NEWS RELEASE - TSX: EDV
All amounts in US$
ENDEAVOUR MINING REPORTS FIRST QUARTER 2017 RESULTS
All mines on-track with guidance · Houndé construction on-time & on-budget · Ity CIL project optimization underway
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Q1 Financial Highlights
Project Highlights
George Town, May 9, 2017 - Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) is pleased to announce its financial and operating results for the quarter ended March 31, 2017, with highlights provided in the table below.
Table 1: Key Operational and Financial Highlights
QUARTER ENDED1 | ||||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Change Q1-17 vs. Q1-16 | |
Gold Production From Continuing Operations, oz | 158,640 | 175,411 | 123,388 | +29% |
Realized Gold Price, $/oz | 1,190 | 1,177 | 1,192 | 0% |
AISC, $/oz | 905 | 855 | 889 | +2% |
All-in Sustaining Margin, $/oz | 285 | 322 | 302 | (6%) |
All-in Sustaining Margin, $m | 46 | 55 | 37 | +24% |
Operating EBITDA, $m | 47 | 68 | 45 | +4% |
Free Cash Flow Before Growth Projects2, $m | 32 | 45 | 32 | 0% |
Net Debt At Period End, $m | 62 | 26 | 136 | (54%) |
Earnings From Mine Operations, $m | 27 | 45 | 27 | 0% |
Basic Net Earnings (Loss), $/share | (0.08) | (0.57) | 0.02 | n.a. |
Adjusted Net Earnings, $/share3 | 0.10 | 0.33 | 0.10 | 0% |
Sébastien de Montessus, President & CEO, stated: "Our strong performance in the first quarter leaves us on track to meet our guidance for 2017. Each of our operating mines contributed in line with our expectations as we benefitted from the portfolio improvement and the asset optimizations carried out last year, resulting in increased and more diversified cash generation.
During the quarter we also continued to deliver on our growth strategy. Construction at Houndé is progressing on time and on budget, with the first gold pour on track for the fourth quarter of this year. At Ity, we reached an in-principle agreement to increase our ownership position from 55% to 80% and we now look forward to moving to a formal investment decision in the coming weeks which would allow our experienced in-house construction team to smoothly transition from Houndé to building the Ity CIL project in the second half of 2017.
We continued to strengthen our balance sheet. The post-period $47.5 million private placement by La Mancha, will, in conjunction with our internal cash flow generation capabilities, give us additional flexibility to pursue our growth strategy. As a result we are well positioned to make further progress towards our long-term goals throughout the rest of the year."
PRODUCTION & AISC ON TRACK TO MEET GUIDANCE AT ALL MINES
Table 2: Group Production, koz
(All amounts in koz, on a 100% basis) | QUARTER | 2017 FULL-YEAR GUIDANCE | |||||
Q1-2017 | Q4-2016 | Q1-2016 | |||||
Agbaou | 42 | 57 | 43 | 175 | - | 180 | |
Tabakoto | 43 | 48 | 39 | 150 | - | 160 | |
Nzema | 26 | 24 | 20 | 100 | - | 110 | |
Ity | 16 | 17 | 22 | 75 | - | 80 | |
Karma | 32 | 29 | - | 100 | - | 110 | |
PRODUCTION FROM CONTINUING OPERATIONS | 159 | 175 | 124 | 600 | - | 640 | |
Youga (divested in March 2016) | - | - | 8 | ||||
TOTAL PRODUCTION | 159 | 175 | 132 | 600 | - | 640 |
