Endeavour Mining Management Presentation

Transcription

1 Endeavour Mining Management Presentation September 2014 GOLD PRODUCER WEST AFRICA CASH FLOW

2 Disclaimer & Forward Looking Statements This presentation 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 forwardlooking statements. Please refer to Endeavour s most recent Annual Information Form filed under its profile at for further information respecting the risks affecting Endeavour and its business. GOLD PRODUCER WEST AFRICA CASH FLOW 2

3 Endeavour Today A West African gold producer operating four mines 2014 Production 450,000 oz pa 2014 EBITDA $150 million pa AISC $1,000 per oz 180,000 oz pa Houndé Preconstruction development continues Mining permit is expected Q Construction decision will be based on maximizing shareholder value, gold price and finance Group exploration is focused on Houndé and extending current mine lives GOLD PRODUCER WEST AFRICA CASH FLOW 3

4 West African Projects Multiple operations Open-pit and underground Contract and owner mining Gravity/CIL plants Operations management based in Accra Mali Burkina Faso Cote d Ivoire Ghana GOLD PRODUCER WEST AFRICA CASH FLOW 4

5 Historic and Potential Growth Potential for Houndé production in Q or early ,000 ozs Houndé Agbaou Tabakoto 80,000 ozs Nzema Youga e 2015e 2016e 2017e Gold Production (ozs) 0 80, , , ,000 ~450,000 ~500,000/yr plus Houndé GOLD PRODUCER WEST AFRICA CASH FLOW 5

6 2014 Achievements Production and cost guidance Based on H1, expect to be at top end of production guidance for 2014 Within AISC cost guidance Agbaou ahead of expectations Construction completed ahead of schedule and under budget Performing better than plan Tabakoto on track Tabakoto underground mine converted to owner mining in Q2 Segala underground mine commenced production in Q2 and is ramping up to full production in H2 Continuing optimization of operations expected to be complete by end Q4 Kofi road being built to provide an attractive third source of ore in 2015 Gold Bar at Tabakoto Tabakoto Underground Mining GOLD PRODUCER WEST AFRICA CASH FLOW 6

7 Agbaou A Success Story Full commercial production started January 2014 Demonstrating strong, sustained performance Produced 56,000 ozs in H1 Cash cost of $638/oz 1 Strong cash flow generator Potential to produce over 120,000 ozs in 2014 Resource definition program commenced to extend mine life Three high priority targets currently being drilled Potential extensions of West Pit Truck Fleet at Agbaou Mining on North Pit of Agbaou 1 Based on 57,519 ozs sold GOLD PRODUCER WEST AFRICA CASH FLOW 7

8 Tabakoto Mine Optimization Nears Completion Production is transitioning to sources of cheaper higher grade ore H H o Tabakoto Underground o Tabakoto Underground o Tabakoto Underground o Stockpiles o Segala Underground o Segala Underground o Djambaye Open Pit o Djambaye Open Pit o Kofi C Open Pit AISC reductions and improved cash flow are being achieved by Q2 completion of conversion to owner mining at Tabakoto underground mine Q2 start of production from Segala underground mine Additional improvements are being implemented in H2 Ramp up to full production from Segala Tailings expansion, cemented rockfill plant Processing improvements - pebble crusher and gold room improvements Closing Djambave open pit Rationalization of sub-contractors Road construction through Kofi deposits to Kofi C GOLD PRODUCER WEST AFRICA CASH FLOW 8

9 Kofi Mine Permit Received Kofi Property Mining permit received in H1 covers all 8 Kofi deposits Exploration continues to add to current Indicated 0.6 million ozs plus Inferred 0.6 million ozs 38 km haul road to Kofi C now under construction and due for completion by December 2014 Kofi C production will start at the beginning of 2015 and other Kofi deposits along road will be added later Kofi C open pit reserve grade of 4.13 g/t is an attractive third source of ore to the Tabakoto mill 1 See Appendix for details on Tabakoto-Kofi Resources and Reserves GOLD PRODUCER WEST AFRICA CASH FLOW 9

