Slide 1: Merger of Equals Creating a New Growth Focused West African Gold Producer
Merger of Equals Creating a New Growth Focused West African Gold Producer Management Presentation August 21/22, 2011 Endeavour Mining August 21, 2011 :: 1
Slide 2: Introduction
Introduction Neil Woodyer Mark Connelly CEO Managing Director / CEO Endeavour Mining Corporation Adamus Resources Limited This presentation may contain forward‐looking information relating to the future performance of Endeavour Mining, Adamus Resources or the combined entity. Forward‐ looking inform
Slide 3: Strategic Rationale
Strategic Rationale Compelling Merger of Equals that combines two highly complementary companies All‐stock transaction allows shareholders to fully participate in future growth and value creation Endeavour intends to invest at least US$160 million from current cash to relieve constraints from
Slide 4: Summary Transaction Terms
Summary Transaction Terms Structure • 0.285 Endeavour shares for each Adamus Share • Market exchange ratio based on a 20‐day VWAP as of Friday, Aug 19, 2011 • Implemented by an Australian “Scheme of Arrangement” Key Statistics • Combined entity to have approx. 243 million shares outstanding (basic)
Slide 5: Key Ownership Metrics
Key Ownership Metrics Metric Endeavour Adamus Combined 20‐day VWAP Price1 CDN$2.38 A$0.66 Market‐derived Exchange Ratio 2 0.285 Issued Shares (millions) 114.7 450.7 Pro Forma Issued Shares (millions) 114.7 128.4 243.1 Pro Forma Ownership (%), basic 47.2% 52.8% 100.0% Fully Diluted Shares (millions)
Slide 6: Key Financial & Gold Ounce Metrics
Key Financial & Gold Ounce Metrics Metric Endeavour Adamus Combined Pro Forma Ownership (%), basic 47.2% 52.8% Market Cap. (US$M), basic 1 $281 $315 $597 Cash & Mkt Securities (US$M)2,3 $195 $21 Long‐term Debt (US$M)2 None $60 Attributable Gold Resources* M&I: 1.9 million ozs 1.6 million ozs 3.5 mil
Slide 7: Adamus & Endeavour Share Price Chart
Adamus & Endeavour Share Price Chart Transaction Consideration: • Endeavour & Adamus have had very similar trading patterns Data source: Bloomberg, Last data point: August 19, 2011 Creating a New Growth Focused West African Gold Producer 7
Slide 8: Merger of Equals – Back-tested Exchange Ratio
“Merger of Equals” – Back‐tested Exchange Ratio Transaction Considerations: • 0.285 share exchange ratio results in approximately equal ownership to Endeavour & Adamus • Over an extended historic period, the implied value has closely tracked Adamus’ historic share price Data source: Bloomberg, Last
Slide 9: Current Market Position
Current Market Position Endeavour Standalone – A TSX‐listed, single mine West African gold producer with 84,000 ozs of annual production, a feasibility stage project in Côte d’Ivoire and large exploration land position. It also has US$195M of cash and marketable securities1, an undrawn US$100M Acqui
Slide 10: Together We Are Better
Together We Are Better Adamus and Endeavour to be combined for our mutual advantage • Creates leading West African gold production, development and exploration company • Combines experienced management teams and board of directors • Strong cash generation from two operating gold mines – de‐risking s
Slide 11: Together We Are Better
Together We Are Better Better positioned for growth • Adamus’ mine building experience to enhance delivery of Agbaou into production • Construction decision Q1 2012, production late 2013 • Extensive exploration portfolio in highly prospective regions (Ghana, Burkina Faso, Côte d’Ivoire, Liberia and
Slide 12: Increased Capital Markets Profile
Increased Capital Markets Profile Endeavour Adamus Combined Comments Average Daily $1.2 $0.6 $1.8 • Scope for increase as critical mass Volume (US$M, achieved Year‐to‐date) Analyst Coverage 2 4 6 • Currently no overlap in coverage • Scope for significant increase in coverage with active dual listing
