increased drill and blast activities. Depreciation and
depletion increased by $67.9 million from $315.8 million
in YTD-2023 to $383.7 million in YTD-2024 due to the lower
reserves bases at Ity and Sabodala-Massawa following the December
2023 reserves and resource update, higher levels of production at
Ity, increased depreciation at Sabodala-Massawa related to higher
depreciation rates associated with the Sabodala pit as it
approaches the end of its mine life and inaugural depreciation and
depletion charges at Lafigué and the Sabodala-Massawa BIOX project
subsequent to commercial production from 1 August 2024.
8) Royalties increased by
$11.9 million from $40.2 million in Q2-2024 to
$52.1 million in Q3-2024 due to a higher realised gold price
and higher gold sales volumes.Royalties increased by
$32.8 million from $93.4 million in YTD-2023 to
$126.2 million in YTD-2024 due to a higher realised gold price
and the increase to the sliding scale royalty rate structure in
Burkina Faso effective from November 2023, partially offset by a
decrease in gold sales.
9) Corporate costs of $11.9 million
in Q3-2024 were largely consistent with the prior quarter.Corporate
costs decreased from $37.9 million in YTD-2023 to
$33.3 million in YTD-2024 due to decreased corporate employee
compensation and professional service costs, partially offset by an
increase in administrative and other overhead costs.
10) Other expenses increased by
$9.4 million from $13.4 million in Q2-2024 to
$22.8 million in Q3-2024. For Q3-2024, other expenses included
$15.6 million in restructuring and settlement costs associated
with Sabodala-Massawa, $2.1 million in legal and other costs
primarily related to the Lilium settlement, $2.2 million in
disturbance costs, $2.0 million in community contributions,
$0.8 million in realised losses on the disposal of assets and
$0.1 million in tax claims.
11) De-recognition and impairment of
financial assets increased by $95.1 million from $17.1 million in
Q2-2024 to $112.2 million in Q3-2024 due to the write-down of
expected proceeds from the divestment of the non-core Boungou and
Wahgnion mines as a result of the previously announced settlement
agreement between Endeavour, Lilium and the Government of Burkina
Faso, which comprises a lower consideration than the original
divestment transaction consideration with Lilium in Q2-2023.
Pursuant to the settlement, Endeavour will receive a cash
consideration of $60.0 million comprised of $15.0 million of
upfront cash, $15.0 million cash payable by the end of Q3-2024 and
$30.0 million payable by the end of Q4-2024 in addition to a 3%
royalty on up to 400,000 ounces of gold sold from the Wahgnion
mine. Endeavour received $25.1 million in cash during Q3-2024 and
$14.9 million in early Q4-2024, with the outstanding $20.0 million
expected to be received by the end of Q4-2024 in line with the
payment schedule.De-recognition and impairment of financial assets
increased by $122.9 million from $5.8 million in YTD-2023 to $128.7
million in YTD-2024 due largely to the above mentioned write-down
of expected proceeds from the divestment of the Boungou and
Wahgnion mines.
12) Exploration costs of
$4.3 million in Q3-2024 were consistent with the prior
quarter.Exploration costs decreased from $41.9 million in
YTD-2023 to $14.0 million in YTD-2024 largely due to a
decrease in exploration expense at the Assafou project on the
Tanda-Iguela property, as increasingly, exploration activities are
being capitalised at the Assafou project following the commencement
of the pre-feasibility study, which is expected to be published in
Q4-2024.
13) The loss on financial instruments
increased from a loss of $31.8 million in Q2-2024 to a loss of
$98.3 million in Q3-2024 largely due to an increase in net losses
on gold collars and inter-quarter forward contracts. The loss on
financial instruments during the quarter included an unrealised
loss on gold collars and inter-quarter forward contracts of $49.2
million, a realised loss on gold collars and inter-quarter forward
contracts of $45.7 million (including a $29.7 million realised loss
on gold collars and a $16.0 million realised loss on inter-quarter
forward contracts related to London Bullion Market Association
(“LBMA”) gold price averaging), unrealised foreign exchange losses
of $10.3 million and a $1.4 million unrealised loss on other
financial instruments partially offset by a gain on marketable
securities (Turaco Gold Limited and Allied Gold Corporation) of
$7.6 million, an unrealised fair value gain on NSRs and deferred
considerations of $0.5 million and an unrealised gain on the early
redemption feature of senior notes of $0.2 million.The loss on
financial instruments increased from a loss of $33.7 million in
YTD-2023 to a loss of $176.3 million in YTD-2024, due largely to
realised and unrealised losses in relation to the Revenue
Protection Programme and exchange rate movements between the Euro
and the US dollar.As previously disclosed, in order to increase
cash flow visibility during its construction and de-leveraging
phases, Endeavour entered into a Revenue Protection Programme,
using a combination of zero premium gold collars and forward sales
contracts, to cover a portion of its 2023, 2024 and 2025
production.
• During Q3-2024, 113koz were
delivered into gold collars at the call gold price of $2,400/oz.
For Q4-2024, approximately 113koz are expected to be delivered into
a collar with an average call price of $2,400/oz and an average put
price of $1,807/oz.
• For FY-2025, approximately
200koz are expected to be delivered into a collar with an average
call price of $2,400/oz and an average put price of $1,992/oz.
14) Current income tax expense
decreased by $66.8 million from $135.0 million in Q2-2024 to $68.2
million in Q3-2024 largely due to a decrease in recognised
withholding tax expenses in Q3-2024 compared to $73.6 million in
Q2-2024, due to the timing of local board approvals for cash
upstreaming, partially offset by an increase in current corporate
income taxes driven by higher taxable profits at Houndé and Ity as
well as the addition of tax provisions at Lafigué subsequent to the
declaration of commercial production.Current income tax expense
increased by $50.6 million from $193.1 million in YTD-2023 to
$243.7 million in YTD-2024 due to an increase in withholding taxes
on dividends paid by operating subsidiaries, an increase in current
income taxes at Houndé and Ity, and adjustments in respect of the
prior year income tax mainly in relation to the temporary
contribution of 2% of net profit after tax of operating mines in
Burkina Faso.
15) Net comprehensive losses from
continuing operations increased by $32.4 million from a net
comprehensive loss of $44.8 million in Q2-2024 to a net
comprehensive loss of $77.2 million in Q3-2024. The increase in
losses is largely driven by the impairment of proceeds from Boungou
and Wahgnion divestment following the Lilium settlement, higher
losses on financial instruments related to the Revenue Protection
Programme, higher royalties and higher depreciation partially
offset by improved operating margins and a lower tax expense.
