Endeavour Mining Plc · TSX:EDV
Endeavour Mining — Merger or Acquisition (October 2011)
49 slides from Endeavour Mining's merger presentation, October 2011
Slide 1: Endeavour Mining & Adamus Resources Investor Presentation
Endeavour Mining & Adamus Resources presents A New Growth Focused West African Gold Production & Exploration Company Investor Presentation October 2011 This presentation may contain forward-looking information relating to the future performance of Endeavour Mining, Adamus Resources or the combined e
Slide 2: Current Position
Current Position Endeavour Adamus Youga Gold Mine, Burkina Faso Nzema Gold Mine, Ghana Producing 84,000ozs in 2011 Producing 88,000 ozs in 2011 (Commercial production achieved 1 April 2011) Agbaou, Côte d’Ivoire US$195M cash & marketable securities1 US$60M Project Debt1 32,034 ozs hedged at US$7003
Slide 3: Platform for Growth & West African Consolidation
Platform for Growth & West African Consolidation Organic Gold • Doubles and diversifies gold production • Production rate of ~250,000 ozs/yr by end 2013 with Agbaou Growth Profile • Creates a major West African exploration company Acquisition Strategy • To significantly increase production by end 20
Slide 4: Complementary Pipeline for West African Growth
Complementary Pipeline for West African Growth Operating Mines • Youga Mine & Satellite Deposits, Burkina Faso • Nzema Mine & Satellite Deposits, Ghana Feasibility Stage Projects • Agbaou Gold Project, Côte d’Ivoire, with drilling & engineering studies underway • Finkolo JV with Resolute near Syama
Slide 5: Increased Production and Diversification
Increased Production and Diversification Production rate expected to be approximately 250,000 ozs/yr by end 2013 with Agbaou Metric Youga Nzema Agbaou Total 2011 Gold Production Ozs1 84,000 88,000 - 172,000 Forecasted Production Ozs2 80 - 85,000 80 - 100,000 73,000+ ~250,000 2011 Cash Cost per Oz (U
Slide 6: Youga Gold Mine
• Located in Burkina Faso, owned 90% by Endeavour Youga Gold Mine • In production since mid-2008 • Open pit operation • Hard rock, drill and blast mining • 1 Mtpa Gravity/CIL plant with simple metallurgy, 93% recovery • Production 2011 – 84,000 oz • Cash Costs2 (US$/oz) 2011 – $610 to $650 Youga Gol
Slide 7: Nzema Gold Mine
• South-west Ghana, owned 90% by Adamus Nzema Gold Mine • Newest operating mine in Ghana, commercial production declared April 1, 2011 • Open pit operation • 1.6 to 2.2 Mtpa Gravity/CIL plant • Built on-time and capital cost on-budget • Production 2011 – 88,000 oz (includes ramp-up) • June 2011/12 –
Slide 8: Agbaou Gold Project
Agbaou Gold Project • EIS approved, Mining Permit application submitted, authorization for preliminary work received Sept 2010 • 2009 MDM Feasibility Study being updated • Engineering & technical studies being refined ($4.3M ) • Increased exploration budget due to discoveries during condemnation dri
Slide 9: Pro Forma Gold Production
Pro Forma Gold Production1 2011 pro forma production of 172,000 ounces at a cash cost per ounce2 of US$575 to US$625 1 Gold production projections based on Management estimates 2 Excludes royalties, refining, freight and non-cash adjustments Gold Growth Profile Creating a New Growth Focused West Afr
Slide 10: Creation of a West African Exploration Company
Creation of a West African Exploration Company • Well positioned for value creation from minesite to regional exploration • 10,411 km2 land position in West Africa • Financial strength and professional team to implement bigger exploration programs Gold Growth Profile Creating a New Growth Focused We
Slide 11: Creation of a West African Exploration Company
Creation of a West African Exploration Company Numerous Highly Prospective Targets for future production growth Gold Growth Profile Creating a New Growth Focused West African Gold Producer 11
Slide 12: Acquisition Growth Strategy
Acquisition Growth Strategy • Targeting complementary producing gold assets • Primary focus on West Africa • Meaningful contribution to gold production profile • Compelling potential for resource and reserve growth Gold Growth Profile Creating a New Growth Focused West African Gold Producer 12
Slide 13: Increased Leverage to Gold Price