Slide 13: Proposed Board of Directors
Proposed Board of Directors Michael E. Beckett – Non‐Executive Chairman. Former chair of Ashanti Goldfields Ltd. and former Managing Director of Consolidated Gold Fields, Mr. Beckett has a deep knowledge of African mining Mark Connelly – Managing Director / CEO of Adamus, joined in 2007 as COO. Prev
Slide 14: Mine and Project Locations in West Africa
Mine and Project Locations in West Africa Operating Mines • Youga Mine, Burkina Faso Endeavour • Nzema Mine, Ghana Adamus Feasibility Stage Projects • Agbaou Gold Project, Côte d’Ivoire, with 20,000m drilling & engineering studies underway • Finkolo JV with Resolute near Syama mine in Mali Regional
Slide 15: Pro Forma Gold Production Profile
Pro Forma Gold Production Profile1 300,000 250,000 200,000 Gold Ounces Agbaou, Côte d'Ivoire 150,000 Youga, Burkina Faso Nzema, Ghana 100,000 50,000 ‐ 2011 2012 2013 2014 2015 2016 • 2011e pro forma production of 172,000 ounces at a cash cost per ounce2 of US$575 to US$625 1 Gold production projecti
Slide 16: West African Peers by Market Cap & Resource
West African Peers by Market Cap & Resource Market capitalization data sourced from Bloomberg LP, as of August 19, 2011. Mineral Resource data from company reports. Avocet Mining’s Resources exclude its Southeast Asian assets, which they have sold. Creating a New Growth Focused West African Gold Pro
Slide 17: Transaction Timeline & Next Steps
Transaction Timeline & Next Steps Indicative Timeline: • Merger Implementation Agreement Complete • Due diligence Complete • GMP Securities has stated to the Endeavour Board that the consideration to be offered is fair, from the financial point of view, to the Endeavour shareholders • Adamus receive
Slide 18: Concluding Comments
Concluding Comments • Endeavour + Adamus = A compelling business combination • Strong cash generation from two operating mines • Immediate ability to eliminate Nzema project debt and reduce gold hedge • Enhanced development team for Agbaou • Financial strength and significant “free‐cash” balances fo
Slide 19: Appendix
Appendix Section I • Endeavour – Overview of Principal Mining Assets Section II • Adamus – Overview of Principal Mining Assets Section III • Mineral Reserve & Resources, plus Notes Section IV • Biographies – Corporate Officers • Biographies – Independent Directors (nominees) Creating a New Growth Fo
Slide 20: Endeavour's Mining Assets – Youga Gold Mine
Section I – Endeavour’s Mining Assets YOUGA GOLD MINE, Burkina Faso • Forecast to produce 84,000 ounces in 2011 at a cash cost of approximately $610‐ $650/oz1 • Endeavour owns 90% and remaining 10% held by the Government • Open pit operation with mining in 5 pits • Current Reserves 4.5Mt at 2.5 g/t
Slide 21: Youga Gold Mine - A2 Main Pit
Section I – Endeavour’s Mining Assets Youga Gold Mine ‐ A2 Main Pit Photo taken July 12, 2011 Creating a New Growth Focused West African Gold Producer 21
Slide 22: Exploration Activity Update - Youga
Section I – Endeavour’s Mining Assets Exploration Activity Update ‐ Youga • 2011 exploration and resource delineation program • 12 targets within 3 km of Youga mill and inside the mining permit • Mineralization found in east wall of Main pit and north wall of East pit provide opportunity for pit exp
Slide 23: Youga Mine and Exploration Targets
Section I – Endeavour’s Mining Assets Exploration Activity Update ‐ Youga Youga Mine and Exploration Targets Creating a New Growth Focused West African Gold Producer 23
Slide 24: Youga Greenstone Belt: US$10M Program – 17 Targets