Net comprehensive earnings from continuing
operations decreased by $321.5 million from net comprehensive
earnings of $190.2 million in YTD-2023 to a net comprehensive loss
of $131.3 million in YTD-2024. The decrease in earnings was largely
driven by higher losses on financial instruments related to the
Revenue Protection Programme, the above-mentioned impairment, lower
production, lower operating margins, higher depreciation, higher
other expenses and higher royalties recorded in addition to higher
finance costs due to increased interest expenses reflecting higher
borrowings.
16) For Q3-2024, adjustments included
an impairment of $112.2 million related to the write-down of
proceeds from the sale of the Boungou and Wahgnion assets, an
unrealised loss on financial instruments of $52.7 million largely
related to the unrealised loss on forward sales and collars, and
other expenses of $22.8 million largely related to the
Sabodala-Massawa employee settlement and legal and other costs for
the now settled Lilium arbitration process, partially offset by a
gain on non-cash, tax and other adjustments of $19.1 million that
mainly relate to the impact of foreign exchange remeasurements of
deferred tax balances.
17) Adjusted net earnings
attributable to shareholders for continuing operations increased by
$70.6 million from earnings of $3.1 million (or $0.01 per share) in
Q2-2024 to adjusted net earnings of $73.7 million (or $0.30 per
share) in Q3-2024, due to improved operating margins and lower tax
expenses.Adjusted net earnings attributable to shareholders for
continuing operations decreased by $70.7 million from $188.1
million (or $0.76 per share) in YTD-2023 to $117.4 million (or
$0.48 per share) in YTD-2024 due to lower production, lower
operating margins, higher royalties and higher realised losses on
gold collars and hedges.
OPERATING ACTIVITIES BY
MINE
Houndé Gold Mine, Burkina
Faso
Table 12: Houndé Performance
Indicators
|
For The Period Ended |
Q3-2024 |
Q2-2024 |
Q3-2023 |
|
YTD-2024 |
YTD-2023 |
|
Tonnes ore mined, kt |
1,111 |
1,301 |
1,209 |
|
3,136 |
3,921 |
| Total tonnes mined, kt |
9,567 |
11,619 |
10,603 |
|
32,283 |
35,687 |
| Strip ratio (incl. waste
cap) |
7.61 |
7.93 |
7.77 |
|
9.29 |
8.10 |
| Tonnes milled, kt |
1,348 |
1,313 |
1,400 |
|
3,743 |
4,189 |
| Grade, g/t |
2.00 |
1.70 |
2.68 |
|
1.71 |
1.84 |
| Recovery rate, % |
86 |
87 |
91 |
|
87 |
92 |
|
Production, koz |
74 |
64 |
109 |
|
179 |
228 |
|
Total cash cost/oz |
1,233 |
1,340 |
704 |
|
1,242 |
834 |
|
AISC/oz |
1,379 |
1,472 |
787 |
|
1,457 |
959 |
Q3-2024 vs Q2-2024 Insights
-
Production increased from 64koz in Q2-2024 to 74koz in Q3-2024, in
line with the mine sequence, due to higher average grades processed
and slightly higher tonnes milled, partially offset by a slight
decrease in recovery rates.
-
Total tonnes mined and tonnes of ore mined decreased due to the
higher than average rainfall impacting mining rates. Ore mining
activities during the quarter focused on the Kari Pump and Vindaloo
Main pits with some supplemental ore mined from the Kari West
pit.
-
Tonnes milled increased slightly due to higher mill availability
during the quarter.
- Average processed grades increased due to a higher proportion
of high grade, fresh ore sourced from the Kari Pump pit in the mill
feed.
-
Recovery rates slightly decreased due to the increased proportion
of Kari Pump ore in the mill feed, which has slightly lower
associated recoveries.
-
AISC decreased from $1,472/oz in Q2-2024 to $1,379/oz in Q3-2024
due to the higher volume of gold sold and lower processing costs
associated with reduced self-generated power usage as grid
availability significantly improved following lower availability in
the prior quarter, partially offset by higher sustaining capital
due to the accelerated purchase of new heavy mine equipment and
increased mining unit costs associated with lower mined volumes and
increased drill and blast and grade control drilling
activities.
-
Sustaining capital expenditure increased from $8.0 million in
Q2-2024 to $11.1 million in Q3-2024 and primarily related to the
accelerated purchase of new heavy mining equipment.
- Non-sustaining
capital expenditure decreased slightly from $1.6 million in Q2-2024
to $1.3 million in Q3-2024 and primarily related to the ongoing TSF
Stage 8 and 9 embankment raises.
YTD-2024 vs YTD-2023
Insights
-
Production decreased from 228koz in YTD-2023 to 179koz in YTD-2024
largely in line with the mine sequence primarily due to lower
tonnes milled as a result of the processing of harder fresh ore
from the Kari area pits, lower average grades processed associated
with a lower proportion of ore from the high-grade Kari Pump pit in
the mill feed year to date, and lower recovery rates due to an
increased proportion of ore from the Kari Pump pit with lower
associated recoveries, in addition to the impact of the 11-day
strike in Q1-2024.
-
AISC increased from $959/oz in YTD-2023 to $1,457/oz in YTD-2024,
due to lower volumes of gold sold, higher processing unit costs due
to the increased use of self-generated power in H1-2024, increased
sustaining capital due to increased sustaining waste development
activities and heavy mining equipment purchases, and higher
royalties following a higher realised gold price and the increase
in the royalty rate sliding scale in November 2023.
FY-2024
Outlook
-
Houndé is on track to achieve its FY-2024 production guidance of
260koz - 290koz, while AISC is expected to be above the top-end of
the guided $1,000/oz - $1,100/oz range due to the increased
reliance on self-generated power at higher cost in H1-2024 (+$58/oz
impact on YTD-2024 AISC) and higher royalties reflecting the
increased gold price compared to the guidance gold price of
$1,850/oz (+$47/oz impact on YTD-2024 AISC).
-
In Q4-2024, production is expected to increase as an increased
proportion of high-grade ore is expected to be sourced from the
Kari Pump pit, while throughput and recoveries are expected to
remain broadly consistent with Q3-2024. AISC is expected to
decrease due to higher levels of production and gold sales, which
is expected to be partially offset by higher royalty costs due to
the higher prevailing gold prices.
-
Sustaining capital expenditure outlook for FY-2024 remains
unchanged compared to the previously disclosed guidance of
$40.0 million, of which $38.5 million has been incurred
in YTD-2024. During Q4-2024 sustaining capital expenditure is
expected to primarily relate to mining fleet replacements, waste
stripping activities and plant upgrades.
- Non-sustaining
capital expenditure outlook for FY-2024 remains unchanged compared
to the previously disclosed guidance of $10.0 million of which
$4.9 million has been incurred in YTD-2024. During Q4-2024
non-sustaining capital expenditure is expected to mainly relate to
the ongoing TSF Stage 8 and 9 embankment raise and infrastructure
upgrades.