Table 3: Group All-In Sustaining Costs, US$/oz
(All amounts in US$/oz) | QUARTER | 2017 FULL-YEAR GUIDANCE | |||||
Q1-2017 | Q4-2016 | Q1-2016 | |||||
Agbaou | 660 | 532 | 525 | 660 | - | 700 | |
Tabakoto | 975 | 927 | 1,071 | 950 | - | 990 | |
Nzema | 951 | 1,118 | 1,158 | 895 | - | 940 | |
Ity | 879 | 827 | 710 | 740 | - | 780 | |
Karma | 748 | 738 | n.a | 750 | - | 800 | |
Youga (divested in March 2016) | - | - | (excluded) | - | - | - | |
MINE-LEVEL AISC | 840 | 779 | 839 | 800 | - | 850 | |
Corporate G&A | 37 | 52 | 38 | 37 | - | 34 | |
Sustaining Exploration | 29 | 25 | 12 | 23 | - | 22 | |
GROUP AISC | 905 | 855 | 889 | 860 | - | 905 |
AGBAOU MINE
Q1 Insights
Table 4: Agbaou Performance Indicators
For The Quarter Ended | Q1-2017 | Q4-2016 | Q1-2016 |
Tonnes ore mined, kt | 624 | 674 | 820 |
Strip ratio (incl. waste cap) | 9.19 | 8.67 | 6.41 |
Tonnes milled, kt | 683 | 721 | 654 |
Grade, g/t | 2.09 | 2.46 | 2.05 |
Recovery rate, % | 95% | 97% | 98% |
PRODUCTION, KOZ | 42 | 57 | 43 |
AISC/OZ | 660 | 532 | 525 |
Table 5: Fresh Ore Break-down and impact
For The Quarter Ended | Q1-2017 | Q4-2016 | Q1-2016 |
Impact on throughput | |||
% of hard ore processed | 30% | 8% | 0% |
Tonnes milled, kt | 683 | 721 | 654 |
Annualized throughput, Mt | 2.7 | 2.9 | 2.6 |
Impact on unit costs | |||
Mining costs, $/t moved | 2.45 | 2.38 | 2.36 |
Tonnes milled, $/t | 6.82 | 6.26 | 5.79 |
Q1 Exploration Activities
2017 Outlook
TABAKOTO MINE
Q4 Insights
Table 6: Tabakoto Performance Indicators
For The Quarter Ended | Q1-2017 | Q4-2016 | Q1-2016 |
OP tonnes ore mined, kt | 217 | 195 | 146 |
OP strip ratio (incl. waste cap) | 7.70 | 7.17 | 14.29 |
UG tonnes ore mined, kt | 236 | 253 | 233 |
Tonnes milled, kt | 405 | 402 | 406 |
Grade, g/t | 3.50 | 3.93 | 3.10 |
Recovery rate, % | 94% | 95% | 94% |
PRODUCTION, KOZ | 43 | 48 | 39 |
Cash cost/oz | 771 | 769 | 808 |
AISC/OZ | 975 | 927 | 1,071 |
Q1 Exploration Activities
2017 Outlook
ITY MINE
Q4 Insights
Table 7: Ity Performance Indicators
For The Quarter Ended | Q1-2017 | Q4-2016 | Q1-2016 |
Tonnes ore mined, kt | 329 | 316 | 287 |
Strip ratio (incl. waste cap) | 4.44 | 3.66 | 6.31 |
Tonnes stacked, kt | 267 | 295 | 303 |
Grade, g/t | 1.90 | 2.00 | 2.53 |
Recovery rate, % | 98% | 90% | 90% |
PRODUCTION, KOZ | 16 | 17 | 22 |
Cash cost/oz | 750 | 760 | 609 |
AISC/OZ | 879 | 827 | 710 |
Q1 Exploration Activities
2017 Outlook
ITY CIL PROJECT
NZEMA MINE
Q4 Insights
Table 8: Nzema Performance Indicators
For The Quarter Ended | Q1-2017 | Q4-2016 | Q1-2016 |
Tonnes ore mined, kt | 396 | 288 | 277 |
Strip ratio (incl. waste cap) | 5.81 | 9.02 | 3.40 |
Total Tonnes milled, kt | 391 | 428 | 459 |
Grade, g/t | 2.36 | 2.20 | 1.53 |
Recovery rate, % | 88% | 82% | 86% |
PRODUCTION, KOZ | 26 | 24 | 20 |
Cash cost/oz | 834 | 956 | 1,095 |
AISC/OZ | 951 | 1,118 | 1,158 |
Q1 Exploration Activities
2017 Outlook
KARMA MINE
Full-Year 2016 Insights
Table 9: Karma Performance Indicators
For The Quarter Ended | Q1-2017 | Q4-2016 |
Tonnes ore mined, kt | 1,050 | 783 |
Strip ratio (incl. waste cap) | 3.14 | 4.14 |
Tonnes stacked, kt | 954 | 853 |
Grade, g/t | 1.07 | 1.14 |
Recovery rate, % | 87% | 90% |
PRODUCTION, KOZ | 32 | 29 |
Cash cost/oz | 661 | 657 |
AISC/OZ | 748 | 738 |