Section I – Endeavour’s Mining Assets Youga Greenstone Belt: US$10M Program – 17 Targets Ouaré Zerbogo Permits 2 drill targets Bitou Permits 3 drill targets Youga Mine Permit 12 drill targets Creating a New Growth Focused West African Gold Producer 24
Slide 25: Exploration Update – Ouaré Deposit (Youga Belt)
Section I – Endeavour’s Mining Assets Exploration Update – Ouaré Deposit (Youga Belt) • Ouaré 2011 exploration and resource delineation program • Deposit approximately 40km from Youga mill • Current Inferred mineral resource 4.7Mt at 2.1g/t* • Drilling to increase resource and upgrade resource class
Slide 26: Agbaou Gold Project, Côte d'Ivoire
Section I – Endeavour’s Mining Assets Agbaou Gold Project, Côte d’Ivoire • 85% Endeavour, 10% State, 5% SODEMI • Open pit with a 1.2Mtpa CIL plant* • Reserves 732,000 ozs (10.9M t at 2.1g/t) • Recovery 91% • Production: 73,100 oz per year for 9.1 years • LOM cash cost US$516/oz (owner fleet) • Capit
Slide 27: Agbaou Gold Project, Côte d'Ivoire
Section I – Endeavour’s Mining Assets Agbaou Gold Project, Côte d’Ivoire • Mining Permit application submitted • Environmental & Social Impact Study approved • Authorization to perform preliminary work received September 2010 • Engineering & technical studies underway to refine and optimize feasibil
Slide 28: Adamus' Mining Assets
Section II – Adamus’ Mining Assets • Newest operating mine in Ghana • Built on‐time and capital cost on‐budget • First gold production 17 January 2011, ahead of schedule • Multi million additional ounce potential through exploration and current concessions • Proven management with West African exper
Slide 29: Ghana – A Premier African Mining Jurisdiction
Section II – Adamus’ Mining Assets Ghana – A Premier African Mining Jurisdiction • Historic, established gold country • Paved roads, grid power & water • Strong technical workforce Nzema Gold Project • Quality, experienced contractors Creating a New Growth Focused West African Gold Producer 29
Slide 30: Mining Areas
Section II – Adamus’ Mining Assets Mining Areas SALMAN TREND 440,000oz Reserve ANWIA & BOKROBO 630,000oz Reserve Creating a New Growth Focused West African Gold Producer 30
Slide 31: Processing Plant & Facilities
Section II – Adamus’ Mining Assets Processing Plant & Facilities Creating a New Growth Focused West African Gold Producer 31
Slide 32: Ancillary Infrastructure
Section II – Adamus’ Mining Assets Ancillary Infrastructure Creating a New Growth Focused West African Gold Producer 32
Slide 33: Village Resettlement
Section II – Adamus’ Mining Assets Village Resettlement • 60% complete • Public buildings complete • Residential housing under construction • Completion in the second half of 2011 Creating a New Growth Focused West African Gold Producer 33
Slide 34: 2011 Exploration & Resources Growth
Section II – Adamus’ Mining Assets 2011 Exploration & Resources Growth • Potential to develop additional satellite deposits (near mine) • Highly prospective concessions (regional) • Sulphide ounces (near mine) • Exploration program includes both RC (25,000m) & Diamond (10,000m) Drilling in 2011 • Mi
Slide 35: Potential Upside – Near Mine
Section II – Adamus’ Mining Assets Potential Upside – Near Mine Optimise planning to deliver highest NPV from near mine targets Creating a New Growth Focused West African Gold Producer 35
Slide 36: Potential Upside – Akango (Oxide extensions)
Section II – Adamus’ Mining Assets Potential Upside – Akango (Oxide extensions) Extension drilling required in low lying Salman areas between pits North Teberu Nugget Hill Low lying area Nugget Hill Teberu N 400m Creating a New Growth Focused West African Gold Producer 36
Slide 37: Potential Upside – Avrebo