Increased Leverage to Gold Price • Current – Both companies underleveraged to gold • Adamus has 269,000 ozs hedged at US$1,075/oz1, upside is lost on ~50% of the next five years of production • Endeavour has cash and marketable securities of US$195M, with limited exposure to gold price, and a residu
Slide 14: Strong Balance Sheet to Support Growth Initiatives
Strong Balance Sheet to Support Growth Initiatives Cash & Marketable Securities, (Pro-forma June 30, 2011 Balances) US$210M Repayment of Nzema Project Debt -US$60M Investment to Reduce Gold Hedge -US$100M Undrawn, Credit-Approved Corporate Loan Facility from Unicredit Bank AG1 US$200M Cash Available
Slide 15: Integration of Two Highly Complementary Teams
Integration of Two Highly Complementary Teams • Endeavour has a proven transaction and company-building track record • Adamus has West African mine building experience • Nzema mine built on-time and on-budget • Neil Woodyer to be CEO, Mark Connelly to be COO • Operations team to be led from Perth, A
Slide 16: Proposed Board of Directors
Proposed Board of Directors Michael E. Beckett – Non-Executive Chairman. Former chair of Ashanti Goldfields Ltd. and former Managing Director of Consolidated Gold Fields, Mr. Beckett has a deep knowledge of African mining Mark Connelly – Managing Director / CEO of Adamus, joined in 2007 as COO. Prev
Slide 17: Analyst Commentary on the Merger
Analyst Commentary on the Merger “In our view, the deal de-risks the balance sheet, provides a larger, more stable portfolio of assets and puts two complementary sets of management teams together… The growth profile of the merged entity is superior to that of ADU on a standalone basis with the Agbao
Slide 18: Significant Near-Term Market Re-Rating Potential
Significant Near-Term Market Re-Rating Potential • Pro-forma market capitalization of US$585M1 • Increased and diversified gold production • A major West African exploration company with high potential targets • Increased exposure to gold price • Strong cash generation • Increased scale broadens acq
Slide 19: West African Peer EV/EBITDA Ratings
West African Peer EV/EBITDA Ratings EV for Peers sourced from Bloomberg, Sept 30, 2011 EBITDA estimates for Peers based on 2012 estimates (BMO Capital Markets Research) at $1,600/oz gold price Endeavour (Pro Forma) EV and EBITDA calculations based on Management estimates at $1,600/oz gold price Well
Slide 20: Merger of Equals – Summary Terms
Merger of Equals – Summary Terms Structure • 0.285 Endeavour shares for each Adamus Share • Market exchange ratio based on a 20-day VWAP as of Aug 19, 2011 • Implemented by an Australian “Scheme of Arrangement” Key Statistics • Ownership issued shares: 47.2% Endeavour and 52.8% Adamus • Ownership fu
Slide 21: Platform for Growth & West African Consolidation
Platform for Growth & West African Consolidation Organic Gold • Doubles and diversifies gold production • Production rate of ~250,000 ozs/yr by end 2013 with Agbaou Growth Profile • Creates a major West African exploration company Acquisition Strategy • To significantly increase production by end 20
Slide 22: Appendix
Appendix Share Price Chart Back-tested Exchange Ratio Resources and Reserves Additional Mine & Project Information Platform for Growth & West African Consolidation Creating a New Growth Focused West African Gold Producer 22
Slide 23: Adamus & Endeavour Share Price Chart
Adamus & Endeavour Share Price Chart Merger Consideration: • EDV & ADU have had very similar trading patterns • Market-based all-stock exchange ratio (0.285 EDV for each ADU) results in approximately equal ownership to EDV and ADU Data source: Bloomberg, Last data point: August 19, 2011 Appendix Cre
Slide 24: Back-tested Exchange Ratio
Back-tested Exchange Ratio Merger Considerations: • 0.285 share exchange ratio results in approximately equal ownership to Endeavour & Adamus • Over an extended historic period, the implied value has closely tracked Adamus’ historic share price Data source: Bloomberg, Last data point: August 19, 201
Slide 25: Endeavour’s Mineral Resources
Endeavour’s Mineral Resources Resources (including reserves, 0.5g/t lower cutoff) Project Measured Indicated Measured & Indicated Inferred Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Mt Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Youga1 - Total 3.518 2.7 303,000 7.641 1.
