Slide 1: Endeavour Mining Webcast Presentation: Q4 and FY2015 Results; True Gold Acquisition
Endeavour Mining Webcast Presentation: Part 1: Q4 and Full Year 2015 Results Part 2: Acquisition of True Gold Mining CREATING A PREMIER AFRICAN GOLD PRODUCER
Slide 2: Disclaimer & Forward Looking Statements
Disclaimer & Forward Looking Statements Cash cost per ounce and all-in sustaining cash cost per ounce rates, increases in market prices of mining consumables, possible are non-GAAP performance measures with no standard meaning variations in ore reserves, grade or recovery rates; failure of under IFR
Slide 3: Part 1 – Q4 and FY 2015 Results
Part 1 – Q4 and FY 2015 Results Speakers: Neil Woodyer Chief Executive Officer & Director Ota Hally Chief Financial Officer Sébastien de Montessus Vincent Benoit President & Director EVP – Strategy and Business Development Adriaan "Attie" Roux Chief Operating Officer CREATING A PREMIER AFRICAN GOLD
Slide 4: Out-performed guidance again in 2015
Out-performed guidance again in 2015 Strong operational performance – Beat production and AISC guidance – Increased production by 11% – Decreased AISC/oz costs by 9% Solidified balance sheet through cash flow generation – Free cash flow increased by 2.4x with US$85 million generated before tax, WC 2
Slide 5: Delivering our strategic objectives
Delivering our strategic objectives 1) Increase Production 2) Decrease All-in Sustaining Cash Costs Production, on a 100% basis in koz AISC, in US$/oz +11% $1,137/oz 535-560koz 517koz 466koz -9% $1,010/oz 324koz $922/oz $870-920/oz 2013A 2014A 2015A 2016 Guidance 2013A 2014A 2015A 2016 Guidance (pos
Slide 6: Strong Q4 performance
Strong Q4 performance Record Production in Q4-2015 All-in Sustaining Cash Costs Production, on a 100% basis in koz AISC, in US$/oz +14% 137koz 1,059 131 -6% 1,021 125 991 $995/oz 123 124 120koz 118 946 $934/oz 908 898 106 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15
Slide 7: Production performance by mine
Production performance by mine Production, in koz on a 100% basis Insights: 200 +32% • Agbaou achieved record production in 2015, mainly due to a 20% increase in mill 181 throughput and the continued benefit of 180 mining free-dig oxide ore 165-175 +19% • Tabakoto increased production by 19% over 16
Slide 8: AISC performance by mine
AISC performance by mine Group AISC All-in Sustaining Cash Costs, decreased by 9% in US$/oz $1,010 in 2014 Insights: $922 2016E 2015 2014 621 in 2015 • Group AISC decreased by 9% mainly due to Agbaou 576 lower operating costs, specifically at Agbaou 650-700 and Tabakoto, as well as the benefit of th
Slide 9: Maintained sustaining margin despite drop in gold price
Maintained sustaining margin despite drop in gold price +4% +59 -1 -17 Stable G&A +$12 at Tabakoto despite increased and +$5.5m at Agbaou production -3m Total Cash Costs US$122m US$117m -49 decreased by 13% to $720/oz Realized gold price fell 8% from US$1,264 to US$1,157/oz +16 Gold sales increased
Slide 10: Net Free Cash Flow breakdown
Net Free Cash Flow breakdown $122m -9 -28 $85m +6 -7 -16 -60 +73 -34 $47m $34m AISC Margin Non-sustaining Non-sustaining Free cash Working capital Taxes paid Interest paid Other items* Free Cash Cash received Revolving credit Year over exploration capital from La Mancha facility payments flow Flow a
Slide 11: Net Earnings
Net Earnings (in US$m) 2015 2014 Variance Revenues 601 584 +17 Volume increase partially offset by gold price decrease Operating expenses (382) (387) (5) AISC decrease helped keep total operating costs stable, despite greater production Royalties (29) (28) +1 Corporate costs (21) (22) (1) Stable Oth
Slide 12: Improved Balance Sheet With Strong Liquidity
Improved Balance Sheet With Strong Liquidity • Net debt reduced by 43%, from US$254 million to US$144 million with US$60 million debt voluntarily reimbursed • The Company’s liquidity sources, at end of 2015, include: – US$110 million cash position – US$110 million undrawn RCF capacity1 – US$90 milli
