Endeavour Mining Plc · TSX:EDV
Endeavour Mining — Merger or Acquisition (November 2020)
42 slides from Endeavour Mining's merger presentation, Nov 16, 2020
Slide 1: Creation of a New Senior Gold Producer
TSX:EDV TSX:TGZ CREATION OF A NEW SENIOR GOLD PRODUCER November 16, 2020
Slide 2: Disclaimer and Forward Looking Statements
DISCLAIMER AND FORWARD LOOKING STATEMENTS This presentation has been prepared solely for information purposes and for use in connection with the the extent, anticipated; the potential impact on exploration activities; the potential impact of the combination (the “Combination”) of Endeavour Mining Co
Slide 3: Combination Creates a New Senior Gold Producer
COMBINATION CREATES A NEW SENIOR GOLD PRODUCER Compelling industrial and capital markets rationale Compelling Creates a new top 10 Strong re-rating industrial logic senior gold producer potential Production of +1.5Moz per year Attractive valuation relative Enhances strategic position with industry-l
Slide 4: Compelling Industrial Logic
COMPELLING INDUSTRIAL LOGIC Enhances strategic position with ability to leverage Endeavour operating model Top 10 +1.5Moz Global Gold Producer Annual Gold Production1 <$900/oz Diversified across 8 All-in Sustaining Costs2 producing mines in 3 countries 18Moz 33Moz P&P Reserves3 M&I Resources3 Combin
Slide 5: Highly Complementary Assets
HIGHLY COMPLEMENTARY ASSETS Offers potential to realize significant operating and capital synergies SABODALA-MASSAWA WAHGNION MINE, GOLDEN HILL PROJECT, COMPLEX, SENEGAL BURKINA FASO BURKINA FASO › Potential to become Endeavour’s flagship › Further strengthens the overall portfolio › Located within
Slide 6: Creates a High Quality Portfolio
CREATES A HIGH QUALITY PORTFOLIO Diversified across six core mines in three countries Combined Entity Producing Portfolio1 AISC, $/oz Diversified across multiple $1,200 mines and countries $1,150 22% Karma $1,100 Mana +1.5Moz2 $1,050 Production 56% 22% Agbaou $1,000 Sabodala / $950 Wahgnion Massawa
Slide 7: Potential for Significant Synergies
POTENTIAL FOR SIGNIFICANT SYNERGIES Ability to leverage a strong integration platform already in place Houndé Belt, Burkina Faso CORPORATE SYNERGIES › Leverage recent SEMAFO integration Creates a world class mining district for Endeavour with three mines and 2 projects › Team ready to rapidly overla
Slide 8: Creates a Top Senior Gold Producer
CREATES A TOP 10 SENIOR GOLD PRODUCER Ability to meet investment hurdles of larger funds Production for Senior Gold Producers Based on 2021 estimates as per analyst consensus 7Moz 6Moz 5Moz Top 10 Global gold producer 4Moz 3Moz 2Moz 1Moz + 1.5Moz Kinross Polyus Gold Fields Polymetal Newmont Newcrest
Slide 9: Industry-Low Production Costs
INDUSTRY-LOW PRODUCTION COSTS Amongst the lowest AISC within the senior gold producer peer group AISC for Senior Gold Producers Based on 2021 estimates as per analyst consensus $1,300/oz LOW $1,200/oz $1,100/oz COST producer $1,000/oz $900/oz $800/oz $200/oz Kinross <$900 /oz Polyus Polymetal Gold F
Slide 10: Industry-Leading Development Pipeline
INDUSTRY-LEADING DEVELOPMENT PIPELINE Strong exposure across the full mining phases Daoukro Cluster Côte d’Ivoire Siguiri Kofi Trend Guinea Bondoukou Cluster Wahgnion Karma Mali Côte d’Ivoire Nabanga Burkina Faso Fetekro Côte d’Ivoire Houndé Mana Fougadian Mali Mt. Ba/Gueya Barrick JV Côte d’Ivoire