Ity Gold Mine, Côte
d’Ivoire
Table 13: Ity Performance
Indicators
|
For The Period Ended |
Q3-2024 |
Q2-2024 |
Q3-2023 |
|
YTD-2024 |
YTD-2023 |
|
Tonnes ore mined, kt |
2,027 |
1,840 |
1,246 |
|
5,692 |
5,069 |
| Total tonnes mined, kt |
7,761 |
7,132 |
6,020 |
|
22,299 |
20,542 |
| Strip ratio (incl. waste
cap) |
2.83 |
2.88 |
3.83 |
|
2.92 |
3.05 |
| Tonnes milled, kt |
1,631 |
1,761 |
1,494 |
|
5,167 |
5,121 |
| Grade, g/t |
1.64 |
1.79 |
1.60 |
|
1.71 |
1.63 |
| Recovery rate, % |
92 |
92 |
93 |
|
91 |
93 |
|
Production, koz |
77 |
96 |
73 |
|
259 |
250 |
|
Total cash cost/oz |
899 |
869 |
826 |
|
874 |
762 |
|
AISC/oz |
928 |
885 |
864 |
|
898 |
793 |
Q3-2024 vs Q2-2024 Insights
-
Production decreased from 96koz in Q2-2024 to 77koz in Q3-2024, in
line with the mine sequence, due to lower tonnes of ore milled at
lower average grades processed, while recoveries remained
consistent.
-
Total tonnes mined and tonnes of ore mined increased due to
improved fleet productivity. Mining activities during the quarter
sourced ore from the Ity, Walter, Bakatouo, Verse Ouest and Le
Plaque pits with supplemental contributions from stockpiles.
-
Tonnes milled slightly decreased due to the impact of higher than
average rainfall, increasing the moisture content in the ore,
increasing the frequency of blockages in the feed chute and
screens.
-
Average processed grades decreased due to a greater proportion of
lower grade ore from the Walter pit in the mill feed and lower
grades sourced from the Le Plaque pit, in line with the mine
sequence.
-
Recovery rates remained in line with the previous quarter.
-
AISC increased from $885/oz in Q2-2024 to $928/oz in Q3-2024 due to
the lower volumes of gold sold, a slight increase in sustaining
capital and higher royalty costs related to the higher gold price,
partially offset by lower mining and processing unit costs.
-
Sustaining capital expenditure increased from $1.6 million in
Q2-2024 to $2.4 million in Q3-2024 and was primarily related
to plant upgrades and dewatering borehole drilling.
-
Non-sustaining capital expenditure decreased from
$18.5 million in Q2-2024 to $17.3 million in Q3-2024 and
was primarily related to the construction and commissioning of the
mineral sizer optimisation initiative, plant upgrades, as well as
the ongoing cutback activities at the Walter pit.
YTD-2024 vs YTD-2023 Insights
-
Production increased from 250koz in YTD-2023 to 259koz in YTD-2024
due to higher average grades processed as higher-grade ore was
sourced from the Ity pit, and higher throughput due to plant
upgrades, which were partially offset by lower recoveries
associated with the processing of semi-refractory ore from the
Daapleu pit in Q1-2024.
-
AISC increased from $793/oz in YTD-2023 to $898/oz in YTD-2024 due
to higher royalty costs related to the higher gold price, increased
processing unit costs associated with the increased reliance on
self-generated power in H1-2024 and the commissioning of the Recyn
circuit, partially offset by an increase in gold volumes sold.
FY-2024
Outlook
-
Given the strong YTD-2024 performance, Ity is on track to achieve
above the top end of its FY-2024 production guidance of 270koz -
300koz at its AISC guidance of between $850/oz - $925/oz.
-
In Q4-2024, ore is expected to be sourced from the Le Plaque,
Walter, Bakatouo and Ity pits with supplemental feed sourced from
stockpiles. Average grades processed are expected to decrease due
to a lower proportion of high-grade ore from the Ity and Bakatouo
pits in the mill feed, which is expected to be partially offset by
an increase in throughput following the commissioning of the
mineral sizer primary crusher late in Q3-2024, as well as the
expected improved mill utilisation following the end of the wet
season.
-
Sustaining capital expenditure outlook for FY-2024 remains
unchanged at $10.0 million, of which $6.3 million has
been incurred in YTD-2024, and is mainly related to plant equipment
upgrades, purchase of capital spares and dewatering borehole
drilling.
- Non-sustaining
capital expenditure outlook for FY-2024 is expected to be $60.0
million, an increase on the previously disclosed guidance of
$45.0 million due to the accelerated waste striping and TSF 2
construction resulting from higher than guided levels of
production. $52.0 million has been incurred in YTD-2024
primarily related to waste stripping activities in the Walter pit,
mineral size primary crusher construction, TSF 2 construction and
site infrastructure.
Mana Gold Mine, Burkina
Faso
Table 14: Mana Performance
Indicators
|
For The Period Ended |
Q3-2024 |
Q2-2024 |
Q3-2023 |
|
YTD-2024 |
YTD-2023 |
|
OP tonnes ore mined, kt |
— |
66 |
297 |
|
185 |
1,129 |
| OP total tonnes mined, kt |
— |
219 |
1,508 |
|
930 |
5,194 |
| OP strip ratio (incl. waste
cap) |
0.00 |
2.32 |
4.08 |
|
4.03 |
3.60 |
| UG tonnes ore mined, kt |
484 |
429 |
349 |
|
1,359 |
882 |
| Tonnes milled, kt |
516 |
554 |
643 |
|
1,691 |
1,928 |
| Grade, g/t |
2.15 |
2.10 |
1.66 |
|
2.19 |
1.86 |
| Recovery rate, % |
88 |
89 |
88 |
|
88 |
92 |
|
Production, koz |
30 |
35 |
30 |
|
107 |
106 |
|
Total cash cost/oz |
1,766 |
1,729 |
1,599 |
|
1,587 |
1,311 |
|
AISC/oz |
1,987 |
1,927 |
1,734 |
|
1,756 |
1,408 |
Q3-2024 vs Q2-2024 Insights
-
Production decreased from 35koz in Q2-2024 to 30koz in Q3-2024 due
to lower tonnes milled and lower recoveries, partially offset by an
increase in average grades processed.
-
Total underground tonnes of ore mined increased as stoping
production ramped up, in line with underground mine sequence.
Development rates across the Wona and Siou underground deposits
amounted to 4,030 metres consistent with the prior quarter, as
higher fleet availability was offset by increased dewatering
activities during the wet season. Open pit mining activities ceased
in the prior quarter as the Maoula open pit was depleted.