Slide 13: Free cash flow expected to increase again in 2016
Free cash flow expected to increase again in 2016 2016 production guidance of 535-560koz at AISC of 870-920/oz Insights: Production Guidance1, ounces AISC Guidance, $/oz • At US$1,150 gold price, AISC margin of Agbaou 165,000 - 175,000 Agbaou 650 - 700 approximately US$138m in 2016, or Tabakoto 155,
Slide 14: Reserves and Resources
Reserves and Resources • Successful exploration replenished 93% Proven and Probable Reserves of M&I resource ounces depleted in 2015 in Moz 100% basis +29% – Agbaou fully replaced the soft material 5.9 5.8 mined during 2015 and added an 4.5 +1.6 -0.1 additional year of free-dig oxide mine life, -0.5
Slide 15: Upcoming Catalysts
Upcoming Catalysts • Continued optimization of operations with 2016 production guidance of 535- 560koz while AISC expected to decrease to US$870- 920/oz, post Youga sale • Houndé project investment decision expected in Q2 • Ity CIL project DFS expected by Q3 • Exploration strategic review underway C
Slide 16: Q&A on Endeavour's Q4 and Year 2015 Results
End of Part 1: Q&A on Endeavour’s Q4 and Year 2015 Results Neil Woodyer Chief Executive Officer & Director Ota Hally Chief Financial Officer Sébastien de Montessus Vincent Benoit President & Director EVP – Strategy and Business Development Adriaan "Attie" Roux Chief Operating Officer CREATING A PREM
Slide 17: Part 2 – Acquisition of True Gold Mining
Part 2 – Acquisition of True Gold Mining Neil Woodyer Mark O'Dea Chief Executive Officer & Executive Chairman Director Sébastien de Montessus Christian Milau President & Director Chief Executive Officer Vincent Benoit David Laing EVP – Strategy and Business Chief Operating Officer Development Morgan
Slide 18: Transaction Highlights
Transaction Highlights Endeavour to acquire True Gold for CDN$0.57 per share – True Gold shareholders receive 43% spot premium1 and 33% 20d VWAP premium1 – On an issued share basis, True Gold is valued using spot price at CDN$226 million and using 20d VWAP at CDN$191 million Mine and Project Locatio
Slide 19: Transaction Highlights
Transaction Highlights Intelligent growth of low cost production – Endeavour Mining has a successful “buy and build” strategy focused on growing its low cost gold production – The Karma Mine provides a material upgrade to the recently divested Youga Mine – Proactive portfolio management focused on c
Slide 20: Indicative Terms – C$0.57 Offer Value
Indicative Terms – C$0.57 Offer Value • 0.044 Endeavour shares for every TGM share, equivalent to C$0.57 per TGM share (close, March 3, 2016) Offer: • Offer to be conducted via court-approved Canadian plan of arrangement • Endeavour to provide TGM with US$15 million Bridge Financing • Spot close: 43
Slide 21: Pro Forma Ownership & Capital Structure
Pro Forma Ownership & Capital Structure Current Ownership Structure La Mancha Liberty M&M (Sawiris) 19% 30% Teck 11% Other EDV Other TGM 70% 69% Pro Forma Ownership Structure Liberty M&M 4.0% La Mancha Issued and Outstanding Pro Forma Issued Pro Forma Shares (M) Shares (M) Ownership Other TGM (Sawir
Slide 22: Overview of True Gold's Karma Mine
Overview of True Gold’s Karma Mine CREATING A PREMIER AFRICAN GOLD PRODUCER 22
Slide 23: Karma Heap Leach Project – Overview
Karma Heap Leach Project – Overview 110k – 120k oz/year at AISC/oz ~$700 (years 1-5) – 90% owned by True Gold – Mine is currently in construction, estimated at +96% complete – Simple, open pit mining, heap leach processing (4Mtpa) in semi-arid location with flat terrain – Resources of 75.2Mt at 1.08
Slide 24: Karma Project – Site Plan
Karma Project – Site Plan CREATING A PREMIER AFRICAN GOLD PRODUCER 24
Slide 25: Karma Project – Exploration Upside
Karma Project – Exploration Upside 70.5m @ 1.9 g/t – 6 deposits: GG2, Rambo, Kao, North Kao, GG1, and Nami 7.1m @ 6.6g/t – Only 7 of 45 targets drilled to date, showing positive results: • Watinoma (70.5m @ 1.9 g/t) • Rambo West (22.5m @ 2.4 g/t) 16.3m @ 0.9 g/t • Yabonsgo (5.6m @ 12.6 g/t) • Rounga
