Slide 1: Q2-2016 Results
CREATING A PREMIER AFRICAN GOLD PRODUCER Q2-2016 Results July 28th, 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
Q2-2016 Results Table of Content Speakers: 1. Strategy Overview Sébastien de Montessus Chief Executive Officer, President & Director 2. Operational and Financial Summary Adriaan "Attie" Roux Chief Operating Officer 3. Details by Mine and Project Ota Hally 4. Outlook and Updated Guidance Chief Financ
Slide 4: Section 1: Strategy Overview
CREATING A PREMIER AFRICAN GOLD PRODUCER Section 1: Strategy Overview 3
Slide 5: Building A Premier African Gold Producer
Building A Premier African Gold Producer Current Gold Production Profile (100%) and AISC (Mine-Level, US$/oz) 1,000 $1,2 $1,137 +900koz Strategic Objective 900 $1,1 800 for 2018-2020 700 $1,010 $1,0 $922 + 900 koz 600 500 462koz 517koz $90 YEARLY PRODUCTION 400 $800 $80 317koz 300 $70 < 800$/oz 200
Slide 6: 6 transformational levers to execute the plan
Building A Premier African Gold Producer 6 transformational levers to execute the plan 1 OPERATIONAL EXCELLENCE 4 IMPROVE MANAGEMENT & GOVERNANCE MODEL 2 PROJECT DEVELOPMENT 5 PRO-ACTIVE PORTFOLIO MANAGEMENT 3 UNLOCK EXPLORATION VALUE 6 HEALTHY FINANCIAL STRUCTURE CREATING A PREMIER AFRICAN GOLD PRO
Slide 7: Safety First Lean Operations
Management Style 1 Safety First 5 2 Anticipate for Lean Greater Operations Agility 4 3 Management Cash Focus Hands-On CREATING A PREMIER AFRICAN GOLD PRODUCER 6
Slide 8: Key Value Drivers H1-2016 Achievements
Scorecard of value drivers Key Value Drivers H1-2016 Achievements Deleverage Balance Sheet • US$230m additional equity • Net Cash positon of US$21m after July bought deal close Extend • Exploration now an integral part of the strategy On- • Long-term exploration program nearing approval Mine Lives
Slide 9: Market Re-rating has started
Market Re-rating has started 30 Endeavour Share Price S&P TSX Global Gold Index Added to the S&P/TSX Composite index and the GDX Bought Deal ETF underlying index announced 25 EDV: Rebased to Endeavour Share Price, C$ True Gold +200% acquisition closed 20 Houndé construction launch announced Gold Ind
Slide 10: Section 2: Operational and Financial Summary
CREATING A PREMIER AFRICAN GOLD PRODUCER Section 2: Operational and Financial Summary 9
Slide 11: H1-2016 group level performance in line with full year guidance
H1-2016 group level performance in line with full year guidance H1-2016 Initial 2016 Revised 2016 Comment Actual Guidance Guidance Initial guidance confirmed thanks to 270koz Agbaou’s strong performance 1 Production (incl. 12 koz for Karma) 535-560koz 575 - 610koz Increasing guidance with the ad
Slide 12: Initial production guidance remains on-track
1 Initial production guidance remains on-track with improvements expected in H2-2016 Group Production from continuing operations, koz Production by mine, koz H2 Trend 46 43 138koz 39 39 122koz 123koz Karma:12 113koz 108koz 106koz 22 21 20 20 126 12 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1-15 Q2-15 Q3-15 Q4-
Slide 13: Continued AISC reduction
2 Continued AISC reduction Continued AISC reduction, US$/oz AISC by mine, US$/oz H2 Trend 1,137 1,266 All-in Sustaining Costs, US$/oz 1,158 1,071 1,062 1,010 946 934 898 908 901 775 890 889 920 710 870 826 525 525 Cash Cost, US$/oz 732 740 710 698 690 674 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 FY2013 FY2014 Q1-15
Slide 14: Cash Flow generation is on track to meet initial guidance
Cash Flow generation is on track to meet initial guidance 3 with increased production expected in H2 and AISC in-line On track to meet initial guidance Cash Flow generation improved Free cash flow (before WC, taxes and financing costs, excluding H1-2016 H1-2015 Houndé capex and Karma) US$m US$/oz US