Slide 11: Strong Balance Sheet
STRONG BALANCE SHEET Ability to pay attractive dividends and fund growth INSIGHTS Top Producers Leverage › The combined entity will benefit from a Based on Current Reported Net Debt / LTM EBITDA2 very robust balance sheet with $279m 2.0x of net debt and a net debt/LTM EBITDA ratio of 0.3x on a pro f
Slide 12: Attractive Sustainable Dividend Policy
ATTRACTIVE SUSTAINABLE DIVIDEND POLICY First dividend sets path to sustainable dividend policy from transaction close 2020E Annual Dividend Yields of Top Gold Producers1 Sustainable Dividend 5.9% › The first dividend, declared by Endeavour on November 12, 2020, sets the path to a sustainable dividen
Slide 13: Significant Re-Rating Potential
SIGNIFICANT RE-RATING POTENTIAL Attractive valuation compared to senior gold producer peer group P / NAV EV/ EBITDA 2021E FCF Yield 2021E Harmony 0.7x Harmony 2.2x Harmony 29% Kinross 0.8x Combined Entity 3.3x Combined Entity 19% Combined Entity 0.8x AngloGold 3.5x AngloGold 14% AngloGold 1.0x Gold
Slide 14: Potential to Create Top LSE Premium Listed Gold Producer
POTENTIAL TO CREATE TOP LSE PREMIUM LISTED GOLD PRODUCER Targeting entry into the FTSE-100 Production for London Stock Exchange listed gold producers1 Gold Silver in gold equivalent 3.0Moz Premium Segment Standard Segment AIM TARGETING 2.5Moz FTSE 100 2.0Moz INDEX 1.5Moz 1.0Moz STRONG 0.5Moz INDEX 0
Slide 15: Strong Support from Cornerstone Shareholders
STRONG SUPPORT FROM CORNERSTONE SHAREHOLDERS Backed by shareholders with strong track records in West Africa CORNERSTONE SHAREHOLDERS › The major shareholders of both companies strongly La Mancha support the transaction Tablo + Barrick Gold › Voting support agreements have been received from Teranga
Slide 16: Strong Benefits for Both Sets of Shareholders
STRONG BENEFITS FOR BOTH SETS OF SHAREHOLDERS Significant opportunity to create value BENEFITS FOR ENDEAVOUR SHAREHOLDERS1 BENEFITS FOR BOTH COMPANIES’ SHAREHOLDERS › Increased geographical and operational diversification › Creates a Top 10 global gold producer with +1.5Moz of gold production › Sabo
Slide 17: Our Combined Vision
OUR COMBINED VISION To be a best in class senior gold producer High Quality Portfolio: COMBINED PROFILE - Operational Excellence Create a resilient business - Project Development - Unlocking Exploration Value + 1.5Moz - Portfolio Management Annual production1 Disciplined Capital Allocation: - Balanc
Slide 18: Appendix 1: Transaction Details
APPENDIX 1: TRANSACTION DETAILS
Slide 19: Agreed Terms of Combination
AGREED TERMS OF COMBINATION Both boards have unanimously approved the transaction • Endeavour and Teranga have entered into a definitive agreement whereby Endeavour will acquire all of the issued and outstanding Proposed securities of Teranga by way of a Plan of Arrangement under the Business Corpor
Slide 20: Appendix 2: Asset Portfolio of Combined Entity
APPENDIX 2: ASSET PORTFOLIO OF COMBINED ENTITY
Slide 21: Asset Overview
ASSET OVERVIEW PORTFOLIO OF PRODUCING MINES Diversified across 8 mines MINE RESERVE GOLD M&I M&I RESOURCE AISC1 RESERVES2,3,4 NAME COUNTRY PRODUCTION1 GRADE2,3,4 RESOURCES2,3,4 GRADE2,3,4 ($/oz) (Moz) (koz) (g/t) (Moz) (g/t) Houndé Burkina Faso 240 880 2.86 1.86 4.45 1.85 Ity Côte d’Ivoire 245 653 3
