Endeavour Mining Plc · TSX:EDV
Endeavour Mining — FY2021 Earnings Presentation
62 slides from Endeavour Mining's earnings presentation, Mar 17, 2022
Slide 1: FY & Q4-2021 Operational & Financial Results Presentation
FY & Q4-2021 OPERATIONAL & FINANCIAL RESULTS Presentation 17 March 2022
Slide 2: Disclaimer & Forward Looking Statements
DISCLAIMER & FORWARD LOOKING STATEMENTS Some of the indicators used by Endeavour in this presentation represent non-IFRS financial actual results of current exploration activities; production and cost of sales forecasts for Endeavour measures, including sustaining capital per ounce, non-sustaining c
Slide 3: Speakers
SPEAKERS SÉBASTIEN DE MARK JOANNA PATRICK MARTINO MONTESSUS MORCOMBE PEARSON BOUISSET DE CICCIO President and CEO COO CFO EVP Exploration VP, Strategy and and Growth Investor Relations
Slide 4: Table of Contents
TABLE OF CONTENTS 1 FY-2021 HIGHLIGHTS 2 Q4-2021 FINANCIAL RESULTS 3 OPERATING PERFORMANCE BY MINE 4 CONCLUSION 5 APPENDIX
Slide 5: FY-2021 Highlights
01 SECTION 1 FY-2021 HIGHLIGHTS
Slide 6: 2021 Achievements
2021 ACHIEVEMENTS Strong success across the business STRONG OPERATIONAL HEALTHY ATTRACTIVE SHAREHOLDER PERFORMANCE FINANCIAL POSITION RETURNS 9 consecutive years of Net cash position $278m declared achieving or beating guidance achieved by year-end vs. minimum commitment of $125m ROBUST ESG LSE PREM
Slide 7: Operational & Financial Highlights
OPERATIONAL & FINANCIAL HIGHLIGHTS Strong increase following integration of Teranga and SEMAFO assets QUARTER ENDED TWELVE MONTHS ENDED Dec. 31, Sep. 30 Dec. 31, Dec. 31, Dec. 31, Var. FY-21 2021 2021 2020 2021 2020 vs. FY-20 1.5Moz (in $ million unless otherwise stated) PRODUCTION, SALES AND AISC H
Slide 8: Beat 2021 Production Guidance
BEAT 2021 PRODUCTION GUIDANCE 9 consecutive years of achieving or beating guidance 0.20 GROUP SAFETY FY INDUSTRY LTIFR1 LEADING 1.08 Industry Average2 1,536koz GROUP 2021 BEAT FY PRODUCTION TOP END 1,365-1,495koz Guidance $885/oz GROUP 2021 $850/oz $900/oz WITHIN AISC FY GUIDANCE RANGE Guidance (1)
Slide 9: Annual Production and AISC
ANNUAL PRODUCTION AND AISC Diversified asset base with AISC below $900/oz Production and AISC from all operations Production AISC Realized Gold Price +628koz 1,536koz Production FY-2021 vs. FY-2020 908koz 2021 Production Breakdown Wahgnion Sabodala-Massawa 727koz Mana 663koz $873/oz $885/oz 651koz $
Slide 10: Strong Cash Generation
STRONG CASH GENERATION Provides ability to fund capital allocation priorities Operating Cash Flow and CAPEX Operating Cash Flow Capital Expenditures1 Realized Gold Price INVESTMENT PHASE CASH FLOW PHASE +$ 426m Operating CF FY-2021 vs. FY-2020 $1,175m $749m +57% $223m $251m $302m $233m $237m $440m $
Slide 11: Evolution of Capital Allocation Priorities
EVOLUTION OF CAPITAL ALLOCATION PRIORITIES Resilient business capable of funding growth and rewarding stakeholders DEBT REDUCTION CAPACITY TO FUND INVESTMENT PHASE ORGANIC GROWTH AND Key Focus PHASE $278m REWARD SHAREHOLDERS 2016 – 2019 (total) 2020 2021 Buybacks $138m Shareholder returns declared f
Slide 12: Balance Sheet Strength
BALANCE SHEET STRENGTH Strong cash generation supports growth and shareholder returns Net Debt reduction (Net Debt)/ Net Cash Net Debt / Adj. EBITDA (LTM) $76m INVESTMENT DEBT REDUCTION SHAREHOLDER RETURNS PHASE PHASE WITH ABILITY TO FUND GROWTH Net cash position $75m $76m ($77m) ($70m) ($175m) ($16
Slide 13: Attractive Shareholder Returns Programme
ATTRACTIVE SHAREHOLDER RETURNS PROGRAMME Minimum progressive dividend provides visibility during growth phase SHAREHOLDER RETURNS POLICY Cumulative Shareholder Returns Programme › Endeavour implemented a shareholder returns Minimum dividend Supplemental shareholder returns programme that is composed