Slide 15: Net Free Cash Flow Breakdown
3 Net Free Cash Flow Breakdown $(000's) H1-2016 H1-2015 Insights: Free cash flow (before WC, taxes and financing costs, Houndé capex and Karma) 59 47 Houndé project cash-out (15) (2) 1. + net proceeds from sales +$17m - mining costs capitalized ($9m) Karma cashflow 1 (2) - - capital expenditure ($10
Slide 16: Continued Reduction in Net Debt… Now Cash Positive
4 Continued Reduction in Net Debt… Now Cash Positive Reducing debt was a key priority over the Significantly increased cash position (US$m) last 6 months $238m Endeavour became cash positive: • US$65m cash injection received from $134m $110m La Mancha in May following the True $62m Gold transact
Slide 17: Section 3: Details by Mine and Project
CREATING A PREMIER AFRICAN GOLD PRODUCER Section 3: Details by Mine and Project 16
Slide 18: Agbaou Mine – Côte d’Ivoire
Agbaou Mine – Côte d’Ivoire H1-2016 Insights Production and AISC • Optimized mill throughput, running Production, koz AISC, US$/oz significantly above nameplate capacity, 52koz benefiting production in Q2 vs Q1 45koz 44koz 46koz 41koz 43koz • Ongoing low AISC, well below its $650-700/oz guidance, be
Slide 19: Agbaou Exploration
Agbaou Exploration • In 2016, exploration is focused on the Agbaou Site Map North pit and South pit extensions, the Agbaou South target, and on generating targets beyond the current resource boundaries • Following resolution of ground reclamation and compensation issues with local communities, drill
Slide 20: Tabakoto Mine – Mali
Tabakoto Mine – Mali H1-2016 Insights Production and AISC • Steady production in Q2 compared to Q1 Production, koz AISC, US$/oz despite 8 days general strike against the 40koz 42koz 39koz 39koz State 34koz 36koz • Good performance of Segala and Kofi positively impacting grade milled $1,127 $1,119 $1
Slide 21: Tabakoto Mine – Exploration
Tabakoto Mine – Exploration Tabakoto Site Map • An exploration program has been launched in early 2016 to extend the mine lives of the current underground mines and test new open pit potential • At Kofi B North a 244 hole RC drilling program and a 1,311 hole auger drilling program have been complete
Slide 22: Ity Mine – Côte d’Ivoire
Ity Mine – Côte d’Ivoire H1-2016 Insights Production and AISC • Similar level of production in Q2 Production, koz AISC, US$/oz compared to Q1 as production benefited 24koz 22koz from the cyclical nature of heap leach 21koz 21koz 19koz processing recovery rates 17koz • Cash Cost remained stable while
Slide 23: Ity Mine – Exploration
Ity Mine – Exploration Ity Site Map • In 2016, exploration is focused on drilling previously identified oxide targets to prolong the life of the heap leach operation and drill new targets with the aim of delineating additional resources for the CIL project • Furthermore, Endeavour has strategically
Slide 24: Nzema Mine – Ghana
Nzema Mine – Ghana H1-2016 Insights Production and AISC • Q2 production was similar to Q1, due to lower Production, koz AISC, US$/oz volumes and grade from purchased ore 33koz suppliers 27koz 27koz • Owner mining is performing slightly above 23koz 20koz 20koz expectations • AISC impacted by processi
Slide 25: Karma Update
Karma Update Endeavour’s construction, operations, and exploration Mining +14% positive reconciliation on ounces teams further reviewed and re-validated the acquisition Current mining costs of $1.4/t, roughly 15% below DFS case assumptions following the close of the transaction Outlook: and have
Slide 26: Karma - Exploration