10 2014 AISC Guidance 2014 Guidance, in $/oz Mid-2014 Guidance, in $Million Gold Production Range (ozs) 400, , ,000 $/oz $Million Revenue (at $1,250) $525 Royalties $60 - $70 Royalties 27 Cash costs $775 - $825 Cash costs 336 Corporate G&A $40 - $45 Corporate G&A 17 "EBITDA" margin 145 Sustaining capital $110 - $130 Sustaining capital 50 AISC per ounce $985 - $1,070 AISC Margin $95 Q AISC of $1,021/oz was approximately 10% below Q All-in sustaining cost 2014 (AISC) guidance notes a) Royalties: Approximately 5% to 6% of assumed $1,250 gold price b) Corporate G&A: 2014 $/oz range based on $17 million budget, or approximately 3% of gold sales c) Sustaining capital of approximately $50 million is inclusive of $27 million for underground development at Tabakoto and at Segala from mid-year following commercial ore stoping and $16 million at Nzema for waste capitalization, TSF lift, deprivation of land use, and other sustaining capital investments GOLD PRODUCER WEST AFRICA CASH FLOW 10

11 Developing the Houndé Project Feasibility study completed in P Reserve 1 of 25 million tonnes at 1.95 g/t containing 1.55 million ozs 3.0 Mtpa SAG/Ball mill and Gravity/CIL 180,000 ozs per year over 8 years AISC/oz of less than $800/oz Upfront capital of $315M including owner mining fleet IRR 22.4% at $1,300/oz (post tax) Houndé FS General Site Layout Mine, Waste Dumps, and Plant Location Permitting progress continues ESIA permit received in August Mining permit expected by year end Construction Service Team is now reviewing and optimizing based on recent Agbaou construction experience 1 See Appendix for details on Houndé Reserves GOLD PRODUCER WEST AFRICA CASH FLOW 11

12 Houndé Exploration Continues Houndé Property Targets and Trends Exploration expected to further improve the project economics Targets include Parallel trends close to the Vindaloo deposits Douhoun, Grand Espoir, Bouéré and Kari Pomp to the northwest Kopoi to the northeast Vindaloo Far South, Soukou and Kari Sud zones to the south GOLD PRODUCER WEST AFRICA CASH FLOW 12

13 Summary Pushing top end of 2014 production guidance Achieved record H1 production of 228,000 ozs Q production was 16% increase in ounces Continued reductions in AISC 4% reduction in AISC/oz as compared to Q1 Benefiting from cost reduction program, Tabakoto mill expansion and from low-aisc cost of newly constructed Agbaou mine Segala commenced production in June and is ramping up to full production later in H Focus is on effectively managing our 4 mines A Houndé production decision will be taken at the appropriate time Endeavour is an excellent value proposition for gold investors GOLD PRODUCER WEST AFRICA CASH FLOW 13

14 Appendices Board of Directors Management Company Profile Operations Q Cash Cost Detail by Mine Resources and Reserves GOLD PRODUCER WEST AFRICA CASH FLOW 14

15 Board of Directors Michael Beckett, Chairman Former Chairman, Ashanti Goldfields and former MD, Consolidated Gold Fields Ian Cockerill Extensive African mining experience, Former CEO, Gold Fields Frank Giustra Founder: Wheaton River, Silver Wheaton and Pacific Rubiales; Former CEO, Yorkton Securities Ian Henderson Former Managing Director and natural resources fund manager, JP Morgan Wayne McManus Accounting professor: CPA, CFA, LLM in taxation Miguel Rodriguez Former President Venezuela Central Bank; former Governor of IMF, World Bank and IADB Neil Woodyer, CEO Founded Endeavour in 1988; former mining banker/advisor GOLD PRODUCER WEST AFRICA CASH FLOW 15

16 Management Neil Woodyer CEO Founder of Endeavour, 30+ years experience in natural resources Project financed and advised on the acquisition of over 30 mines Attie Roux COO Built / commissioned Nzema processing plant 34 years as metallurgist at AngloGold Christian Milau CFO CA and US Certified Public Accountant 18 years experience, previously treasurer of New Gold Inc Doug Bowlby EVP Corporate Development Chartered Financial Analyst with corporate finance and M&A background 18 years experience with mining transactions & growth plans Doug Reddy SVP Business Development Geologist with 30+ years exploration and mining experience Manages relationships with analysts and institutional investors Jeremy Langford EVP Construction Services Mechanical engineer with 10+ years experience Built Agbaou, Nzema and Sabodala gold mines Richard Thomas EVP Technical Services 20+ years experience in open pit and underground mining Previously VP Mining for Continental Africa for Anglogold Morgan Carroll SVP Corp. Finance/General Counsel Previously with finance group at Mayer Brown International LLP Admitted as Attorney in the State of New York, and as Solicitor in England & Wales Gérard de Hert VP Exploration Geologist with more than 14 years experience in mining and exploration in West and Central Africa GOLD PRODUCER WEST AFRICA CASH FLOW 16

