Endeavour Mining Plc · TSX:EDV
Endeavour Mining — Q1 2019 Earnings Presentation
34 slides from Endeavour Mining's earnings presentation, May 1, 2019
Slide 1: Operational & Financial Results Q1-2019
Q1 Q2 OPERATIONAL & FINANCIAL RESULTS Q3 › May 1, 2019 Q4
Slide 2: Disclaimer & Forward Looking Statements
Q1-2019 RESULTS DISCLAIMER & FORWARD LOOKING STATEMENTS Cash cost per ounce and all-in sustaining cash cost per ounce are non-GAAP performance measures with no standard meaning under IFRS. This presentation contains “forward-looking statements” including but not limited to, statements with respect t
Slide 3: Speakers and Table of Contents
SPEAKERS TABLE OF CONTENTS SÉBASTIEN DE MONTESSUS 1 Q1-2019 IN REVIEW President & Chief Executive Officer 2 FINANCIAL SUMMARY DETAILS BY MINE AND VINCENT BENOIT EVP – CFO and Corporate Development 3 PROJECT 4 CONCLUSION PATRICK BOUISSET EVP – Exploration and Growth 5 APPENDIX Note : All amounts are
Slide 4: Q1-2019 Activities Recap
Q1-2019 RESULTS Q1-2019 ACTIVITIES RECAP Strong continued achievements across our 4 pillars 1 OPERATIONAL EXCELLENCE 2 PROJECT DEVELOPMENT 3 UNLOCKING EXPLORATION VALUE 4 PORTFOLIO & BALANCE SHEET MANAGEMENT ✓ Strong safety record ✓ Ity CIL commercial ✓ Over 115,203m drilled in Q1- ✓ Strong liquidit
Slide 5: Q1 Performance On-Track to Meet Guidance
Q1-2019 RESULTS Q1 PERFORMANCE ON-TRACK TO MEET GUIDANCE On-track to meet 2019 guidance with Ity CIL commercial production in Q2 GROUP Q1 BELOW LTIFR1 INDUSTRY 0 0.72 Industry Average GROUP Q1 ON-TRACK PRODUCTION 121koz 615-695koz Guidance GROUP $760/oz $810/oz AISC Q1 ON-TRACK $877/oz Guidance Lost
Slide 6: Strong Safety Record
Q1-2019 RESULTS STRONG SAFETY RECORD Our safety record remained below the industry average in Q1-2019 Lost Time Injury Frequency Rate (on a rolling 12-months basis) 0.72 0.04 LTM Lost Time Injury Frequency Rate 0.40 0.29 +500days 0.16 0.04 0.00 0.00 0.00 without an LTI on Peer FY2016 FY2017 FY2018 Q
Slide 7: Well Positioned to Meet Full Year 2019 Guidance
Q1-2019 RESULTS WELL POSITIONED TO MEET FULL YEAR 2019 GUIDANCE Upcoming benefit of Ity CIL and higher grades across other mines Group Production and AISC (for continuing operations) Ity Heap Leach (ceased in Q4-2018) Other operating mines AISC 174koz (record quarter!) -53koz 152koz Q1-2019 vs. Q4-2
Slide 8: Strategic Focus to Reduce Low-Grade Stockpiles
Q1-2019 RESULTS STRATEGIC FOCUS TO REDUCE LOW-GRADE STOCKPILES Despite impact on AISC and production, $8m of inventory adjustments utilized in Q1-2019 AISC including discontinued operations, in US$/oz Tonnes ore mined (kt) Tonnes ore milled (kt) Use of stockpiles 2,850kt ῀30% 28% Mill feed from low-
Slide 9: Well Positioned to Meet FY-2019 Guidance: Insights by Mine
Q1-2019 RESULTS WELL POSITIONED TO MEET FY-2019 GUIDANCE Upcoming benefit of Ity CIL and higher grades across other mines INSIGHTS BY MINE AGBAOU ITY HL ITY CIL HOUNDÉ KARMA (Pre-commercial production) 44koz 76koz 21koz $1,086 33koz 32koz 55koz 22koz 3koz 9koz $781 $957 $776 $784 $622 $588 $697 Q4-1
Slide 10: Operating Cash Flow Generation
Q1-2019 RESULTS OPERATING CASH FLOW GENERATION Remained strong which helped finance investments in the business Operating Cash Flows Before Non-cash Working Capital (from continuing operations) $84m -$5m Q1-2019 vs. Q4-2018 $64m despite 57koz less produced $53m $48m $45m -9% Q1-2019 vs. Q4-2018 Q1-2
Slide 11: Ity CIL Project Construction