-
Tonnes milled decreased due to the cessation of open pit mining
activities in the prior quarter in line with the mine sequence,
with the mill feed primarily sourced from the Siou and Wona
underground deposits with some supplementary material from
stockpiles.
-
Average grades processed increased due to mining and processing of
higher grade ore sourced from the Siou underground and the
cessation of the lower grade ore from the Maoula open pit in the
feed, which was partially offset by decreased stoping grades from
the Wona underground.
-
Recovery rates decreased slightly due to a higher proportion of ore
from the Wona underground deposit in the mill feed, which has a
lower associated recovery.
-
AISC increased slightly from $1,927/oz in Q2-2024 to $1,987/oz in
Q3-2024 due to lower gold volumes sold, higher royalties due to the
higher realised gold price and a slight increase in sustaining
capital, partially offset by lower processing unit costs.
-
Sustaining capital expenditure increased from $6.6 million in
Q2-2024 to $6.9 million in Q3-2024 and primarily related to
capitalised underground development at the Siou and Wona
underground deposits as well as leasing payments for contractor
mining equipment.
-
Non-sustaining capital expenditure increased slightly from
$15.0 million in Q2-2024 to $15.2 million in Q3-2024 and
primarily related to capitalised underground development at Wona
and the stage 5 TSF embankment raise.
YTD-2024 vs YTD-2023 Insights
-
Production increased slightly from 106koz in YTD-2023 to 107koz in
YTD-2024 largely due to higher average grades processed, reflecting
a higher proportion of underground ore sourced from the Wona
underground deposit, in the mill feed, which was partially offset
by lower tonnes milled, reflecting a lower proportion of open pit
ore sourced from the Maoula pit.
-
AISC increased from $1,408/oz in YTD-2023 to $1,756/oz in YTD-2024
due to increased underground mining activities, higher royalties
due to the higher gold prices, increased processing unit costs due
to an increased reliance on self-generated power in H1-2024 and
increased sustaining capital due to increased underground
development.
FY-2024 Outlook
-
Mana is on track to achieve its FY-2024 production guidance of
150koz - 170koz at an AISC above the top end of its $1,200 -
$1,300/oz guided range due to increased reliance on self-generated
power at higher costs in response to lower grid power availability
in H1-2024 (+$117/oz impact on YTD-2024 AISC) and higher royalty
costs due to the prevailing higher gold prices (+$40/oz impact on
YTD-2024 AISC), compounded by increased sustaining capital due to
additional mining contractor costs to accelerate underground
development.
-
In Q4-2024, production is expected to increase due to improved
access to higher grade stopes in the Wona underground deposit
supporting an increase in the volume and grade of the mill feed,
while recoveries are expected to remain largely consistent.
-
Sustaining capital expenditure outlook for FY-2024 is expected to
be $25.0 million, an increase on the previously disclosed guidance
of $15.0 million, due to increased underground development at
the Siou and Wona underground deposits, as well as increased
leasing payments for contractor mining equipment associated with
the acceleration of underground development. $18.1 million has
been incurred in YTD-2024 related to capitalised underground
development activities at the Siou and Wona underground deposits
and leasing payments for contractor mining equipment.
- Non-sustaining
capital expenditure for FY-2024 is expected to be $50.0 million, an
increase on the previously disclosed guidance of
$40.0 million, due to increased underground development at the
Siou and Wona underground deposits to gain more access to
underground stopes. $44.3 million has been incurred in
YTD-2024 primarily related to development at the Wona underground
deposit and associated infrastructure and the stage 5 TSF
embankment raise.
Sabodala-Massawa Gold Mine,
Senegal
Table 15: Sabodala-Massawa Performance
Indicators
|
For The Period Ended |
Q3-2024 |
Q2-2024 |
Q3-2023 |
|
YTD-2024 |
YTD-2023 |
|
Tonnes ore mined, kt |
1,282 |
1,491 |
1,745 |
|
4,119 |
4,321 |
| Total tonnes mined, kt |
10,438 |
10,130 |
11,989 |
|
31,015 |
34,624 |
| Strip ratio (incl. waste
cap) |
7.14 |
5.79 |
5.87 |
|
6.53 |
7.01 |
| Tonnes milled - Total, kt |
1,184 |
1,319 |
1,175 |
|
3,684 |
3,500 |
|
Tonnes milled - CIL, kt |
950 |
1,183 |
1,175 |
|
3,298 |
3,500 |
|
Tonnes milled - BIOX, kt |
235 |
136 |
— |
|
386 |
— |
| Grade - Total, g/t |
1.90 |
1.70 |
2.06 |
|
1.74 |
2.09 |
|
Grade - CIL, g/t |
1.65 |
1.57 |
2.06 |
|
1.62 |
2.09 |
|
Grade - BIOX, g/t |
2.90 |
2.82 |
— |
|
2.90 |
— |
| Recovery rate - Total, % |
78 |
77 |
91 |
|
79 |
90 |
|
Recovery rate - CIL, % |
79 |
81 |
91 |
|
81 |
90 |
|
Recovery rate - BIOX, % |
75 |
59 |
— |
|
69 |
— |
| Production,
koz |
54 |
57 |
69 |
|
159 |
209 |
|
Production - CIL, koz |
38 |
50 |
69 |
|
138 |
209 |
|
Production - BIOX, koz |
16 |
6 |
— |
|
22 |
— |
|
Total cash cost/oz |
1,096 |
1,057 |
758 |
|
1,015 |
688 |
|
AISC1/oz |
1,219 |
1,164 |
840 |
|
1,112 |
795 |
1All-in Sustaining Cost excludes costs and
ounces sold related to pre-commercial production at the
Sabodala-Massawa BIOX Expansion.
Q3-2024 vs Q2-2024 Insights
-
Production decreased slightly from 57koz in Q2-2024 to 54koz in
Q3-2024 due to lower tonnes milled through the existing CIL
processing plant, partially offset by increased tonnes milled
through the BIOX processing plant at higher average grades and
recoveries following the commencement of commercial production on 1
August 2024.
-
Total tonnes mined increased due to improved fleet performance
following the commissioning of new additions to the load and haul
fleet. Tonnes of ore mined decreased as mining activities
prioritised pre-stripping activities at the Kiesta C deposit to
provide a higher grade non-refractory ore source for the CIL
processing plant in Q4-2024, in addition to more selective mining
of high-grade fresh refractory ores from the Massawa North Zone and
Massawa Central Zone pits.
-
Total tonnes milled decreased due to a decrease in tonnes milled
through the CIL plant, partially offset by an increase in tonnes
milled through the BIOX plant. Tonnes milled through the CIL plant
decreased due to lower utilisation following a five-day shutdown
due to a strike during August as well as lower availability
following maintenance activities on the SAG mill, which were
completed during the quarter. Tonnes milled through the BIOX plant
increased as the plant continued to ramp-up achieving nameplate
towards the end of the quarter.