17 Company Profile Share Price (August 31, 2014) Balance Sheet (June 30, 2014) Recent Share Price Market Cap CDN$0.91 AUD$0.90 CDN$376 million Cash position Drawn down from $350 million debt facility $57.5 million $300 million Av. daily shares traded for August Canada TSX:EDV Australia ASX:EVR USA OTCQX:EDVMF Capitalization Summary (August 31, 2014) 1.4 million 0.1 million 0.1 million Analyst Coverage (September 9, 2014) Argonaut Securities Adam Miethke A$1.50 BMO Capital Markets Andrew Breichmanas C$1.25 Canaccord Genuity Rahul Paul C$1.50 Shares in Issue 413,143,668 Options 30,801,435 Fully Diluted 443,945,103 Shareholder Base Institutions 60-65% Retail 25-35% Insiders/Management 3% CIBC World Markets Leon Esterhuizen C$2.00 GMP Securities Brock Salier C$1.55 Goldman Sachs Eugene King C$1.04 Haywood Securities Tara Hassan C$1.25 Pareto Securities John McClintock C$1.30 Patersons Securities Matthew Trivett A$0.75 Peel Hunt Michael Stoner C$1.18 Raymond James Chris Thompson C$1.30 UBS Jo Battershill A$0.84 Sourced from Bloomberg. Peel Hunt sourced by author. This list is provided for informational purposes only. The opinions, estimates, forecasts or any analysis do not represent opinions, forecasts or analyses of Endeavour Mining Corporation or its Management. Endeavour Mining Corporation does not by its reference above imply any endorsement of or concurrence with such opinions, estimates or forecasts. GOLD PRODUCER WEST AFRICA CASH FLOW 17

18 Tabakoto Gold Mine, Mali Tabakoto Gold Mine (80% Endeavour, 20% Mali) Kofi (84.4% Endeavour, 5.6% third-party, 10% Mali) Resources (incl. of Reserves, 100%) Reserves (100%) Processing Rate Mining Type M&I: 3.0 g/t for 1.679Mozs (~52% 4.7 g/t) Inferred: 2.6 g/t for 1.603Mozs (~59% 4.6 g/t) 3.6 g/t for 0.794Mozs (~60% 4.1 g/t) 1.4 Mtpa Gravity/CIL Plan Tabakoto (UG), Segala (UG) & Djambaye II Open Pit Mine Met. Recovery 92% - 95% Production Cash Costs ($/oz) ,301 ozs ,231 ozs 2014 H1 69,880 ozs 2014e 140,000 to 155,000 ozs $ H1 - $1, e - $790 to $840 Royalty 6% Corporate Tax 25% GOLD PRODUCER WEST AFRICA CASH FLOW 18

19 Agbaou Gold Mine, Côte d Ivoire Agbaou Gold Mine (85% Endeavour, 10% Côte d Ivoire, 5% SODEMI) Resources (incl. of Reserves, 100%) M&I: 2.3 g/t for 1.100Moz Inferred: 2.3 g/t for 0.165Moz Reserves (100%) 2.4 g/t for 0.880Moz Strip Ratio 7.9 to 1 Processing Rate Up to 1.6 Mtpa Gravity/CIL plant Met. Recovery 92.5% Mining Type Production Cash Costs ($/oz) Expected Mine Life Royalty Corporate Tax Open Pit Contractor Mining (BCM) ,132 ozs (during commissioning) 2014 H1 55,964 ozs 2014e 85,000 to 95,000 ozs 2014 H1 $ e $730 to $780 8 years from current Reserves 3% - 5% sliding scale 25% with 5 year corporate tax holiday GOLD PRODUCER WEST AFRICA CASH FLOW 19