Slide 26: Endeavour’s Mineral Reserves
Endeavour’s Mineral Reserves Reserves Project Proven Probable Proven & Probable Gold Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Mt g/t Mt g/t Mt g/t Price Youga1 - Total 2.414 2.8 216,000 2.062 2.2 146,000 4.477 2.5 362,000 US$1000 Attributable - 90% - - 194,400 - - 131,400 - - 325,
Slide 27: Adamus’ Resources & Reserves
Adamus’ Resources & Reserves Resources (including reserves, 0.8 g/t lower cutoff) 1 Project Measured Indicated Measured & Indicated Inferred Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Mt Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Nzema2 – Total 20.331 1.84 1,203,000 9.
Slide 28: Adamus’ Mining Assets – Qualified Person
Adamus’ Mining Assets – Qualified Person Information in this announcement pertaining to Adamus exploration results was compiled by Martin Bennett, an employee of Adamus Resources Limited, who is a Member of the Australasian Institute of Geoscientists and has more than 5 years experience in estimatio
Slide 29: Endeavour’s Youga Gold Mine
Endeavour’s Youga Gold Mine YOUGA GOLD MINE, Burkina Faso • Forecast to produce 84,000 ounces in 2011 at a cash cost of approximately $610- $650/oz1 • Endeavour owns 90% and remaining 10% held by the Government • Open pit operation with mining in 5 pits • Current Reserves 4.5Mt at 2.5 g/t • 1 Mtpa C
Slide 30: Endeavour’s Youga Gold Mine – A2 Main Pit
Endeavour’s Youga Gold Mine – A2 Main Pit Photo taken July 12, 2011 Appendix Endeavour’s Mining Assets Creating a New Growth Focused West African Gold Producer 30
Slide 31: Endeavour’s Youga Gold Mine – A2 Main Pit
Endeavour’s Youga Gold Mine – A2 Main Pit Appendix Endeavour’s Mining Assets Creating a New Growth Focused West African Gold Producer 31
Slide 32: Youga Gold Mine – Main Pit & East Pit Drilling Plan
Youga Gold Mine – Main Pit & East Pit Drilling Plan Targets being drilled in immediate Youga mine area • East wall of Main pit (Triple-A) • Hanging wall of East zone • Eastern extension of East zone • The Gap • Down-plunge extension of Main zone Gold Growth Profile Creating a New Growth Focused West
Slide 33: Endeavour’s Youga Mining Permit Exploration Targets
Endeavour’s Youga Mining Permit Exploration Targets Appendix Endeavour’s Mining Assets Creating a New Growth Focused West African Gold Producer 33
Slide 34: Endeavour’s Youga Targets and Resources
Endeavour’s Youga Targets and Resources Youga Mine and Exploration Targets Appendix Endeavour’s Mining Assets Creating a New Growth Focused West African Gold Producer 34
Slide 35: Endeavour’s Youga Greenstone Belt: $12.5M Program - 22 Targets
Endeavour’s Youga Greenstone Belt: $12.5M Program - 22 Targets Ouaré Zerbogo Permits 2 drill targets Bitou Permits 3 drill targets Youga Mine Permit 17 drill targets Appendix Endeavour’s Mining Assets Creating a New Growth Focused West African Gold Producer 35
Slide 36: Exploration Activity Update - Ouaré Deposit (Youga Belt)
Exploration Activity Update - Ouaré Deposit (Youga Belt) • Ouaré 2011 exploration and resource delineation program • Deposit approximately 40km from Youga mill • Current Inferred mineral resource 4.7Mt at 2.1g/t* • Drilling to increase resource and upgrade resource classification • Exploration drill
Slide 37: Agbaou Gold Project, Côte d’Ivoire