Karma - Exploration Karma Site Map • Target: +10 year mine life by year end • Undertaking a 60,000m program at Kao North, with the aim of extending sterilization and mine life by +2.5 years • Highly prolific region: – One of the largest gold-in-soil anomalies in the country – In situ anomaly sits ab
Slide 27: Houndé Update
Houndé Update Significant achievements to date: Procurement is approximately 30% complete • Construction is progressing on-time and on-budget • Procurement is approximately 30% complete $328m • Mining fleet equipment financing, amounting to approximately $38 million (for equipment valued at $46 mill
Slide 28: Section 4: 2016 Outlook and Updated Guidance
CREATING A PREMIER AFRICAN GOLD PRODUCER Section 4: 2016 Outlook and Updated Guidance 27
Slide 29: Production guidance increased with addition of Karma
1 Production guidance increased with addition of Karma H1-2016 Initial 2016 Revised 2016 (in koz on a 100% basis) Actual Guidance Guidance Agbaou 89 165 - 175 180 - 195 Tabakoto 78 155 - 175 155 - 175 Nzema 40 110 - 130 90 - 100 Ity 43 65 - 75 70 - 80 Youga 8 7 - 8 7 - 8 Sub-total 258 502 - 563 502
Slide 30: AISC group objective remains unchanged
2 AISC group objective remains unchanged H1-2016 Initial 2016 Revised 2016 Insights: (in $/oz) Guidance Guidance Agbaou 525 650 - 700 550 - 600 Group AISC remains in-line Tabakoto 1,066 920 - 970 970 - 1,050 with initial guidance due to Nzema 1,212 970 - 1,020 1,050 - 1,125 Agbaou out-performance
Slide 31: Revised Guidance for FCF @ 1,250 for H2-2016
3 Revised Guidance for FCF @ 1,250 for H2-2016 (in US$ millions) Initial Guidance Revised Guidance Insights: Revenue (based on production guidance range mid-point) 630 665 AISC costs (based on AISC guidance range mid-point) (492) (481) Free cash flow before Houndé All-in sustaining margin 138 185
Slide 32: Upcoming Events and Catalysts
Upcoming Events and Catalysts Exploration strategic review on-track to be completed during Q3-2016 Houndé construction advancement On-going exploration campaigns Ity DFS underway with target completion for Q3-2016 Upcoming IR events: – September 12-13: Credit Suisse conference – September
Slide 33: Appendix
CREATING A PREMIER AFRICAN GOLD PRODUCER Appendix 32
Slide 34: Adjusted Net Earnings Breakdown
Adjusted Net Earnings Breakdown In US$m H1-2016 H1-2015 Insights: Total net and comprehensive earnings (8) 51 1. Includes hedge settlements, 1 realized FX, restricted cash (Gain) loss on financial instruments 24 (4) movements, other adjustments Stock-based payments 2 6 2 2. Increased due to mark-to-
Slide 35: Production and Cost Details by Mine
Production and Cost Details by Mine Agbaou Nzema Tabakoto Ity3 (on a 100% basis) Unit Q2-2016 Q1 2016 Q2 2015 Q2-2016 Q1 2016 Q2 2015 Q2-2016 Q1 2016 Q2 2015 Q2-2016 Q1 2016 Physicals Total tonnes mined – OP1 000t 5,918 6,071 5,075 1,852 1,710 2,450 1,704 2,232 2,480 1,584 2,098 Total ore tonnes – O
Slide 36: Balance Sheet
Balance Sheet June 30, December 31, 2016 2015 ASSETS Current Cash $ 133,985 109,519 Cash - restricted 5,205 4,824 Trade and other receivables 7,319 13,045 Income taxes receivable 169 2,945 Inventories (Note 5) 82,005 93,939 Prepaid expenses and other 18,626 12,640 247,309 236,912 Mining interests (N
Slide 37: P&L
P&L Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Revenues Gold revenue $ 160,373 $ 132,798 $ 304,331 - $ 263,246 Cost of sales Operating expenses 87,496 73,127 171,481 152,886 Depreciation and depletion 21,781 16,908 48,005 34,866 Royalties 7,229 6,690 13,819 13,043 Ear
Slide 38: Cash Flow Statement
Cash Flow Statement Three months ended June 30, Six months ended June 30, 2016(1) 2015 (1) 2016(1) 2015 (1) Operating Activities Earnings before taxes $ (9,875) $ 26,877 $ (4,292) $ 47,165 Adjustments for: Depreciation and depletion 21,781 18,207 49,264 37,658 Unwinding of reclamation obligation 175