-
Average processed grades increased across both the CIL and BIOX
plants. Average processed grades in the CIL increased due to higher
grade fresh non-refractory ore sourced from the Sabodala pit.
Average processed grades at the BIOX plant increased following the
achievement of commercial production, as mining activities advanced
into higher grade fresh refractory ore in the Massawa Central Zone
pit.
- Recovery rates increased due to an
increase in recoveries at the BIOX plant, partially offset by a
decrease in recoveries at the CIL plant. The increase in recoveries
at the BIOX plant was due to the commissioning of flotation
tailings leaching (via the CIL plant) to the BIOX plants floatation
circuit, as well as the mining and processing of a higher
proportion of fresh refractory ore from the Massawa Central Zone
pit towards the end of the quarter, which has better flotation
characteristics supporting improved overall recoveries. The
decrease in recoveries at the CIL plant was largely due to an
increased proportion of semi-refractory ores from Massawa
transitional, Niakafiri East fresh and Sofia which have lower
associated recoveries.
-
AISC increased from $1,164/oz in Q2-2024 to $1,219/oz in Q3-2024
due to lower sales volumes, higher royalty costs due to the
prevailing higher gold prices, increased sustaining capital due to
purchases of grade control drill rigs and higher processing costs
associated with the previously mentioned maintenance in the CIL
plant.
-
Sustaining capital expenditure increased from $4.9 million in
Q2-2024 to $6.9 million in Q3-2024 and primarily related to
the delivery of new drill rigs for owner-operated grade control
drilling.
-
Non-sustaining capital expenditure, excluding expenditure on the
solar power plant, increased significantly from $0.7 million
in Q2-2024 to $20.2 million in Q3-2024 due to the purchases of
new heavy mining equipment.
-
Non-sustaining capital expenditure for the solar power plant
decreased from $14.9 million in Q2-2024 to $9.5 million in Q3-2024
and was mainly related to the ongoing construction activities as
detailed in the Solar Power Plant section below.
YTD-2024 vs YTD-2023 Insights
- Production decreased from 209koz in
YTD-2023 to 159koz in YTD-2024 due to lower average grades in the
CIL plant as increased proportions of low-grade non-refractory
fresh ore from the Sabodala pit was incorporated into the mill feed
as mining this pit to depletion is prioritised so that it can
potentially be used for in-pit tailings deposition in 2025.
Furthermore, lower recoveries in the CIL plant resulted from
increased proportions of semi-refractory ore from Massawa Central
Zone, Niakafiri East and Sofia North Extension pits in the mill
feed that were used to improve the grade of the mill feed. This was
partially offset by the start-up of the BIOX plant, which achieved
commercial production on 1 August 2024 and will contribute a higher
proportion of production in Q4-2024 as it continues to ramp
up.
-
AISC increased from $795/oz in YTD-2023 to $1,112/oz in YTD-2024
due to lower volumes of gold sales, higher royalty costs due to the
prevailing higher gold prices and an increase in mining unit costs
due to increased haulage distances, grade control drilling
activities and maintenance costs, partially offset by lower
sustaining capital due to lower capitalised waste stripping
activities.
FY-2024 Outlook
-
As previously disclosed Sabodala-Massawa production is expected to
be below the bottom end of its production guidance range of 360koz
- 400koz at an AISC above the top end of its $750 - $850/oz
guidance range following mining and processing of a higher
proportion of ore with lower than expected grades and lower
associated recoveries during YTD-2024.
-
In Q4-2024, production from the CIL plant is expected to increase
due to an increase in average grades processed with the
acceleration of the introduction of higher grade non-refractory
oxide ore from the Kiesta C deposit into the mill feed. In
addition, ore will continue to be sourced from the Sabodala,
Niakafiri East and Makhalintang pits. Tonnes milled is expected to
increase due to less stoppages as well as the introduction of
increased oxide ore sourced from Kiesta C deposit into the mill
feed, replacing harder semi-refractory ore from the Massawa and
Sofia areas, which also had lower associated recoveries. The Kiesta
C and Niakafiri East deposits, which have been accelerated into the
FY-2024 mine plan, were originally in the FY-2025 mine plan,
resulting in a decrease in availability of higher-grade
non-refractory oxide ores in the FY-2025 mine plan. The
Sabodala-Massawa exploration programme, the largest exploration
programme in the Group, is prioritising the delineation of
potential high-grade non-refractory oxide deposits Sekoto,
Mamassato and Koulouqwinde that could be incorporated into the near
term mine plan.
-
In Q4-2024, production from the BIOX plant is expected to increase
due to an increase in tonnes milled, average processed grades and
recoveries, in line with the planned ramp-up. Refractory ore for
the BIOX plant is expected to be primarily sourced from the Massawa
Central Zone pits where mining activities were accelerated in
Q3-2024 to provide greater access to high-grade fresh ores, which
will support improved recoveries, with supplemental feed coming
from the Massawa North Zone. Average grades and tonnes milled are
expected to increase as higher volumes of higher grade ore are
mined and processed in Q4-2024 following the achievement of
commercial production on 1 August 2024.
-
Sustaining capital expenditure outlook for FY-2024 is expected to
be $30.0 million, a decrease on the previously disclosed guidance
of $35.0 million due to lower levels of production and a
decrease in planned waste development. $14.7 million has been
incurred in YTD-2024, primarily related to heavy mining replacement
equipment and rebuilds, capitalised waste stripping at the
Niakafiri East deposit and the purchase of new grade control drill
rigs..
-
Non-sustaining capital expenditure for FY-2024 remains unchanged at
$40.0 million, of which $22.1 million has been incurred
in YTD-2024, mainly related to capitalised waste stripping at the
Massawa North Zone and Kiesta C pits, purchases of new mining
equipment, advanced drilling activities, infrastructure at the
Kiesta deposit and the ongoing TSF 1 embankment raise.
-
Non-sustaining capital expenditure outlook for FY-2024 associated
with the solar power plant remains unchanged at $45.0 million, of
which $31.3 million has been incurred in YTD-2024, with additional
details provided in the Solar Power Plant section below.
-
Growth capital expenditure outlook for FY-2024 remains unchanged at
$75.0 million, of which $62.5 million was incurred in
YTD-2024, with the remaining payments for the BIOX project expected
to be incurred in Q4-2024.
Solar Power Plant
-
During Q3-2023, Endeavour launched the construction of a 37MWp
photovoltaic (“PV”) solar facility and a 16MW battery system at the
Sabodala-Massawa mine, in order to significantly reduce fuel
consumption and greenhouse gas emissions, and lower power
costs.