20 Nzema Gold Mine, Ghana Nzema Gold Mine (90% Endeavour, 10% Ghana) Resources (incl. of Reserves, 100%) Reserves (100%) M&I: 1.4 g/t for 1.693Moz Inferred: 1.3 g/t for 0.313Moz 2.1 g/t for 0.602Moz Strip Ratio 4.8 to 1 (2014) Processing Rate Met. Recovery Production Cash Costs ($/oz) Expected Mine Life Royalty 1.6 to 2.1Mtpa Gravity/CIL plant 91% to 75% depending on ore type ,447 ozs ,464 ozs 2014 H1 64,433 ozs 2014e 110,000 to 120,000 ozs $ H1 - $ e $780 to $830 6 years from current Reserves 5% (+1% third-party at Adamus pits) Corporate Tax 35% GOLD PRODUCER WEST AFRICA CASH FLOW 20

21 Youga Gold Mine, Burkina Faso Youga Gold Mine (90% Endeavour; 10% Burkina Faso) Resources (incl. of Reserves, 100%) Reserves (100%) Youga & Ouaré M&I: 1.6g/t for 0.805Moz Inferred: 1.4g/t for 0.099Moz 2.0g/t for 0.265Moz Strip Ratio 3.5 to 1 (2014) Processing Rate 1.0Mtpa Gravity/CIL plant Met. Recovery 94% Production Cash Costs ($/oz) Expected Mine Life Royalty ,030 ozs ,448 ozs 2014 H1 47,002 ozs 2014e 65,000 to 70,000 ozs $ H1 - $ e $790 to $840 2 years at current grade (with potential for 5+ years with satellite deposits and Ouaré) 3% - 5% sliding scale Corporate Tax 17.5% GOLD PRODUCER WEST AFRICA CASH FLOW 21

22 Q Cash Cost Detail by Mine Tabakoto Nzema Youga Agbaou Total Mining Physicals Total tonnes mined - Open pit 000t 1,954 2,045 1,014 4,328 Total tonnes mined - Underground 000t Total ore tonnes - Open pit 000t Total ore tonnes - Underground 000t Total tonnes milled 000t Gold sold ozs 34,916 35,878 18,360 29, ,653 Unit cost analysis Mining costs - Open pit 1 $/t mined Mining costs - Underground 1 $/t ore Processing and maintenance $/t milled Site G&A $/t milled Cash cost details Mining costs - Open pit $000s $8,895 $8,439 $6,199 $12,667 $36,200 Mining costs - Underground $000s 9, ,571 Processing and maintenance $000s 12,752 7,748 5,828 4,847 31,175 Site G&A $000s 6,526 2,916 2,678 2,379 14,499 Purchased ore at Nzema $000s - 6, ,516 Inventory adjustments $000s 1,829 1, ,334 Cash costs for ounces sold $000s $39,573 $27,194 $14,746 $19,782 $101,295 Royalties $000s $2,686 $2,557 $1,055 $1,377 $7,675 Sustaining capital $000s $2,541 $3,098 $511 $312 $6,462 Cash cost per ounce sold $/oz $1,133 $758 $803 $671 $854 Mine-level AISC per ounce sold $/oz $1,283 $916 $888 $728 $973 Other costs used to derive unit mining cost Capitalized mining costs $000s $262 $1,445 Numbers may not add due to rounding 1 Includes capitalized mining costs GOLD PRODUCER WEST AFRICA CASH FLOW 22

23 Mineral Reserves as at Dec 31, 2013 Mine / Project Reserves Proven Probable Proven & Probable Gold Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Price Mt g/t k Ozs Mt g/t k Ozs Mt g/t k Ozs US$/oz Nzema 1 - Total US$ 1,350 Attributable - 90% Youga 2 - Total US$ 1,250 Attributable - 90% Agbaou 4 - Total US$ 1,350 Attributable - 85% Tabakoto 5 Kofi 5 - Total Attributable - 81% US$ 1,200-1,350 Houndé 6 - Total , ,550 US$ 1,144 Attributable - 90% 270 1,125 1,395 Total 1,450 2,641 4,091 Total Attributable 1,265 2,303 3,567 Note: Percent attributable at Tabakoto Kofi is weighted by contribution to reserves. GOLD PRODUCER WEST AFRICA CASH FLOW 23