Slide 22: Attractive Pipeline of Growth Projects
ASSET OVERVIEW ATTRACTIVE PIPELINE OF 6 GROWTH PROJECTS Ability to deliver long-term sustainable production at low cost V ENDEAVOUR TERANGA ASSET COUNTRY Fetekro Côte d’Ivoire Kalana Mali Bantou Nabanga Golden Hill Burkina Faso Burkina Faso Burkina Faso Côte d’Ivoire Afema JV 6.5Moz Combined M&I res
Slide 23: Sabodala-Massawa Mine
SABODALA-MASSAWA MINE 225-235koz $875-950/oz 4.8Moz 6.9Moz Senegal 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves2 M&I Resources The recently published PFS highlighted a long The Sabodala-Massawa complex has potential to LOM (17 y
Slide 24: Sabodala-Massawa Mine Ranks amongst Africa's Top Mines
ASSET OVERVIEW SABODALA-MASSAWA MINE Ranks amongst Africa’s top mines AISC, $/oz SABODALA-MASSAWA Top Tier African Gold Mines(1)(2)(3)(4) $1,150 Ahafo (Newmont)(7) $1,050 384koz Loulo Sabodala / 2021-2025 Average Production (Barrick) Massawa (2020E) $950 Sukari Kibali (Centamin) (Barrick/AngloGold)
Slide 25: Sabodala-Massawa: Significant Growth Built In
ASSET OVERVIEW SABODALA-MASSAWA: SIGNIFICANT GROWTH BUILT IN Phased development plan to incorporate high grade Massawa deposits Sabodala-Massawa LOM Production and AISC (koz)(1) Sabodala Whole Leach Ore Massawa Whole Leach Ore Massawa Refractory Ore AISC Phase 1 Phase 2 400 400 400 400 LOM Productio
Slide 26: Sabodala-Massawa, Senegal: Significant Exploration Upside
ASSET OVERVIEW SABODALA-MASSAWA, SENEGAL Significant exploration upside potential Ongoing Resources and Reserves Confirmatory Drilling Program › Initial exploration program at Massawa launched by Teranga in March 2020 with $10M budgeted for 2020 › During Q3 2020 completed 226 drill holes (> 15,000 m
Slide 27: Sabodala-Massawa, Senegal: Leveraging Project Delivery Expertise
ASSET OVERVIEW SABODALA-MASSAWA, SENEGAL Timely opportunity to leverage Endeavour’s successful project delivery expertise Area of Focus Optimization and Upside Opportunities ✓ Pit shell optimization at both Massawa and Sabodala deposits Mineral ✓ Early exploration efforts to test high grade undergro
Slide 28: Wahgnion Mine
WAHGNION MINE 150-165koz $900-1,000/oz 1.1Moz 1.7Moz Burkina Faso 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves M&I Resources Karma Mine Since commercial production was achieved, The newly developed Wahgnion mine offers generativ
Slide 29: Wahgnion Mine: Immediate Cash Flow Generation
ASSET OVERVIEW WAHGNION MINE Immediate cash flow generation with significant optimization opportunities Production and AISC Profile1,2,3 (koz and $/oz) 182 158 149 138 $950 $1,007 $870 $920 Since Start-Up 2020E 2021-2025 LOM Average (Q4'19-Q3'20) Average Optimization Opportunities › Still largely un
Slide 30: Ity Mine
ITY MINE 230-250koz $630-675/oz 3.3Moz 4.1Moz CÔTE D’IVOIRE 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves 1 M&I Resources1 The Ity mine is one of Endeavour’s cornerstone assets, it has the longest operating history of any gold mi
Slide 31: Agbaou Mine
AGBAOU MINE 115-125koz $940-990/oz 0.3Moz 0.5Moz CÔTE D’IVOIRE 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves M&I Resources The low cost Agbaou mine was built ahead of schedule The plant is able to maintain a sustainable CÔ TE D ’
Slide 32: Houndé Mine
