Endeavour Mining Plc · TSX:EDV
Endeavour Mining — Q3 2016 Earnings Presentation
34 slides from Endeavour Mining's earnings presentation, Oct 31, 2016
Slide 1: Q3-2016 Results
CREATING A PREMIER AFRICAN GOLD PRODUCER Q3-2016 Results October 31st, 2016 0
Slide 2: Disclaimer & Forward Looking Statements
Disclaimer & Forward Looking Statements Cash cost per ounce and all-in sustaining cash cost per ounce are non-GAAP market prices of mining consumables, possible variations in ore reserves, performance measures with no standard meaning under IFRS. This grade or recovery rates; failure of plant, equip
Slide 3: Table of Content and Speakers
Q3-2016 Results Table of Content Speakers: 1. Operational and Financial Summary Sébastien de Montessus Chief Executive Officer, President & Director 2. Details by Mine and Project Adriaan "Attie" Roux Chief Operating Officer 3. Appendix Ota Hally Chief Financial Officer Vincent Benoit EVP – Strategy
Slide 4: Operational and Financial Summary
CREATING A PREMIER AFRICAN GOLD PRODUCER Operational and Financial Summary 3
Slide 5: Group level performance in line with full year guidance
Group level performance in line with full year guidance First 9 months 2016 Q3- 2016 Comment of 2016 Guidance Q3: +6% over Q2-2016 Production (incl Karma) 146koz 416koz 575 - 610koz Growth acceleration expected in Q4 Production on track to be within guidance Continued decrease achieved in Q3
Slide 6: Production increased in Q3 with larger lift expected in Q4
Production increased in Q3 with larger lift expected in Q4 Group Production From Continuing Operations, koz Production by Mine, koz Q4 Trend (including Karma) 52 49 +36% 46 43 42 146koz 39 39 138koz 37 122koz 123koz 108koz 23 24 22 21 20 20 19 20 15 12 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 7: Continued AISC reduction to low-end of guidance
Continued AISC reduction to low-end of guidance Continued AISC reduction, US$/oz AISC by mine, US$/oz Q4 Trend 1,137 1,266 1,158 1,133 1,136 1,119 1,071 All-in Sustaining Costs, US$/oz 1,071 1,161 1,010 946 934 775 Guidance 710 724 898 908 901 898 890 889 920 621 537 525 525 550 870 826 Cash Cost, U
Slide 8: Cash flow generation is on-track to meet guidance
Cash flow generation is on-track to meet guidance First 9 months ended 2016 2015 Free Cash Flow: +40% YTD vs 2015, (All amounts exclude Youga unless otherwise indicated) US$m US$/oz US$m US$/oz excluding the net positive impact of Karma which will start its commercial Gold sold, koz 376 327 produc
Slide 9: Net Free Cash Flow Breakdown
Net Free Cash Flow Breakdown First 9 months ended US$m 2016 2015 Insights: Free cash flow (before Hounde, Karma, working capital, tax & financing 1. Houndé spend fully on track with capex 100 72 costs) program Hounde project costs 1 (45) (5) Karma proceeds from sales less mining costs capitalized an
Slide 10: Adjusted Net Earnings Breakdown
Adjusted Net Earnings Breakdown Insights: Nine months ended (US$m) 30-Sep-16 30-Sep-15 1. Youga results are removed due to Total net earnings 17 57 disposal of the mine Youga discontinued operations 1 3 (9) 2. Legacy gold hedge caused losses Loss (gain) on financial instruments 2 20 (3) due to incre
Slide 11: Continued Reduction in Net Debt
Continued Reduction in Net Debt Liquidity and Financing Sources Significant reduction in Net Debt since the Strong liquidity and financing sources to fund beginning of the year remaining Houndé capex spend of roughly $270m ‒ $65m cash injection received from La Mancha in May following the True Gol
Slide 12: Details by Mine and Project
CREATING A PREMIER AFRICAN GOLD PRODUCER Details by Mine and Project 11
Slide 13: Agbaou Mine – Côte d'Ivoire
Agbaou Mine – Côte d’Ivoire Q3-2016 Insights Production and AISC • Production increased over the previous Production, koz AISC, US$/oz quarter despite the negative impact of the +12% rainy season 52koz 49koz 44koz 46koz • Higher gold grades and gold-in-circuit 43koz balance optimization compensated
Slide 14: Agbaou Exploration
Agbaou Exploration • In 2016, exploration is focused on Agbaou Site Map the North pit and South pit extensions, the Agbaou South target, and on generating targets beyond the current resource boundaries • Drilling based on previous geophysics surveys and soil geochemistry results commenced in April 2
Slide 15: Tabakoto Mine – Mali
Tabakoto Mine – Mali Q3-2016 Insights Production and AISC • Improved mine performance with ~10% Production, koz AISC, US$/oz increase in ore tonnage extracted (for both open pit and underground) +2% 42koz 39koz 39koz ‒ First time mine extraction over- 36koz 37koz performs mill throughput in over a y
Slide 16: Tabakoto Mine – Exploration
Tabakoto Mine – Exploration Tabakoto Site Map • On the open-pit targets, a total of 72,900m of drilling (both RC and DD) and 1,311 Auger holes have been completed since the start of the year • The underground exploration programmes are ongoing with 22,400 metres of DD drilled so far this year at Tab
Slide 17: Ity Mine – Côte d'Ivoire
Ity Mine – Côte d’Ivoire Q3-2016 Insights Production and AISC • As guided, production decreased due to Production, koz AISC, US$/oz the impact of the rainy season: 22koz 21koz ‒ Lower Stacked Tonnage 19koz 17koz ‒ Decreased grades due to processed 15koz lower grade stockpiles during rainy season $77
Slide 18: Ity Mine – Exploration
Ity Mine – Exploration • 44,000m have been drilled since Ity Site Map the beginning of the year • 2 discoveries announced in recent weeks ‒ Bakatouo: significant high- grade discovery ‒ Colline Sud: potential heap leach satellite deposit • A large 21,400m auger drilling program was completed and suc
Slide 19: Ity Mine – Exploration: High-grade Bakatouo discovery cont.