-
The capital cost for the solar project is $55.0 million of which
approximately $43.6 million, or 79% has been committed, with
pricing in line with expectations. $36.9 million, or 67%, of the
capital cost has been incurred as at the end of Q3-2024, of which,
$31.3 million was incurred in YTD-2024 with $9.5 million incurred
in Q3-2024. FY-2024 non-sustaining capital expenditure guidance of
$45.0 million for the project remains unchanged.
-
Progress regarding the critical path items is detailed below:
-
Engineering, procurement, manufacturing and shipping are
complete
-
On site earthworks are largely completed
-
Civil works for the transmission line are progressing well with all
towers erected and cable stringing underway
-
Solar panel segment installation has been largely completed
-
The 16MW battery is expected to arrive on site during Q4 with
connection to the Solar Power Plant and the processing plant
expected in Q4-2024, ahead of commissioning in Q1-2025.
Lafigué Mine, Côte d’Ivoire
Table 16: Lafigué Performance
Indicators
|
For The Period Ended |
Q3-2024 |
Q2-2024 |
Q3-2023 |
|
YTD-2024 |
YTD-2023 |
|
Tonnes ore mined, kt |
1,250 |
1,024 |
— |
|
3,090 |
— |
| Total tonnes mined, kt |
8,873 |
9,296 |
— |
|
27,001 |
— |
| Strip ratio (incl. waste
cap) |
6.10 |
8.08 |
— |
|
7.74 |
— |
| Tonnes milled, kt |
759 |
84 |
— |
|
843 |
— |
| Grade, g/t |
1.57 |
1.02 |
— |
|
1.51 |
— |
| Recovery rate, % |
94 |
89 |
— |
|
94 |
— |
|
Production, koz |
36 |
0.5 |
— |
|
36 |
— |
|
Total cash cost/oz |
831 |
— |
— |
|
831 |
— |
|
AISC/oz1 |
938 |
— |
— |
|
938 |
— |
1All-in Sustaining Cost excludes costs and
ounces sold related to pre-commercial production.
Q3-2024 vs Q2-2024 Insights
-
Production increased from 472 ounces in Q2-2024 to 36koz in Q3-2024
due to the ramp-up of production from the first gold pour on 28
June 2024, to the commencement of commercial production on 1 August
2024, as previously announced on 13 September 2024.
- Mining activities
continue to ramp-up with 27,001kt of total material moved to date
including 3,090kt of ore, the majority of which is stockpiled to
support the continued plant ramp. During Q3-2024, 8,873kt of
material was moved including 1,250kt of ore. Mining activities are
focused on the western and eastern flanks of the Lafigué Main pit
as well as smaller volumes in the West pit.
-
759kt of ore was milled as processing activities continued to
ramp-up to commercial production on 1 August 2024, achieving
nameplate capacity later in Q3-2024.
-
Average processed grades increased to 1.57g/t for Q3-2024, due to
the mining and processing of higher grade ore following the
declaration of commercial production.
-
Recovery rate improved to 94% for Q3-2024 following commercial
production due to a higher proportion of fresh ore processed and
the increased utilisation of the processing plant.
FY-2024 Outlook
-
Lafigué is on track to achieve its FY-2024 production guidance of
90 - 110koz at a post-commercial production AISC within the $900 -
$975/oz guided range, which is in line with the Definitive
Feasibility Study ("DFS") assumptions.
-
In Q4-2024, mining activities are expected to continue across the
western and eastern flanks of the Main pit, as well as the West
pit. Total mined tonnes are expected to increase as the fleet is
progressively mobilised in line with the projected increases in
mining rates. Throughput rates are expected to increase, with
nameplate capacity expected to be achieved for Q4-2024. Average
processed grades are expected to increase through the ramp-up
period as mining advances into zones of higher grade fresh ore
while recovery rates are expected to remain broadly consistent with
Q3-2024.
-
Sustaining capital expenditure outlook for FY-2024 is expected to
be $15.0 million, a decrease on the previously disclosed guidance
of $25.0 million due to the redesign of the main pit pushback. $2.9
million has been incurred in YTD-2024 primarily related to advanced
grade control drilling and spare parts purchases.
-
Non-sustaining capital expenditure outlook for FY-2024 is expected
to be $15.0 million, an increase on the previously disclosed
guidance of $5.0 million due to the acceleration of waste stripping
activity as part of the main pit pushback redesign. $3.5 million
has been incurred in YTD-2024 primarily related to the ongoing
pushback in the western flank of Main pit, the TSF embankment raise
and waste stripping activity in the eastern flank of the Lafigué
Main pit.
- Growth capital
expenditure for the project is approximately $448.0 million, of
which $435.2 million, or 97% of the growth capital has been
incurred to date, of which $157.2 million was incurred in YTD-2024
with $41.0 million incurred in Q3-2024. FY-2024 growth capital
expenditure guidance of $170.0 million remains unchanged.
EXPLORATION ACTIVITIES
-
Endeavour continues to advance its extensive FY-2024 exploration
programme with $74.4 million spent in YTD-2024 comprising
318,048 meters of drilling across 7,056 drillholes. The exploration
programme has focused on resource to reserve conversion and new
resource additions across the Group’s existing operations, as well
as continued drilling on the highly prospective Assafou deposit on
the Tanda-Iguela property in Côte d'Ivoire.
-
Given the increased focus on delineating near term targets at the
Sabodala-Massawa mine, the FY-2024 exploration expenditure is
expected to be slightly above the $77.0 million guidance.
-
Endeavour remains on track to achieve its 5-year exploration target
to discover 12 - 17Moz of Indicated resources over the 2021 to 2025
period, at the low discovery cost of less than $25 per ounce,
having already discovered 10 million ounces at a discovery cost
below $25/oz.
Table 17: Q3-2024 and YTD-2024
Exploration Expenditure and FY-2024
Guidance1
|
|
Q3-2024 ACTUAL |
YTD-2024 ACTUAL |
FY-2024 GUIDANCE |
| All amounts in US$
million |
|
Houndé mine |
1.0 |
8.0 |
10.0 |
| Ity mine |
2.6 |
10.9 |
15.0 |
| Mana mine |
0.5 |
2.0 |
2.0 |
| Sabodala-Massawa mine |
9.0 |
30.8 |
25.0 |
| Lafigué mine |
0.4 |
1.9 |
4.0 |
| Tanda-Iguela |
3.7 |
13.4 |
15.0 |
|
Greenfields |
1.5 |
7.4 |
6.0 |
|
TOTAL |
18.7 |
74.4 |
77.0 |
1Exploration expenditures include expensed, sustaining and
non-sustaining exploration expenditures.