Q1-2019 RESULTS ITY CIL PROJECT CONSTRUCTION CIL construction completed 4 months ahead of schedule HIGHLIGHTS First gold pour, March 2019 › Ity CIL project began processing ore on February 20, 2019 and achieved its first gold pour on March 19, 2019, 4 months ahead of schedule › Commercial production
Slide 12: Q1 Exploration Activities
Q1-2019 RESULTS Q1 EXPLORATION ACTIVITIES Strong exploration efforts with already over a third of the full-year budget spent INSIGHTS EXPLORATION EXPENDITURE FOR Q1-2019 › During Q1-2019, exploration continued to be a strong focus, with a company-wide exploration spend of $15m Fetekro › Over 115,200
Slide 13: Financial Summary
Q1-2019 1 IN REVIEW 2 FINANCIAL SUMMARY DETAILS BY MINE 3 AND PROJECT 4 CONCLUSION 5 APPENDIX
Slide 14: Production Bridge
Q1-2019 RESULTS PRODUCTION BRIDGE Decrease due to Ity HL operation ending and use of lower-grade stockpiles Production Bridge Q1-2018 to Q1-2019 INSIGHTS Change in AISC › In line with guided trends, production from continuing operations decreased 185koz compared to Q1-2018, mainly due: ‒ Ity’s Heap
Slide 15: All-In Margin Breakdown
Q1-2019 RESULTS ALL-IN MARGIN BREAKDOWN Decrease due to lower production and a lower realized gold price QUARTER ENDED, INSIGHTS 1. Decreased mainly due to the Ity Heap Leach MAR. 31, MAR. 31, operation ceasing activities in Q4-2018, and (in US$ million) 2019 2018 declines across the other mines mai
Slide 16: Growth Funding Sources
Q1-2019 RESULTS GROWTH FUNDING SOURCES Cash flow from operations and RCF used to fund growth QUARTER ENDED, INSIGHTS MAR. 31, MAR. 31, 1. The main components as follows: (in US$ million) 2019 2018 ‒ Receivables were an outflow of $3.9m. This was ALL-IN MARGIN FROM CONTINUING OPERATIONS 22 63 mainly
Slide 17: Cash Variation Analysis
Q1-2019 RESULTS CASH VARIATION ANALYSIS Significant investments being done to improve our portfolio quality Net Cash Variation Analysis OPERATING ACTIVITIES › Decreased by $25m compared to Q1-2018, mainly due to a decrease in revenues related to fewer $23m ounces sold at a lower gold price and highe
Slide 18: Net Debt and Liquidity Analysis
Q1-2019 RESULTS NET DEBT AND LIQUIDITY ANALYSIS Expected to quickly deleverage as Ity CIL now in production Net debt analysis INSIGHTS Gearing 1 Net Debt Net Debt / Adj. EBITDA (LTM) › Net debt increased from $536m to $635m over the past quarter mainly due to the Ity construction 1.68x › Net Debt to
Slide 19: Net Earnings Breakdown
Q1-2019 RESULTS NET EARNINGS BREAKDOWN Adjusted EPS of $(0.04) for Q1-2019 QUARTER ENDED MAR. 31, MAR. 31, INSIGHTS (in US$ million) A = Adjustments made of Adjusted Net Earnings 2019 2018 1. The gain in 2019 is due to a $0.9 million GOLD REVENUE 151 199 loss on the gold revenue protection Operating
Slide 20: Details by Mine and Project
Q1-2019 1 IN REVIEW 2 FINANCIAL SUMMARY DETAILS BY MINE 3 AND PROJECT 4 CONCLUSION 5 APPENDIX
Slide 21: Houndé Mine, Burkina Faso
DETAILS BY MINE & PROJECT HOUNDÉ MINE, BURKINA FASO Higher Grade Bouéré deposit to increase production in H2-2019 Q1-19 vs Q4-18 INSIGHTS Production and AISC › Production decreased in line with expectations Production, koz AISC, US$/oz as low-grade stockpiles temporarily supplemented plant feed. Min
Slide 22: Agbaou Mine, Côte d'Ivoire
DETAILS BY MINE & PROJECT AGBAOU MINE, CÔTE D’IVOIRE Waste capitalization efforts expected to progress throughout the year Q1-19 vs Q4-18 INSIGHTS Production and AISC › Production decreased in line with Production, koz AISC, US$/oz expectations as low-grade stockpiles temporarily supplemented plant
Slide 23: Karma Mine, Burkina Faso