Slide 14: Attractive Shareholder Returns Programme
ATTRACTIVE SHAREHOLDER RETURNS PROGRAMME Returning significant value to shareholders FY-2021 shareholder returns declared Shareholder returns in context of FY-2021 results PRODUCTION REVENUE $180/oz Minimum returned for every ounce 10% of revenue Dividend of gold produced distributed Buyback $138m $
Slide 15: Robust Return on Capital Employed
ROBUST RETURN ON CAPITAL EMPLOYED Significant improvement following build of our Ity and Houndé mines Return on Capital Employed (ROCE)1 20% 18% 2% Decrease in ROCE FY-2021 vs FY-2020 10% 6% 6% +20% ROCE target with strong capital allocation discipline 2017 2018 2019 2020 2021 (1) EBIT (Adjusted EBI
Slide 16: Return on Capital Employed
RETURN ON CAPITAL EMPLOYED Expected to improve ROCE with exploration and optimization of acquired assets Return on Capital Employed High ROCE for legacy assets following Expected to increase ROCE on acquired by asset build and exploration success assets with exploration and optimization ITY MANA BOU
Slide 17: Key Growth Projects
4 KEY 44 GROWTH PROJECTS Sabodala-Massawa expansion underway; progressing DFS on greenfield projects BROWNFIELD PROJECT: GREENFIELD PROJECT: GREENFIELD PROJECT: SABODALA-MASSAWA EXPANSION LAFIGUÉ ON FETEKRO PROPERTY KALANA PHASE 1 INSIGHTS: PFS INSIGHTS: PFS INSIGHTS: ▪ Debottlenecking the plant bac
Slide 18: Continued Strong Exploration Focus
CONTINUED STRONG EXPLORATION FOCUS $80 million budget for 2022 with strong focus on new assets 2021 Exploration Spend Ity Wahgnion 11% 15% Mana 10% KOFI Sabodala-Massawa LIPTAKO 16% $90m Hounde 9% spent LIGUIDI Boungou SIGUIRI 9% NABANGA Greenfields and other 30% BANTOU BARRICK JV 2022 Exploration B
Slide 19: Strong Exploration Track Record
STRONG EXPLORATION TRACK RECORD Achieved 5-year discovery target of 10-15Moz Total Indicated discoveries and targets Indicated resources discovered Exploration spend 3.0Moz 11.5Moz Discovered 11.5Moz Discovered from mid-2016 to 2021 2.2Moz 2.1Moz 1.9Moz 1.0Moz 1.3Moz <$ 25/oz Discovery cost H2-2016
Slide 20: 5 Year Exploration Outlook
5 YEAR EXPLORATION OUTLOOK Targeting discovery of more than 2x production depletion over 2021-2025 period 5-year resource discovery target Risked mean Indicated resource discovery target (2021 - 2025) M&I resource as at 31 December, 2020 15-20Moz $/oz Target discovery cost $26/oz $19/oz $17/oz $30/o
Slide 21: Largest LSE Premium Listed Pure Gold Company
LARGEST LSE PREMIUM LISTED PURE GOLD COMPANY The largest pure gold producer listed on the premium segment of the LSE INSIGHTS Production for London Stock Exchange listed gold producers1 › Liquidity continues to increase in the Gold Silver in gold equivalent UK with 24% of our free float shares now h
Slide 22: Q4-2021 Financial Results
02 SECTION 2 Q4-2021 FINANCIAL RESULTS
Slide 23: Quarterly Production and AISC
QUARTERLY PRODUCTION AND AISC Strong finish to FY-2021 due to robust Q4-2021 results Production and AISC1 Production AISC All-in sustaining margin 409koz 398koz +16koz 382koz Production Q4-2021 vs. Q3-2021 347koz 344koz $915/oz $904/oz +1% $868/oz $853/oz $803/oz AISC $1,038/oz $881/oz $938/oz $859/
Slide 24: Quarterly Operating Cash Flow
QUARTERLY OPERATING CASH FLOW $1.2 billion in operating cash flow during 2021 Operating cash flow from continuing operations Realized Gold Price $364m $300m $312m $356m +$ 44m Operating CF Q4-2021 vs. Q3-2021 $198m +14% Operating CF $1,841/oz $1,749/oz $1,791/oz $1,763/oz $1,787/oz Q4-2021 vs. Q3-20
Slide 25: Operating Cash Flow
OPERATING CASH FLOW Strong increase following recovery of working capital Operating cash flow from continuing operations bridge INSIGHTS 1. The realised gold price increased by 5 $356m $24/oz from $1,763/oz in Q3-2021 to $1,787/oz in Q4-2021 2. Gold sold decreased by 2koz from 392koz in Q3-2021 to 3