Section II – Adamus’ Mining Assets Potential Upside – Avrebo Castle Minerals N Akoko South prospect 0.6Mt @ 1.3g/t Au (25,900oz Au) Avrebo Prospect Tenement Boundary Avrebo North Exploration Granite target areas Soil >0.1ppm Au Avrebo Avrebo Volcanics and West 22m @ 4.13g/t Au volcaniclastics 27m @
Slide 38: Potential Upside – Aliva
Section II – Adamus’ Mining Assets Potential Upside – Aliva Granite Dolerite Nfutu Dyke N Anwia 0.58Moz M&I Teleku‐ Exploration Bokazo targets Soil >0.1ppm Au Nkroful Bokrobo 0.12Moz M&I Aliva Prospect Greywacke Diorite 1 km . Drill hole Aliva Phyllite Tenement Boundary Tuffs Creating a New Growth F
Slide 39: Potential Upside – Regional
Section II – Adamus’ Mining Assets Potential Upside – Regional Hotopo Prospect Near mine concessions Newly acquired concessions ‐ additional oxide targets Creating a New Growth Focused West African Gold Producer 39
Slide 40: Potential Upside – Sulphide
Section II – Adamus’ Mining Assets Potential Upside – Sulphide Targeting significant ounce additions at depth Creating a New Growth Focused West African Gold Producer 40
Slide 41: Potential Upside – Sulphide
Section II – Adamus’ Mining Assets Potential Upside – Sulphide Sulphide Potential initial target of 2 – 3 million ounces gold mineral resource Bogoso Bio Oxidisation Plant • Metallurgical Testwork undertaken in 2010 • Sulphide concentrate process Nzema to Bogoso • BIOX treatment process 70 kms by ro
Slide 42: Qualified Person
Section II – Adamus’ Mining Assets Qualified Person Information in this announcement pertaining to Adamus exploration results was compiled by Martin Bennett, an employee of Adamus Resources Limited, who is a Member of the Australasian Institute of Geoscientists and has more than 5 years experience i
Slide 43: Endeavour's Mineral Resources
Section III – Endeavour’s Mineral Resources Resources (including reserves, 0.5g/t lower cutoff) Project Measured Indicated Measured & Indicated Inferred Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Mt Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Youga1 ‐ Total 3.518 2.7 30
Slide 44: Endeavour's Mineral Reserves
Section III – Endeavour’s Mineral Reserves Reserves Project Proven Probable Proven & Probable Gold Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Mt g/t Mt g/t Mt g/t Price Youga1 ‐ Total 2.414 2.8 216,000 2.062 2.2 146,000 4.477 2.5 362,000 US$1000 Attributable ‐ 90% ‐ ‐ 194,400 ‐ ‐ 13
Slide 45: Adamus' Resources & Reserves
Section III – Adamus’ Resources & Reserves Resources (including reserves, 0.8 g/t lower cutoff) 1 Project Measured Indicated Measured & Indicated Inferred Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Mt Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Nzema2 – Total 20.331 1.8
Slide 46: Biographies – Corporate Officers
Section IV – Biographies – Corporate Officers Neil Woodyer – Chief Executive Officer Mr. Woodyer was a founding partner of Endeavour in 1988. He is responsible for implementing the corporation's strategic growth plan and co‐coordinating and directing the entire management and professional team. Mr.
Slide 47: Biographies – Independent Directors
Section IV – Biographies – Independent Directors Michael E. Beckett (Non‐Executive Chairman) Mr. Beckett has some 40 years of experience in the mining sector operating and he has been involved in the development of some of the largest gold mines in the world, in Africa and Papua New Guinea; Iron Ore
Slide 48: Biographies – Independent Directors
Section IV – Biographies – Independent Directors Antony Harwood (Adamus nominee) Dr. Antony Harwood (Tony) is a mining executive with over 27 years of experience who graduated from the University of Wales, Cardiff with a BSc (Hons) (cum laude) and a PhD (Economic Geology). In addition to being a dir