DETAILS BY MINE & PROJECT KARMA MINE, BURKINA FASO Temporary use of low-grade stockpiles supplementing stack feed Q1-19 vs Q4-18 INSIGHTS Production and AISC › Production decreased in line with Production, koz AISC, US$/oz expectations due to the low-grade stockpiles 33koz temporarily used to supple
Slide 24: Ity Heap Leach Mine, Côte d'Ivoire
DETAILS BY MINE & PROJECT ITY HEAP LEACH MINE, CÔTE D’IVOIRE Residual recovery after mining operations ceased in December 2018 Q1-19 vs Q4-18 INSIGHTS Production and AISC › As previously disclosed, mining and stacking Production, koz AISC, US$/oz activities for the Heap Leach operations 25koz ceased
Slide 25: Conclusion
Q1-2019 1 IN REVIEW 2 FINANCIAL SUMMARY DETAILS BY MINE 3 AND PROJECT 4 CONCLUSION 5 APPENDIX
Slide 26: Conclusion: Upcoming Catalysts
CONCLUSION UPCOMING CATALYSTS ON TRACK TO MEET FY-2019 GUIDANCE › Production on-track to meet the FY-2019 guidance of 615-695koz Immediate › AISC on-track to meet the FY-2019 guidance of $760-810/oz Cashflow › Q2-2019 to benefit from Ity CIL start of commercial production from Production › Commissio
Slide 27: Appendix
Q1-2019 1 IN REVIEW 2 FINANCIAL SUMMARY DETAILS BY MINE 3 AND PROJECT 4 CONCLUSION 5 APPENDIX
Slide 28: Exploration at the Houndé Mine, Burkina Faso
APPENDIX EXPLORATION AT THE HOUNDÉ MINE, BURKINA FASO Further exploration success expected in Kari Area INSIGHTS Houndé Site Map › Houndé is the largest exploration focus for Endeavour in 2019 with a budget of $17 million comprising approximately 195,000m of drilling with the aim of drilling the ent
Slide 29: Agbaou Mine, Côte d'Ivoire
APPENDIX AGBAOU MINE, CÔTE D’IVOIRE Exploration activities postponed until later in the year Agbaou Site Map INSIGHTS › An exploration program of up to $2 million, totaling approximately 10,000m has been initially planned for 2019 with the aim of delineating oxide material in extensions of the North
Slide 30: Ity Mine, Côte d'Ivoire
APPENDIX ITY MINE, CÔTE D’IVOIRE Main focus is on the La Plaque discovery Ity Site Map INSIGHTS › A $10 million exploration campaign has been planned in 2019 totaling approximately 71,000m with the aim of extending and delineating the Le Plaque deposit, conducting regional exploration in its vicinit
Slide 31: Karma Mine, Burkina Faso
APPENDIX KARMA MINE, BURKINA FASO Focus on North Koa, Yabonsgo and near-mill targets Karma Site Map INSIGHTS › An exploration program of up to $2 million totaling approximately 27,000m has been planned for 2019, with the aim of delineating near-mill oxide targets, mainly focused on testing the exten
Slide 32: Fétékro Greenfield Exploration in Côte d'Ivoire
APPENDIX FÉTÉKRO GREENFIELD EXPLORATION IN CÔTE D’IVOIRE Updated resource is planned to be published in Q3-2019 INSIGHTS Fétékro’s Lafigué exploration prospect gold in soil map › A $5 million exploration campaign totaling approximately 43,000m has been planned for 2019 with the aim of delineating ad
Slide 33: Kalana Project, Mali
DETAILS BY MINE & PROJECT KALANA PROJECT, MALI Aim to increase resource base for project Several Licenses under negociation INSIGHTS With Private owners › A $4 million exploration campaign totaling approximately 26,000m has been planned for 2019, starting in the second quarter, with the aim of testi
Slide 34: Production and Cost Details by Mine
APPENDIX PRODUCTION AND COST DETAILS BY MINE On a quarterly basis AGBAOU ITY CIL ITY HL KARMA HOUNDÉ (on a 100% basis) Unit Q1-2019 Q4-2018 Q1-2018 Q1-2019 Q4-2018 Q1-2018 Q1-2019 Q4-2018 Q1-2018 Q1-2019 Q4-2018 Q1-2018 Q1-2019 Q4-2018 Q1-2018 Physicals Total tonnes mined – OP1 000t 6,217 7,040 7,95