Slide 26: Change in Net Debt
CHANGE IN NET DEBT Switched from Net Debt to net cash position during the quarter Cash variation analysis INSIGHTS Net Debt / Adj. EBITDA (LTM) › Q4-2021 operating activities included $316m in operating cashflow before changes in working capital and a $40m change in working capital ($132m) › Q4-2021
Slide 27: Debt Structure
DEBT STRUCTURE Refinanced to provide a low cost, long-term debt structure REFINANCING INSIGHTS: Balance Sheet Structure › On 14 October 2021, the Company completed an offering of fixed (in $ million unless stated otherwise) 31 Dec 2021 30 Sep 2021 31 Dec 2020 rate senior notes due in 2026 and an uns
Slide 28: Net Earnings
NET EARNINGS Adjusted EPS remained fairly flat over Q3-2021 3 MONTHS ENDED INSIGHTS 1. The corporate costs are seasonally high due to the 31 December, 30 September, (in $ million) A = Adjustments made for Adjusted Net Earnings integration of SEMAFO and Teranga head office 2021 2021 costs as well as
Slide 29: Operating Performance by Mine
03 SECTION 3 OPERATING PERFORMANCE BY MINE
Slide 30: Production Bridge
PRODUCTION BRIDGE Beat FY-2021 production guidance Production bridge FY-2020 to FY-2021 1,536koz AISC: 1,365- 147koz 1,495koz $885/oz AISC: $850 - 345koz 900/oz 84koz 908koz 80koz Integration of Teranga AISC: (93koz) 16koz 59koz acquired assets (10koz) $873/oz Full year consolidation of Divested Str
Slide 31: Reserve and Resource Evolution
RESERVE AND RESOURCE EVOLUTION Resource to reserve conversion of new discoveries is underway P&P reserve bridge1 +0.1Moz +0.2Moz 17.9Moz 17.8Moz +0.5Moz Flat (0.3Moz) (0.1Moz) 0.0Moz (0.4Moz) (0.3Moz) P&P reserves FY-2021 vs FY-2020 2020-end Houndé Ity Boungou Mana Sabodala- Wahgnion Lafigué Other 2
Slide 32: Sabodala-Massawa, Senegal
SABODALA-MASSAWA, SENEGAL Over 200koz produced in H2-2021 Q4-2021 vs Q3-2021 INSIGHTS › Production remained flat despite the increase in processed grade as gold in circuit increased while plant throughput and plant recovery remained consistent. › AISC decreased due to a decrease in sustaining capita
Slide 33: Sabodala-Massawa, Senegal
SABODALA-MASSAWA, SENEGAL Phase 1 plant expansion completed, Phase 2 DFS expected in Q1-2022 PHASE 1 INSIGHTS Phase 2 expansion schematic plan › Phase 1 of the plant expansion facilitates the processing of an increased proportion of high grade, free-milling Massawa ore through the Sabodala processin
Slide 34: Houndé Mine, Burkina Faso
HOUNDÉ MINE, BURKINA FASO Record performance in FY-2021 Q4-2021 vs Q3-2021 INSIGHTS Production and AISC Production, koz AISC, US$/oz › Production increased due to the higher recovery rates as well as the increased mill tonnage despite the lower grade milled. 101koz › AISC decreased due to lower sust
Slide 35: Ity Mine, Côte d'Ivoire
ITY MINE, CÔTE D’IVOIRE Production remained flat over the prior quarter Q4-2021 vs Q3-2021 INSIGHTS Production and AISC › Production remained consistent with the prior quarter as Production, koz AISC, US$/oz higher mill throughput was offset by lower recovery rates, 79koz while grades processed rema
Slide 36: Boungou, Burkina Faso
BOUNGOU, BURKINA FASO Continued focus on waste stripping at East pit in Q4-2021 Q4-2021 vs Q3-2021 INSIGHTS Production and AISC Production, koz AISC, US$/oz › Production decreased due to a lower mined and processed grade while throughput and recovery rate remained fairly flat. 64koz › AISC increased
Slide 37: Mana, Burkina Faso
MANA, BURKINA FASO Wona underground development being expedited Q4-2021 vs Q3-2021 INSIGHTS Production and AISC › Production increased due to higher processed grade and Production, koz AISC, US$/oz plant recovery rates, which was partially offset by a slight decrease in plant throughput. 61koz › AIS