Q1 Exploration Activities
2017 Outlook
HOUNDE CONSTRUCTION REMAINS ON-TIME AND ON-BUDGET
Construction Achievement To-Date
Table 10: Remaining capital spend, in $m | |
UPFRONT PROJECT CAPITAL | 328 |
Capital spent in 2016 | (102) |
Capital spent in Q1-2017 | (58) |
Mining fleet equipment financing | (47) |
REMAINING CAPITAL SPEND | ~120 |
Exploration Activities
INCREASED NET FREE CASH FLOW FROM OPERATIONS
Table 11: Simplified Cash Flow Statement
QUARTER ENDED, | |||
(in US$ million) | MAR. 31, 2017 | MAR. 31, 2016 | |
GOLD SOLD, koz | 162 | 121 | |
Gold Price, $/oz | 1,190 | 1,192 | |
REVENUE | 193 | 144 | |
Total cash costs | (114) | (83) | |
Royalties | (10) | (7) | |
Corporate costs | (6) | (5) | |
Sustaining capex | (12) | (11) | |
Sustaining exploration | (5) | (2) | |
ALL-IN SUSTAINING COSTS ("AISC") | (147) | (107) | |
ALL-IN SUSTAINING MARGIN | 46 | 37 | |
Less: Non-sustaining capital | (7) | (4) | |
Less: Non-sustaining exploration | (7) | (1) | |
FREE CASH FLOW BEFORE GROWTH PROJECTS (and before working capital, tax & financing costs) | 32 | 32 | |
Working capital | 5 | (20) | |
Taxes paid | (1) | (3) | |
Interest paid | (0) | (0) | |
Cash settlements on hedge programs and gold collar premiums | (2) | (3) | |
NET FREE CASH FLOW FROM OPERATIONS | 34 | 5 | |
Growth projects | (69) | (3) | |
Non-mine greenfield exploration expense | (2) | (1) | |
Other (foreign exchange gains/losses and other) | (2) | (2) | |
Cash received for Youga mineral property interests (net) | - | 22 | |
Operating cash flow from Youga discontinued operation | - | 1 | |
Bridge loan advanced to True Gold | - | (15) | |
Restructuring costs | (2) | - | |
Net equity proceeds | 5 | 1 | |
Settlement of debt obligations | (1) | (1) | |
CASH INFLOW (OUTFLOW) FOR THE PERIOD | (37) | 7 |
Notes: Youga has been deconsolidated from the Net Free Cash Flow From Operations. Additional notes available in Endeavour's MD&A filed on Sedar for the referenced periods.
SOUND BALANCE SHEET AND STRONG FINANCING & LIQUIDITY SOURCES
Table 12: Net Debt Reduction, in US$m
(in US$ million) | MAR. 31, 2017 PRO-FORMA | MAR. 31, 2017 | DEC. 31, 2016 | MAR. 31, 2016 |
Cash | 135 | 87 | 124 | 117 |
Less: Equipment finance lease | (9) | (9) | (10) | (13) |
Less: Drawn portion of $350 million RCF | (140) | (140) | (140) | (240) |
NET DEBT POSITION | 14 | 62 | 26 | 136 |
NET DEBT / OPERATING EBITDA (LTM) RATIO | 0.06x | 0.27x | 0.11x | 0.89x |
ADJUSTED NET EARNINGS
Table 13: Net Earnings and Adjusted Earnings
Three months ended | |||
($ in millions except per share amounts) | Mar. 31, 2017 | Dec 31, 2016 | Mar. 31, 2016 |
TOTAL NET EARNINGS (LOSS) | (2) | (69) | 8 |
Less adjustments (see MD&A) | 16 | 109 | 4 |
ADJUSTED NET EARNINGS FROM CONTINUING OPERATIONS | 14 | 40 | 12 |
Less portion attributable to non-controlling interests | 5 | 10 | 6 |
ATTRIBUTABLE TO SHAREHOLDERS | 9 | 31 | 6 |
Divided by weighted average number of O/S shares | 94 | 93 | 59 |
ADJUSTED NET EARNINGS PER SHARE (BASIC) FROM CONTINUING OPERATIONS | 0.10 | 0.33 | 0.10 |
CONFERENCE CALL AND LIVE WEBCAST
Management will host a conference call and live webcast today at 9:00am Toronto time (EST) to discuss the Company's financial results.