Houndé mine
-
An exploration programme of $10.0 million is planned for
FY-2024, of which $8.0 million has been spent year to date
with $1.0 million spent in Q3-2024. The FY-2024 programme
remains focussed on delineating additional resources at the
Vindaloo Deeps deposit, as well as exploration drilling in the Kari
and Koho areas.
-
During Q3-2024, desktop work on the Vindaloo Deeps deposit focussed
on the interpretation of the high-grade continuity that was defined
in H1-2024, to refine the Vindaloo Deeps geological model.
-
During the remainder of the year, the exploration programme will
continue to focus on delineating the Vindaloo Deeps deposit which
continues to demonstrate the potential to become a significant
high-grade underground resource. Additional drilling is also
expected to continue at the Koho Main, Koho East and Vindaloo North
deposits.
Ity mine
-
An exploration programme of $15.0 million is planned for
FY-2024, of which $10.9 million has been spent year to date
with $2.6 million spent in Q3-2024, consisting of 11,734
metres of drilling across 870 drill holes. The exploration
programme is focused on extending near-mine resources around the
Ity processing plant in order to test the continuity of
mineralisation at depth and in between the Walter, Bakatouo, Zia
Northeast and Ity pits. Drilling is also focused on the
Yopleu-Legaleu deposit and neighbouring Delta Southeast target, to
test the continuity of mineralisation along strike and depth in
order to expand the resources. Additionally, reconnaissance and
delineation work is continuing at several targets on the Ity belt
including the Gbampleu, Mahapleu, Tiepleu, Morgan and Goleu
targets.
- During Q3-2024, drilling at Ity,
West Flotouo and Yopleu-Legaleu deposits continued to follow the
down-dip continuity of mineralisation. Drilling at the Delta
Southeast and Gloleu targets successfully extended mineralisation
along strike and at depth, with follow up infill drilling planned
for 2025 to define a maiden resource estimate. Additional auger
drilling conducted during the quarter focused on early stage
targets near the Gbampleu target, including at the Mahapleu and
Tiepleu targets, identifying new geochemical anomalies which are
expected to be followed up in the 2025 programme.
-
During the remainder of the year, geological interpretation and
modelling will be completed at the deposits around the Ity
processing plant to improve the interpretation of the Ity mine
complex. Furthermore, desktop work will continue at the
Yopleu-Legaleu deposit to update the mineral resource
estimate.
Mana mine
-
An exploration programme of $2.0 million is planned for
FY-2024, of which $2.0 million has been spent year to date
with $0.5 million spent in Q3-2024, consisting of 1,756 metres
of drilling across 47 drill holes. The exploration programme is
focused on delineating near mine high grade oxide targets between
the Nyafé and Fofina historic pit areas and the non-refractory open
pit targets Siou Nord, Bara and Momina, as well as the compilation
of data for further target generation.
-
During Q3-2024, infill drilling was completed on the Bana Camp
target to evaluate a 400 metre mineralised trend that was
identified through trenching earlier in the year, with drilling
returning encouraging results that will be followed up in 2025.
Within the Bara target area, drilling to follow-up on results from
historical trenching and grab samples was undertaken, with assay
results pending. Desktop work continued, successfully identifying
seven prospective targets within 14 kilometres of Mana for follow
up in 2025.
- During the remainder of the year,
the exploration programme will focus on follow-up drilling to test
the potential for oxide resources towards the west and southwest of
the Bana Camp target in addition to continued desktop work on
target generation for the 2025 programme.
Sabodala-Massawa mine
-
Given the accelerated exploration activities focused on defining
near-term targets, the exploration programme is expected to be
slightly above the guided expenditure of $31.0 million for
FY-2024, of which $30.8 million has been spent year to date
including $9.0 million spent in Q3-2024 consisting of 28,898
meters of drilling across 156 drill holes. The exploration
programme is focused on identifying and expanding near-mine
non-refractory high-grade resources across the Niakafiri, Sabodala,
Kerekounda-Golouma and Massawa areas, while testing new targets,
such as the Kawsara target on the Kanoumba permit located along the
Main Transcurrent Zone, 30 kilometres south of the Sabodala-Massawa
processing plants.
-
During Q3-2024, drilling activities focused on defining the
near-term targets including the Sekoto, Mamassato and Koulouqwinde
potential high-grade non-refractory oxide targets that could be
incorporated into the near term mine plan, as well as the Golouma
NW and Kerekounda East targets. Furthermore, on the Kanoumba
permit, drilling activities continued on the large Kawsara target,
delineating its 1,600 metre mineralised trend, and on the 7,000
metre long anomaly to the south west of Kawasara. At the Kerekounda
UG and Golouma UG deposits, drilling during the quarter focussed on
converting Inferred resources to Indicated status, which is
expected to be included in the next mineral resource update.
-
During the remainder of the year, drilling will focus on fully
delineating the near term production targets including Sekoto,
Mamasato and Koulouqwinde in addition to the continued definition
of the potentially large Kawsara target and its adjacent anomalies.
In addition, an airborne electromagnetic survey is planned to
commence along the Main Transcurrent Zone across the Massawa,
Kanoumba and Niamaya permits to identify electromagnetic anomalies
below the laterite cover.
Lafigué mine
- An exploration programme of
$4.0 million is planned for FY-2024, of which
$1.9 million has been spent year to date with
$0.4 million spent in Q3-2024 consisting of 2,533 meters of
drilling across 7 drill holes. The exploration programme is focused
on the WA05, Central Area 11 and Central Area 12 targets, all
located within 5 kilometres of the Lafigué deposit. In addition the
programme is identifying the potential for deep mineralisation
underneath the current Lafigué pitshell.
-
During Q3-2024, drilling focussed on testing the thickness of
high-grade mineralisation below the Lafigué resource pitshell to
asses the future underground potential of the Lafigué pit,
identifying the down-dip continuity of high-grade mineralisation.
Desktop work focused on reviewing available geological, geochemical
and geophysical data within a 15 kilometre radius of the Lafigué
mine to generate new near mine targets, and successfully defined 15
targets of which three have been identified as near-term priorities
within the mining permit, to be followed-up with the 2025
programme.
-
During the remainder of the year, desktop work will focus on
geological interpretation and modelling of the Central Area target
to investigate its potential as a satellite deposit.
Tanda-Iguela
-
An exploration programme of $15.0 million is planned for
FY-2024, of which $13.4 million has been spent year to date
with $3.7 million spent in Q3-2024 consisting of 3,939 meters
of drilling across 15 drill holes. The exploration programme is
focused on extending mineralisation and adding resources at the
Assafou deposit as well as assessing regional satellite targets
within 5 kilometres of Assafou.