24 Mineral Resources as at Dec 31, 2013 Mine / Project Resources (including reserves) Measured Indicated Measured & Indicated Inferred Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Lower cutoff Mt Au g/t koz Mt Au g/t koz Mt Au g/t koz Mt Au g/t koz Au g/t Nzema 1 - Total , , Attributable - 90% 1, , Youga 2 - Ouaré 3 - Total Attributable - 90% Agbaou 4 - Total , Attributable - 85% Tabakoto 5 Kofi 5 - Total , , , to 1.5 Attributable - 82% 338 1,039 1,377 1,314 Houndé 6 - Total , , Attributable - 90% 273 1,414 1, Total 2,474 4,677 7,151 2,313 Total Attributable 2,178 4,069 6,247 1,945 Note: Percent attributable at Tabakoto Kofi is weighted by contribution to resources. GOLD PRODUCER WEST AFRICA CASH FLOW 24

25 Notes to Mineral Resource and Reserves 1 Nzema Report with mineral resource update of the Adamus deposit effective November 7, 2013 prepared by N.J. Johnson (MPR Geological Consultants Pty Ltd.) and updated internal mineral reserve estimates effective December 31, 2013 prepared by M. Alyoshin (Endeavour). Most recent filed report is "Technical Report and Mineral Resource and Reserve Update for the Nzema Gold Mine, Ghana, West Africa", effective date December 31, 2012, prepared by N.J. Johnson (MPR Geological Consultants Pty Ltd.), Q. De Klerk (Cube Consulting Pty Ltd.) and W.J.A. Yeo and A.A. Roux of Endeavour. 2 Youga Report with mineral resource update for Youga Main, East, West, NTV, and Leduc deposits effective December 31, 2013 prepared by B. Diouf (Endeavour) and reviewed by K. Harris (Endeavour). Zergoré and A2NE deposit internal mineral resource estimates, prepared by AMEC under supervision of K. Woodman (Endeavour) effective December 31, Internal mineral reserve estimates effective December 31, 2013 prepared by E. Kadio Kakou under the supervision of A. de Freitas (Endeavour). Most recent filed report is "Technical Report and Update of Mineral Resources and Mineral Reserves for the Youga Gold Mine, Burkina Faso, West Africa" effective date December 31, 2010, prepared by A. de Freitas and K. Woodman of Endeavour. 3 Ouaré deposit - Resource Estimate 2012, project , dated December 31, 2012, prepared by AMEC under supervision of K. Woodman (Endeavour). 4 Agbaou Report with "Updated Mineral Resource Estimate for the Agbaou Gold Mine, Cote d'ivoire, effective August 2013" prepared by M. Wanless (SRK Consulting). Internal mineral resource update for satellite zones effective December 31, 2013 prepared by K. Harris (Endeavour). Mineral reserve update effective March 2014 prepared by M. Alyoshin (Endeavour). Most recent filed report is "Agbaou Gold Mine, Côte d'ivoire, NI Technical Report" effective date May 25, 2012, prepared by M. Wanless, H. Theart and M. Sturgeon of SRK Consulting South Africa (Pty) Ltd., N. Senior (SENET), and D. Grant-Stuart and A. Rowland of Knight Piésold (Pty) Ltd. 5 Tabakoto and Kofi are reported within Technical Report and Mineral Resource and Reserve Update for the Tabakoto Gold Mine, Mali, West Africa effective date December 31, Prepared by G. de Hert (Endeavour), K. Harris (Endeavour), M. Alyoshin (Endeavour), V. Duke (Sound Mining), A. Roux (Endeavour), E. Puritch (P&E Mining Consultants Inc.), and A. Yassa (P&E Mining Consultants Inc.). 6 Houndé Project Houndé Gold Project Burkina Faso, Feasibility Study NI Technical Report effective date October 31, Prepared by M. Zammit MAIG (Cube Consulting), M. Warren MIEAust CPEng (Lycopodium), R.M. Cheyne FAusIMM (ORELOGY), D. Morgan CPEng (Knight Piésold), P. O Bryan MAusIMM (CP) (Peter O Bryan and Associates). The following notes apply to the tables: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Tonnages are rounded to the nearest 100,000 tonnes; gold grades are rounded to one decimal place; ounces are rounded to the nearest 1,000 ounces. Rounding may result in apparent summation differences. Tonnes and grade measurements are in metric units; contained gold is in troy ounces. GOLD PRODUCER WEST AFRICA CASH FLOW 25

26 Neil Woodyer CEO Doug Reddy SVP Business Development GOLD PRODUCER WEST AFRICA CASH FLOW 26