Slide 26: Overview of Endeavour Mining
Overview of Endeavour Mining CREATING A PREMIER AFRICAN GOLD PRODUCER 26
Slide 27: Endeavour Overview
Endeavour Overview 4 producing mines at low AISC – Sustained operational performance, having constantly increased production and decreased costs over past 4 years Tabakoto Mine – 2016 production to increase to 535-560koz, Bamako from 518koz in 2015 Houndé Project Ouagadougou Youga Mine (Sold) – 2016
Slide 28: Agbaou Mine – Côte d'Ivoire
Agbaou Mine – Côte d’Ivoire Quick Facts (on 100% basis) Ownership 85% EDV, 10% Côte d’Ivoire, 5% SODEMI Resources M&I: 14.4Mt @ 2.5 g/t for 1.180Moz Côte d’Ivoire (incl. of Reserves) Inferred: 1.2Mt @ 1.7 g/t for 0.065Moz Ity Mine Reserves 13.2Mt @ 2.4 g/t for 1.027Moz Agbaou Up to 2.2 Mtpa Gravity/
Slide 29: Tabakoto Mine – Mali
Tabakoto Mine – Mali Quick Facts (on 100% basis) Ownership 80% Endeavour, 20% government in Mali Resources M&I: 18.5Mt @ 3.1 g/t for 1.844Moz Mali (incl. of Reserves) Inferred: 9.0Mt @ 3.6 g/t for 1.023Moz Reserves 6.4Mt @ 3.5 g/t for 0.725Moz Processing Rate 1.4 Mtpa Gravity/CIL Plan Tabakoto Mine
Slide 30: Nzema Mine – Ghana
Nzema Mine – Ghana Quick Facts (on 100% basis) Ownership 90% EDV, 10% government of Ghana Resources M&I: 34.6Mt @ 1.3 g/t for 1.490Moz Ghana (incl. of Reserves) Inferred: 5.9Mt @ 1.3 g/t for 0.244Moz Reserves 4.7Mt @ 2.4 g/t for 0.356Moz Processing Rate 1.6 Mtpa Gravity/CIL plant Nzema Accra Gold Re
Slide 31: Ity Mine – Côte d'Ivoire
Ity Mine – Côte d’Ivoire Quick Facts (on 100% basis) 55% EDV, 30% SODEMI, 10% Côte d’Ivoire, 5% private Ownership Côte d’Ivoire investor Ity Mine Resources (HL + CIL) M&I: 61.4Mt @ 1.6 g/t for 3.106Moz (incl. of Reserves) Inferred: 14.1Mt @ 1.5 g/t for 0.687Moz Agbaou Mine Reserves (HL+CIL) 30.4Mt @
Slide 32: Houndé Project – Burkina Faso
Houndé Project – Burkina Faso Quick Facts (on 100% basis) Ownership 90% EDV, 10% Burkina Faso Burkina Faso Status Fully permitted, awaiting investment decision Ouagadougou Production start date 2017E (if launched mid 2016) Houndé Project Youga Mine Resources M&I: 37.9Mt @ 2.1 g/t for 2.551Moz (incl.
Slide 33: Ity CIL Project – Côte d'Ivoire
Ity CIL Project – Côte d’Ivoire Quick Facts based upon PFS (on 100% basis)* Côte d’Ivoire 55% EDV, 30% SODEMI, 10% Côte d’Ivoire, 5% Ownership private investor Ity CIL Project Status DFS expected by mid-2016 Agbaou Production start date 2019E Mine Resources (HL + CIL) M&I: 61.4Mt @ 1.6 g/t for 3.106
Slide 34: Endeavour Mining's Unlocking Exploration Value
Endeavour Mining’s Unlocking Exploration Value • With this new transaction, Endeavour will be able to enhance its exploration program over the long-term • Exploration Strategic review underway on our key targets to extend group average life of mine – Agbaou : strong proven potential with renewal of
Slide 35: Combination of Market Leaders
Combination of Market Leaders CREATING A PREMIER AFRICAN GOLD PRODUCER 35
Slide 36: Market Perspective – Combination of Market Leaders
Market Perspective – Combination of Market Leaders Relative Performance (September 2015 to Current) Performance vs Peer Group (September 2015 to Current) Endeavour Mining S&P / TSX Global Gold Index Golden Star 186% Gold (US$/oz) True Gold 225% +130% Endeavour Mining 130% Resolute 127% True Gold 108
Slide 37: Benefits to True Gold Shareholders
Benefits to True Gold Shareholders 1• True Gold shareholders receive a meaningful ownership stake in a larger diversified West African producer 2• Short-term US$15m bridge financing as a financing alternative that allows True Gold to maintain its current liquidity without additional gold streaming 3
Slide 38: Benefits to Endeavour Mining Shareholders
Benefits to Endeavour Mining Shareholders 1• Endeavour Mining is growing its low cost gold production – Replacing Youga (a mature mine) with Karma (+11 year mine, low cost) – Karma extends mine life, increases production, lowers group AISC and increases free cash flow generation 2• A value accretive