Agbaou Gold Project, Côte d’Ivoire • 85% Endeavour, 10% State, 5% SODEMI • Open pit with a 1.2Mtpa CIL plant* • Reserves 732,000 ozs (10.9M t at 2.1g/t) • Recovery 91% • Production: 73,100 oz per year for 9.1 years • LOM cash cost US$516/oz (owner fleet) • Capital Cost: US$106M *Source: Feasibility
Slide 38: Adamus’ Nzema Gold Mine
Adamus’ Nzema Gold Mine • Newest operating mine in Ghana • Built on-time and capital cost on-budget • First gold production 17 January 2011, ahead of schedule • Multi million additional ounce potential through exploration and current concessions • Proven management with West African experience Appen
Slide 39: Ghana – A Premier African Mining Jurisdiction
Ghana – A Premier African Mining Jurisdiction • Historic, established gold country • Paved roads, grid power & water • Strong technical workforce Nzema Gold • Quality, experienced contractors Project Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 39
Slide 40: Nzema Mining Areas
Nzema Mining Areas SALMAN TREND 440,000oz Reserve ANWIA & BOKROBO 630,000oz Reserve Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 40
Slide 41: Nzema Processing Plant & Facilities
Nzema Processing Plant & Facilities Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 41
Slide 42: Nzema Ancillary Infrastructure
Nzema Ancillary Infrastructure Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 42
Slide 43: Nzema Village Resettlement
Nzema Village Resettlement • 60% complete • Public buildings complete • Residential housing under construction • Completion in the second half of 2011 Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 43
Slide 44: Nzema 2011 Exploration & Resources Growth
Nzema 2011 Exploration & Resources Growth • Potential to develop additional satellite deposits (near mine) • Highly prospective concessions (regional) • Sulphide ounces (near mine) • Exploration program includes both RC (25,000m) & Diamond (10,000m) Drilling in 2011 • Mineral resource upgrade target
Slide 45: Nzema Potential Upside – Near Mine
Nzema Potential Upside – Near Mine Optimise planning to deliver highest NPV from near mine targets Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 45
Slide 46: Nzema Potential Upside – Akango (Oxide extensions)
Nzema Potential Upside – Akango (Oxide extensions) Extension drilling required in low lying Salman areas between pits North Nugget Hill Teberu Low lying area Nugget Hill Teberu N 400m Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 46
Slide 47: Nzema Potential Upside – Sulphide
Nzema Potential Upside – Sulphide Targeting significant ounce additions at depth Appendix Adamus’ Mining Assets Creating a New Growth Focused West African Gold Producer 47
Slide 48: Potential Upside – Nzema Sulphide
Potential Upside – Nzema Sulphide Sulphide Potential initial target of 2 – 3 million ounces gold mineral resource Bogoso • Metallurgical Testwork undertaken Bio Oxidisation Plant in 2010 • Sulphide concentrate process Nzema to Bogoso 70 kms by road • BIOX treatment process • A conceptual economic st
Slide 49: West African Peer EV/Resource Ounce Ratings
West African Peer EV/Resource Ounce Ratings Mineral Resource data from Company Reports EV for Peers sourced from Bloomberg, Sept 30, 2011 Endeavour (Pro Forma) EV calculations based on Management estimates Well Positioned for a Value Re-Rating Creating a New Growth Focused West African Gold Producer
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