-
During Q3-2024, deep drilling was conducted towards the southwest
of Assafou across the sedimentary basin towards the Pala Trend 3
deposits, with mineralisation intercepted in the greenstone rocks
below the sedimentary basin. Desktop work completed during the
quarter focussed on the geologic interpretation and modelling of
the Assafou and Pala deposits, which appear to be part of the same
mineralised system within the same sedimentary basin.
- During the remainder of the year,
geological interpretation and modelling of the Assafou and Pala
deposits will incorporate the 2024 drill results, which are
expected to be incorporated into future mineral resources from
2025.
CONFERENCE CALL AND LIVE WEBCAST
Management will host a conference call and
webcast on Thursday 7 November, at 8:30 am EST / 1:30 pm GMT to
discuss the Company's financial results.
The conference call and webcast are scheduled
at:5:30am in Vancouver8:30am in Toronto and New York1:30pm in
London9:30pm in Hong Kong and Perth
The video webcast can be accessed through the
following link:https://edge.media-server.com/mmc/p/8ooa7ouk
To download a calendar reminder for the webcast, visit the
events page of our website here.
Analysts and investors are also invited to
participate and ask questions by registering for the conference
call dial-in via the following
link:https://register.vevent.com/register/BI1a60fc683b8345ecad064e684a533aa4
The conference call and webcast will be
available for playback on Endeavour's website.
QUALIFIED PERSONS
Ross McMillan, SVP Technical Services of
Endeavour Mining plc., a Fellow of the Australasian Institute of
Mining and Metallurgy, is a "Qualified Person" as defined by
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43-101") and has reviewed and approved the technical
information in this news release.
CONTACT INFORMATION
|
For Investor Relations enquiries: |
For Media enquiries: |
| Jack Garman |
Brunswick Group LLP in
London |
| Vice President of Investor
Relations |
Carole Cable, Partner |
| 442030112723 |
442074045959 |
|
investor@endeavourmining.com |
ccable@brunswickgroup.com |
ABOUT ENDEAVOUR MINING PLC
Endeavour Mining is one of the world’s senior
gold producers and the largest in West Africa, with operating
assets across Senegal, Côte d’Ivoire and Burkina Faso and a strong
portfolio of advanced development projects and exploration assets
in the highly prospective Birimian Greenstone Belt across West
Africa.
A member of the World Gold Council, Endeavour is
committed to the principles of responsible mining and delivering
sustainable value to its employees, stakeholders and the
communities where it operates. Endeavour is admitted to listing and
to trading on the London Stock Exchange and the Toronto Stock
Exchange, under the symbol EDV.
For more information, please visit
www.endeavourmining.com.
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATION
This document contains "forward-looking
statements" within the meaning of applicable securities laws. All
statements, other than statements of historical fact, are
“forward-looking statements”, including but not limited to,
statements with respect to Endeavour's plans and operating
performance, the ability of the Group to achieve its production
guidance, AISC guidance, Group non-sustaining capital expenditure
outlook, and growth capital expenditure outlook for FY-2024, the
estimated exploration expenditures for FY-2024, the ability of
Endeavour to meet its 5-year exploration target, the availability
of additional dividends and share buybacks, the success of
exploration activities, estimated costs incurred in connection with
the construction of the Solar Power Plant and the timing for an
updated resource for the Vindaloo Deeps deposit and Tanda-Iguela.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "expects",
"expected", "budgeted", "forecasts", "anticipates", believes”,
“plan”, “target”, “opportunities”, “objective”, “assume”,
“intention”, “goal”, “continue”, “estimate”, “potential”,
“strategy”, “future”, “aim”, “may”, “will”, “can”, “could”, “would”
and similar expressions .
Forward-looking statements, while based on
management's reasonable estimates, projections and assumptions at
the date the statements are made, 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 or completion of
divestitures; risks related to international operations; risks
related to general economic conditions and the impact of credit
availability on the timing of cash flows and the values of assets
and liabilities based on projected future cash flows; Endeavour’s
financial results, cash flows and future prospects being consistent
with Endeavour expectations in amounts sufficient to permit
sustained dividend payments; the completion of studies on the
timelines currently expected, and the results of those studies
being consistent with Endeavour’s current expectations; actual
results of current exploration activities; production and cost of
sales forecasts for Endeavour meeting expectations; 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; extreme weather events,
natural disasters, supply disruptions, power disruptions,
accidents, pit wall slides, 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 legislation,
regulation of mining operations, tax rules and regulations and
changes in the administration of laws, policies and practices in
the jurisdictions in which Endeavour operates; disputes,
litigation, regulatory proceedings and audits; adverse political
and economic developments in countries in which Endeavour operates,
including but not limited to acts of war, terrorism, sabotage,
civil disturbances, non-renewal of key licenses by government
authorities, or the expropriation or nationalisation of any of
Endeavour’s property; risks associated with illegal and artisanal
mining; environmental hazards; and risks associated with new
diseases, epidemics and pandemics.
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.
The declaration and payment of future dividends
and the amount of any such dividends will be subject to the
determination of the Board of Directors, in its sole and absolute
discretion, taking into account, among other things, economic
conditions, business performance, financial condition, growth
plans, expected capital requirements, compliance with the Company's
constating documents, all applicable laws, including the rules and
policies of any applicable stock exchange, as well as any
contractual restrictions on such dividends, including any
agreements entered into with lenders to the Company, and any other
factors that the Board of Directors deems appropriate at the
relevant time. There can be no assurance that any dividends will be
paid at the intended rate or at all in the future.
NON-GAAP MEASURES
Some of the indicators used by Endeavour in this
press release represent non-IFRS financial measures, including
“all-in margin”, “all-in sustaining cost”, “net cash / net debt”,
“EBITDA”, “adjusted EBITDA”, “net cash / net debt to adjusted
EBITDA ratio”, “cash flow from continuing operations”, “total cash
cost per ounce”, “sustaining and non-sustaining capital”, “net
earnings”, “adjusted net earnings”, “free cash flow”, “operating
cash flow per share”, “free cash flow per share”, and “return on
capital employed”. These measures are presented as they can provide
useful information to assist investors with their evaluation of the
pro forma performance. Since the non-IFRS performance measures
listed herein do not have any standardised definition prescribed by
IFRS, they may not be comparable to similar measures presented by
other companies. Accordingly, they are intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. Please refer to the non-GAAP measures section in this
press release and in the Company’s most recently filed Management
Report for a reconciliation of the non-IFRS financial measures used
in this press release.
Registered Office: 5 Young St, Kensington, London W8
5EH, UK
- EDV_Q3-24 Results News Release
- EDV_Q3-24 Results Presentation
- EDV_Q3-24 MD&A
- EDV_Q3-24 Financial Statements
- EDV_Q3-24 Results Mine Statistics
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