Slide 38: Wahgnion, Burkina Faso
WAHGNION, BURKINA FASO Higher production over Q3-2021 due to higher throughput and grades Q4-2021 vs Q3-2021 INSIGHTS › Production increased due to increased plant throughput and higher processed grade while the plant recovery rate remained stable. › AISC decreased due to lower sustaining capital as
Slide 39: Karma Mine, Burkina Faso
KARMA MINE, BURKINA FASO Non-core mine was divested in March 2022 Q4-2021 vs Q3-2021 INSIGHTS Production and AISC Production, koz AISC, US$/oz › Production remained flat despite the improved average grade and recovery rates as the stacking rate slightly decreased and 28koz gold in circuit increased
Slide 40: Conclusion
04 SECTION 4 CONCLUSION
Slide 41: Key Priorities Across the Business
KEY PRIORITIES ACROSS THE BUSINESS Continuing to build a resilient business with disciplined capital allocation 2022 production guidance of 1,315 – 1,400koz OUR STRATEGY OPERATIONS at an AISC of $880 - $930/oz SHAREHOLDER Minimum dividend of $150m with potential to MAINTAINING A RETURNS supplement r
Slide 42: Appendix
05 SECTION 5 APPENDIX
Slide 43: Sabodala-Massawa Mine
DISCOVERY TARGET (2021-2025) SABODALA-MASSAWA MINE Senegal 2.3 - 2.7Moz $26/oz Indicated resources Discovery cost M&I RESOURCES as at Dec 31, 2021 110.1Mt at 1.94g/t au containing 6.88Moz NEAR-TERM FOCUS Discovery of additional high-grade non-refractory ore resources. Define new resources on near-mi
Slide 44: Sabodala-Massawa Mine, Senegal
SABODALA-MASSAWA MINE, SENEGAL 2021 exploration efforts delineated 709koz of Indicated resources INSIGHTS Massawa Plan Map › An exploration programme of $13.0 million was planned for 2021, of which $12.5 million was spent comprised of 100,000 meters across 929 drillholes. › During 2021, exploration
Slide 45: Houndé Mine
DISCOVERY TARGET (2021-2025) HOUNDÉ MINE Burkina Faso 3.0 – 4.0Moz $19/oz Indicated resources Discovery cost M&I RESOURCES as at Dec 31, 2021 103.9Mt at 1.55g/t au containing 5.16Moz NEAR-TERM FOCUS Focused on maintaining +10-year mine life by targeting near mill targets such as Kari Area, Dohoun, S
Slide 46: Houndé Mine, Burkina Faso
HOUNDÉ MINE, BURKINA FASO 2021 exploration efforts delineated 889koz of Indicated resources INSIGHTS Houndé plan map highlighting soil geochemical anomalies › An exploration programme of $7.0 million was initially planned for 2021, however given the exploration success during the year, $13.9 million
Slide 47: Ity Mine
DISCOVERY TARGET (2021-2025) ITY MINE Côte D’Ivoire 3.5 – 4.5Moz $17/oz Indicated resources Discovery cost M&I RESOURCES as at Dec 31, 2021 89.5Mt at 1.56g/t au containing 4.48Moz NEAR-TERM FOCUS 2.3Moz discovered since 2016 with +10 year mine life. Focus to maintain and extend mine life through hig
Slide 48: Ity Mine, Côte d'Ivoire
ITY MINE, CÔTE D’IVOIRE 2021 exploration efforts delineated 975koz of Indicated resources INSIGHTS › An exploration programme of $9.0 million was initially planned for 2021, however given the success of the programme, $11.0 million was spent during the year consisting of 72,800 meters across 557 dri
Slide 49: Boungou Mine
DISCOVERY TARGET (2021-2025) BOUNGOU MINE Burkina Faso 1.0 – 1.5Moz $32/oz Indicated resources Discovery cost M&I RESOURCES as at Dec 31, 2021 11.1Mt at 3.85g/t Au containing 1.38Moz NEAR-TERM FOCUS Extend mine life to +10 years through exploration of near mine targets Boungou North, Natougou SW, Na
Slide 50: Boungou Mine, Burkina Faso
BOUNGOU MINE, BURKINA FASO High priority targets within 10km of the mine INSIGHTS Boungou Exploration Map › An exploration programme of $7.0 million was planned for 2021, of which $5.4 million was spent consisting of 25,700 meters of drilling across 280 drillholes. Exploration efforts were focused o