Slide 39: Growing Low Cost Gold Production
1 Growing Low Cost Gold Production Production Profile (2015 – 2018) Production Profile (2015 – 2018) with Houndé 1,000 koz $1,000 1,000 koz +900 koz 900 koz $980 900 koz 800 koz $960 800 koz 700 koz $940 700 koz $922 600 koz $920 600 koz $920 500 koz $900 500 koz $870 -$25 400 koz $880 400 koz 300 k
Slide 40: Value Accretion
2 Value Accretion Contribution Analysis Ownership (pre-money) 50% 60% 70% 80% 90% 100% EDV TGM Total EDV • TGM shareholders Accretion become 20.9% owners Operational Metrics 2P Reserves (attributable); Moz 4.6 0.9 5.4 15.8% • Contribution analysis M&I Resources (attributable); Moz 7.9 2.4 10.2 23.0%
Slide 41: Improved Financial Strength to Fund Growth
3 Improved Financial Strength to Fund Growth Endeavour Mining’s Liquidity Sources (US$M) Significantly decreased net debt position (US$M) $350M $300M $61.5M $301.5M $254M $300M $250M $250M $20M $194M $110M $200M $200M $143M $150M $150M $110M $110M $100M $100M $62M $69M $50M $50M $M $M EDV Cash Undra
Slide 42: Building a Premier African Gold Producer
4 Building a Premier African Gold Producer Endeavour Mining’s successful ‘buy and build’ strategy +900koz Youga: 1st acquisition, now a mature mine (sold Feb 2016) $1,137 900 koz $1,010 800 koz Nzema: 2nd acquisition, recapitalized Potential for 6 $922 700 koz Tabakoto: 3rd acquisition, mill expande
Slide 43: Conclusion
Conclusion Growing our low cost gold production – Karma extends mine life, increases production, lowers group AISC and increases free cash flow generation Enhancing portfolio to maximize cash flow – Karma provides a material upgrade to the recently divested Youga Mine Further enhancing financial pos
Slide 44: Q&A
Q&A Neil Woodyer Mark O'Dea Chief Executive Officer & Director Executive Chairman Sébastien de Montessus Christian Milau President & Director Chief Executive Officer Vincent Benoit David Laing EVP – Strategy and Business Development Chief Operating Officer Morgan Carroll EVP – Corporate Finance and
Slide 45: Appendix: Q4 & Year 2015 Results Mine by Mine Summary
Appendix 1 Q4 & Year 2015 Results Mine by Mine Summary CREATING A PREMIER AFRICAN GOLD PRODUCER
Slide 46: Agbaou Mine – Côte d'Ivoire
Agbaou Mine – Côte d’Ivoire Quarter ended Dec 31 Full year ended Dec 31 Insights: 2014 2015 2014 2015 OperationalData • Agbaou achieved record production in 2015, up 24% over the previous year with a 20% increase in mill throughput Mining and continued benefit from mining free-dig oxide ore Waste (k
Slide 47: Tabakoto Mine – Mali
Tabakoto Mine – Mali Quarter ended Dec 31 Full year ended Dec 31 Insights: 2014 2015 2014 2015 OperationalData • Tabakoto increased production by 19% over the Mining previous year as the mine benefited from the Waste (kt) 1,314 2,286 6,407 6,453 start of mining of Kofi C open pit and the full Ore Mi
Slide 48: Nzema Mine – Ghana
Nzema Mine – Ghana Quarter ended Dec 31 Full year ended Dec 31 Insights: 2014 2015 2014 2015 OperationalData • Nzema’s production remained fairly constant Mining over the previous year as the mine strategically Waste (kt) 1,826 1,063 6,963 4,096 increased the levels of purchased ore to Ore Mined - o
Slide 49: Youga Mine – Burkina Faso
Youga Mine – Burkina Faso Quarter ended Dec 31 Full year ended Dec 31 Insights: 2014 2015 2014 2015 OperationalData • Subsequent to the year ended December 31, Mining 2015, on February 29, 2016, the Corporation Waste (kt) 21,212 1,502 3,562 6,684 announced that it had sold the Youga Gold Ore Mined -
Slide 50: Ity Mine – Côte d'Ivoire
Ity Mine – Côte d’Ivoire Full Year Post acquisition period Insights: 2015 (Nov 28 to Dec 31, 2015) OperationalData • The Ity Mine is included for the post- Mining acquisition period of November 28 to Waste (kt) 5,465 368 December 31, 2015, in the company’s 2015 Ore Mined - open pit (kt) 1,021 63 fin