The conference call and live webcast are scheduled today at:
6:00am in Vancouver
9:00am in Toronto and New York
2:00pm in London
9:00pm in Hong Kong and Perth
The live webcast can be accessed through the following link:
http://edge.media-server.com/m/p/tq785ev9
Analysts and interested investors are also invited to participate and ask questions using the dial-in numbers below:
International: +1718 354 1157
North American toll-free: 1877 280 2296
UK toll-free: 0800 279 5004
Confirmation code: 2728249
The conference call and webcast will be available for playback on Endeavour's website.
Click here to add Webcast reminder to Outlook Calendar
QUALIFIED PERSONS
Adriaan "Attie" Roux, Pr.Sci.Nat, Endeavour's Chief Operating Officer, is a Qualified Person under NI 43-101, and has reviewed and approved the technical information related to mining operations in this news release.
CONTACT INFORMATION
Martino De Ciccio VP - Strategy & Investor Relations +44 203 640 8665 mdeciccio@endeavourmining.com | DFH Public Affairs in Toronto John Vincic, Senior Advisor (416) 206-0118 x.224 jvincic@dfhpublicaffairs.com Brunswick Group LLP in London Carole Cable, Partner +44 7974 982 458 ccable@brunswickgroup.com |
ABOUT ENDEAVOUR MINING CORPORATION
Endeavour Mining is a TSX-listed intermediate gold producer, focused on developing a portfolio of high quality mines in the prolific West-African region, where it has established a solid operational and construction track record.
Endeavour is ideally positioned as the major pure West-African multi-operation gold mining company, operating 5 mines in Côte d'Ivoire (Agbaou and Ity), Burkina Faso (Karma), Mali (Tabakoto), and Ghana (Nzema). In 2017, it expects to produce between 600koz and 640koz at an AISC of US$860 to US$905/oz. Endeavour is currently building its Houndé project in Burkina Faso, which is expected to commence production in Q4-2017 and to become its flagship low-cost mine with an average annual production of 190koz at an AISC of US$709/oz over an initial 10-year mine life based on reserves. The development of the Houndé project is expected to lift Endeavour's group production +900kozpa and decrease its average AISC to circa $800/oz by 2018, while exploration aims to extend all mine lives to +10 years.
Corporate Office: 5 Young St, Kensington, London W8 5EH, UK
This news release contains "forward-looking statements" including but not limited to, statements with respect to Endeavour's plans and operating performance, the estimation of mineral reserves and resources, the timing and amount of estimated future production, costs of future production, future capital expenditures, and the success of exploration activities. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "expects", "expected", "budgeted", "forecasts", and "anticipates". Forward-looking statements, while based on management's best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the successful integration of acquisitions; risks related to international operations; risks related to general economic conditions and credit availability, actual results of current exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Endeavour operates. Although Endeavour has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Please refer to Endeavour's most recent Annual Information Form filed under its profile at www.sedar.com for further information respecting the risks affecting Endeavour and its business. AISC, all-in sustaining costs at the mine level, cash costs, operating EBITDA, all-in sustaining margin, free cash flow, net free cash flow, free cash flow per share, net debt, and adjusted earnings are non-GAAP financial performance measures with no standard meaning under IFRS, further discussed in the section Non-GAAP Measures in the most recently filed Management Discussion and Analysis.
View Appendix 1 - Production and Cost Details by Mine