Slide 51: Mana Mine
DISCOVERY TARGET (2021-2025) Bara MANA MINE Burkina Faso 1.0 – 1.5Moz $30/oz Indicated resources Discovery cost M&I RESOURCES as at Dec 31, 2021 37.6Mt at 1.89 g/t Au containing 2.29Moz NEAR-TERM FOCUS Extend mine life to +10 years through exploration of Siou underground, Wona underground as well as
Slide 52: Mana, Burkina Faso
MANA, BURKINA FASO Focus on discovering new oxide potential Mana exploration map INSIGHTS › In exploration programme of $8.0 million was planned for 2021 of which $9.1 million was spent, consisting of 59,600 meters across 459 drillholes. › In 2021, at Maoula the focus was placed on delineating Indic
Slide 53: Wahgnion Mine
DISCOVERY TARGET (2021-2025) WAHGNION MINE Burkina Faso 1.5 – 2.0Moz $25/oz Indicated resources Discovery cost M&I RESOURCES as at Dec 31, 2021 40.7Mt at 1.48g/t Au containing 1.94Moz NEAR-TERM FOCUS Extend mine life to +10 years through discovery of additional satellite deposits within trucking dis
Slide 54: Wahgnion Mine, Burkina Faso
WAHGNION MINE, BURKINA FASO Significant exploration potential exists within the permitted mine license INSIGHTS Nogbele South: Significant Indicated resource potential › An exploration programme of $12.0 million was planned for 2021, of which $8.5 million was spent consisting of over 46,000 meters a
Slide 55: Fetekro Project
DISCOVERY TARGET (2021-2025) FETEKRO PROJECT Côte D’Ivoire 1.5 – 2.0Moz $45/oz Indicated resources Discovery cost M&I RESOURCES as at Dec 31, 2021 44.8Mt at 2.02g/t Au containing 2.92Moz NEAR-TERM FOCUS 2.9Moz have been discovered since 2018 with the aim to further extend the Lafigué resources. Seve
Slide 56: 2022 Guidance
Q4-2021 & FY-2021 RESULTS 2022 GUIDANCE INSIGHTS Consolidated Production Guidance 2022 FULL-YEAR GUIDANCE (All amounts in koz, on a 100% basis) › Total production guidance for 2022 of Ity 255 — 270 1,315 – 1,400koz at an AISC of $880 - $930/oz Houndé 260 — 275 › Guidance is in line with the outlook
Slide 57: 2022 Guidance (Continued)
Q4-2021 & FY-2021 RESULTS 2022 GUIDANCE (Continued) INSIGHTS Sustaining and Non-Sustaining Capital Expenditure Guidance › Sustaining and non-sustaining capital spend is expected to 2022 FULL-YEAR GUIDANCE decrease by approximately $50 million in 2022 compared to (All amounts in US$m) SUSTAINING CAPI
Slide 58: Mine Statistics
Q4-2021 & FY-2021 RESULTS MINE STATISTICS On a quarterly basis (1) Includes waste capitalized. 58
Slide 59: Mine Statistics
Q4-2021 & FY-2021 RESULTS MINE STATISTICS On a full year basis (1) Includes waste capitalized. (2)For the post acquisition period commencing February 10, 2021. 59
Slide 60: Tax Payments
Q4-2021 & FY-2021 RESULTS TAX PAYMENTS THREE MONTHS ENDED YEAR ENDED Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31, In US$ million unless otherwise specified. 2021 2021 2020 2021 2020 Boungou 8.8 9.8 - 52.4 1.4 Houndé 10.7 10.7 3.3 47.9 17.3 Ity 4.8 9.7 - 42.1 24.7 Karma 0.3 0.3 - 1.7 - Mana 2.9 4.3 0
Slide 61: Short Term Revenue Protection Program
Q4-2021 & FY-2021 RESULTS SHORT TERM REVENUE PROTECTION PROGRAM Increased certainty of cash flow to achieve corporate objectives Gold collars INSIGHTS Gold price in US$/oz › Aimed at increasing cash flow certainty 2,100 Growth and shareholder return focus during construction while retaining headroom
Slide 62: Contact Us
@) ENDEAVOUR Lp igntea hp MINING 5 Young Street London a ce United Kingdom T: +44 203 011 2723 CONTACT US T: +44 203 011 2719 OPERATIONS OFFICE investor@endeavourmining.com Hotel Palm Club Follows Croisement Boulevard Latrille et rue du Lycée Technique Abidjan ‘in) y) 08 BP 872 Céte d'Ivoire endeavo