Ity Mine – Exploration: High-grade Bakatouo discovery cont. • Mineralization is very close to surface and occurs over 800m along strike and 250m across strike, while the extensions remain open at depth and along strike • An additional drilling campaign is expected to commence in November on Bakatouo
Slide 20: Ity Mine – Exploration: Colline Sud Discovery
Ity Mine – Exploration: Colline Sud Discovery • Discovery situated 2.5 kilometers from the current processing plant, Colline Sud is a historical gold in soil anomaly • Close-to-surface occurrence in two distinct areas referred to as the South East and North West sectors, with respective strike lengt
Slide 21: Ity Mine – Exploration: 80km underexplored Birimian corridor
Ity Mine – Exploration 80km underexplored Birimian corridor Ity Mine Birimian corridor • Endeavour consolidated an 80km underexplored Birimian corridor on- trend with its Ity mine in Côte d’Ivoire • Significantly increased its holdings in the Ity district from 178km² to 664km2. • The new Floleu (104
Slide 22: Nzema Mine – Ghana
Nzema Mine – Ghana Q3-2016 Insights Production and AISC • Improving production and AISC profile due to: Production, koz AISC, US$/oz – Continued ramp-up of purchased ore at 27koz better grades from more suppliers 23koz 24koz 20koz 20koz – Better grades from Adamus pit, ahead of cut-back completion –
Slide 23: Karma Update
Karma Update Production and Cash Cost Q3-2016 Insights Production, koz Total Cash Cost, US$/oz Commercial production declared as at October 1st 2016 7,381oz 6,854oz Production continued to ramp-up in Q3, currently at 6,026oz 6,174oz annual run-rate of roughly 90koz $812 Lower production costs
Slide 24: Karma - Exploration
Karma - Exploration • Target: +10 year mine life Karma Site Map by year end • 60,000m program at Kao North started in July, with the aim of extending mine life by +2.5 years • Program expected to be completed in Q4-2016 CREATING A PREMIER AFRICAN GOLD PRODUCER 23
Slide 25: Houndé Construction is progressing on-time and on-budget
Houndé Construction is progressing on-time and on-budget Significant achievements to date: Procurement is approximately 60% complete Procurement is approximately 60% complete (excluding contingency) and construction is 22% complete overall $328m Full back-up power station has been tendered with
Slide 26: Houndé Construction
Houndé Construction Reagents Storage Shed A (1 of 3) Resettlement Construction Site Water Services Area – Ring Beams Crusher Vault – Wing Walls CREATING A PREMIER AFRICAN GOLD PRODUCER 25
Slide 27: Conclusion
CREATING A PREMIER AFRICAN GOLD PRODUCER Conclusion 26
Slide 28: Upcoming Events and Catalysts
Upcoming Events and Catalysts OPERATING Q4 is expected to be the year’s strongest OUTLOOK operational and financial performance Maiden Resource at Bakatouo and Colline Sud discoveries at Ity mine in Q4 PROJECT DEVELOPMENT Exploration strategic review expected in Q4 Updates from on-going expl
Slide 29: Appendix
CREATING A PREMIER AFRICAN GOLD PRODUCER Appendix 28
Slide 30: Production and Cost Details by Mine
Production and Cost Details by Mine On a quarterly basis Agbaou Nzema Tabakoto Ity (on a 100% basis) Unit Q3-2016 Q2-2016 Q3-2015 Q3-2016 Q2-2016 Q3-2015 Q3-2016 Q2-2016 Q3 2015 Q3-2016 Q2 2016 Physicals Total tonnes mined – OP1 000t 6,877 5,918 5,037 2,848 1,852 1,323 1,569 1,704 2,129 948 1,584 To
Slide 31: Production and Cost Details by Mine
Production and Cost Details by Mine For the 9 months period ended 2016 and 2015 Agbaou Nzema Tabakoto Ity3 (on a 100% basis) Unit 9-months 2016 9-months 2015 9-months 2016 9-months 2015 9-months 2016 9-months 2015 9-months 2016 Physicals Total tonnes mined – OP1 000t 18,864 15,331 6,410 6,707 5,505
Slide 32: Balance Sheet
Balance Sheet September 30, December 31, 2016 2015 ASSETS Current Cash $ 137,094 109,519 Cash - restricted 5,222 4,824 Trade and other receivables 13,844 13,045 Income taxes receivable 148 2,945 Inventories (Note 5) 85,776 93,939 Prepaid expenses and other 36,885 12,640 278,969 236,912 Mining intere
Slide 33: P&L
P&L Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Revenues Gold revenue $ 169,313 $ 121,826 $$ 473,644 - $ 385,073 Cost of sales Operating expenses 87,856 76,265 259,337 229,151 Depreciation and depletion 21,607 19,057 69,612 53,923 Royalties 8,206 6,009 22,025
Slide 34: Cash Flow Statement
Cash Flow Statement Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Operating Activities Earnings before taxes (Note 16 (a)) $ 31,255 $ 8,593 $ 26,962 $ 55,759 Adjustments for: Depreciation and depletion 21,607 20,552 70,871 58,210 Unwinding of reclamation obliga