HOUNDÉ MINE 230-250koz $865-895/oz 2.9Moz 4.4Moz Burkina Faso 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves1 M&I Resources1 The goal is to delineate sufficient additional Karma Mine The Houndé mine is one of Endeavour’s cornersto
Slide 33: Mana Mine
MANA MINE 185-205koz $1,050-1,120/oz 1.4Moz 4.1Moz Burkina Faso 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves M&I Resources Karma Mine The Mana mine is located in the northern part of the B U R KI N A F A S O highly prospective H
Slide 34: Boungou Mine
BOUNGOU MINE 130-150koz $680-725/oz 1.1Moz 1.7Moz Burkina Faso 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves M&I Resources Karma Mine The mine was placed on temporary care and maintenance in November 2019 in order to address The
Slide 35: Karma Mine
KARMA MINE 100-110koz $980-1,050/oz 0.3Moz 2.0Moz Burkina Faso 2020 Target 2020 Target Current as at December 31, 2019 Current as at December 31, 2019 Production AISC P&P Reserves M&I Resources Karma Mine The Karma mine is a low-grade heap leach operation and In 2017, an optimization project was B U
Slide 36: Golden Hill Project
ASSET OVERVIEW GOLDEN HILL PROJECT Expanded presence in the Houndé Belt to benefit from existing infrastructure GOLDEN HILL PROJECT › Advanced-stage exploration project on the Houndé Belt within trucking distance (25-30km) from Endeavour’s Houndé mine › Potential for development as a satellite depos
Slide 37: Appendix 3: Other
APPENDIX 3: OTHER BV 4 4 2. VY 4 eee “SE ENDEAVOUR MINING
Slide 38: Attractive Mining Friendly Jurisdictions
APPENDIX ATTRACTIVE MINING FRIENDLY JURISDICTIONS › Regional economic zone called the West African Economic and Monetary Union (UEMOA) which is similar to the European Union: Population: 15.7M 2018 GDP: $23B Unemployment: 6.7% 2018 GDP growth: 6.4% ‒ Established with the Treaty signed in Dakar in 19
Slide 39: Pro Forma Snapshot
APPENDIX PRO FORMA SNAPSHOT Endeavour Teranga Pro Forma Market Capitalization (FDITM) $M 3,833 1,860 5,8935 % shareholding in Combined Entity % ~66% ~34% - Cash and equivalents (Sep 30, 2020) $M 523 791 8031 Debt (Sep 30, 2020) $M 698 3841 1,082 Net Debt (Sep 30, 2020) $M 175 3041 2791 EBITDA LTM (S
Slide 40: Benefit of Comprehensive Refinancing
APPENDIX BENEFIT OF COMPREHENSIVE REFINANCING Simplified and optimized capital structure › Endeavour has arranged an up-to $800 million fully-committed debt refinancing package on a certain funds basis (the “Refinancing”). Citi, HSBC Bank Canada, and ING Bank N.V. have fully underwritten the Refinan
Slide 41: Pro Forma Net Debt and Liquidity
APPENDIX PRO FORMA NET DEBT AND LIQUIDITY Net debt & liquidity calculation Return On Capital Employed (ROCE) Net debt EDV TGZ 30/09/20 EBITDA and EBIT Based on Q3 2020A Endeavour Teranga Pro forma Pro forma annualized figures Mining US$ million US$ million Cash & Cash Eq. 523 791 602 Adjusted EBITDA
Slide 42: Consensus Estimates and Illustrative Accretion / Dilution
APPENDIX CONSENSUS ESTIMATES AND ILLUSTRATIVE ACCRETION / DILUTION Pro Forma Accretion Endeavour Teranga Street Consensus (ex. synergies) /Dilution Operating Metrics Production 2021E koz 1,126 494 1,620 Production 2022E koz 1,063 474 1,537 Production 2023E koz 912 549 1,461 AISC 2021E $/oz 898 783 8
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