› April 2017
Corporate Presentation
Presentation April 2017 CORPORATE PRESENTATION DISCLAIMER & - - PowerPoint PPT Presentation
Corporate Presentation April 2017 CORPORATE PRESENTATION 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
› April 2017
Corporate Presentation
DISCLAIMER & FORWARD LOOKING STATEMENTS
2
CORPORATE PRESENTATION
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 to Endeavour’s plans and
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
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
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. 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 in this presentation.
TABLE OF CONTENTS CORPORATE OVERVIEW
APPENDIX
2017 OUTLOOK
DETAILS BY MINE AND PROJECT
4
ENDEAVOUR MINING OVERVIEW
A Premier African Gold Producer With 5 Mines and 2 Projects
CORPORATE OVERVIEW
COMPANY PROFILE
5
5 10 15 20 25 30 1000000 2000000 3000000 4000000 5000000 6000000 7000000 Volume Adj Close
Share Price Performance
Rank Institution Name % of S/O 1 LA MANCHA HOLDING S.A.R.L. 28.1% 2 Van Eck Associates Corporation 13.7% 3 RBC Global Asset Management Inc. 3.3% 4 Fiera Capital Corporation 3.0% 5 M & G Investment Management Ltd. 2.9% 6 Liberty Metals & Mining Holdings, L.L.C. 2.6% 7 Ruffer LLP 2.5% 8 Sun Valley Gold, LLC 2.5% 9 Oppenheimer Funds, Inc. 2.2% 10 Maple Leaf Partners, L.L.C. 1.7%
Top Shareholders
*As of March 28, 2017
Ticker TSX:EDV Shares in Issue 93.8 m Fully Diluted 94.6 m Share price* C$24.75 Market cap* US$1,840m Net Debt (Dec 31, 2016) US$26m
Shareholder Distribution
MANAGEMENT
1%
LA MANCHA
29%
RETAIL
7%
INSTITUTIONAL
63%
Other Europe North America
In CAD
CORPORATE OVERVIEW
INVESTMENT HIGHLIGHTS
6
Endeavour offers exposure to both near and long-term growth potential, in addition to current production with an accomplished management team and a healthy balance sheet
Immediate Cashflow
from PRODUCTION
Near-Term Growth
from PROJECTS
Long-Term Upside
from EXPLORATION
CORPORATE OVERVIEW
2016 2011 2017 2012 2014 2010 2019 2015 2013 2018
$922 $884 $1 010 $1,137
Assumes Ity construction starts H1-2017 and first gold production in 2019 with Heap Leach operation ending once CIL starts
7
CLEAR PATH TO BUILD A +900KOZ PRODUCER AT ≤$800/OZ AISC
+900koz 83koz 167koz 220koz 317koz 462koz 517koz 584koz 600-640koz
Ity (CIL), Côte d’Ivoire Karma, Burkina Faso Youga, Burkina Faso Nzema, Ghana Group AISC Ity (Heap Leach), Côte d’Ivoire Houndé, Burkina Faso Agbaou, Côte d’Ivoire Tabakoto, Mali
+900koz
Annual production
10+ year
Mine life
≤800$/oz
All-in cash cost
STRATEGIC MILESTONES
FOR 2019 $860-905 <$800
CORPORATE OVERVIEW
STRATEGIC LEVERS
8
BUILDING A PREMIER AFRICAN GOLD PRODUCER
+900koz
Annual production
10+ year
Mine life
≤800$/oz
All-in cash cost
STRATEGIC OBJECTIVES
4 Strategic Levers to Achieve Objectives
CORPORATE OVERVIEW
Hands-on Management Model With Teams Close to Operations
OPERATIONAL EXCELLENCE
9
1
Sebastien de Montessus CEO & Director Adriaan “Attie” Roux
COO
Vincent Benoit
EVP CFO & Corporate Development
Patrick Bouisset
EVP Exploration & Growth
Jeremy Langford
EVP Construction Services
Morgan Carroll
EVP Corporate Finance & General Counsel
Henri de Joux
EVP People & Public Affairs
London Based Abidjan Based
FUNCTIONS:
FUNCTIONS:
All GMs Located on Site Management Focus Safety First Lean and Efficient Operations Hands-On Management Cash flow driven
CORPORATE OVERVIEW
Free Cash Flow (before growth projects, WC, tax and financing cost)
10
OPERATIONAL EXCELLENCE
Record performance and met all guidance metrics in 2016
584koz in 2016 +13% vs 2015
575koz
PRODUCTION GUIDANCE
610koz
$884/oz in 2016 (4%) vs 2015
$870/oz
AISC GUIDANCE
$920/oz
$142m 2016 +55% vs 2015
$135m
(based on mid-points)
FCF BEFORE GROWTH PROJECTS GUIDANCE
1
CORPORATE OVERVIEW
Production, on a 100% basis in koz All-in Sustaining Costs, in $/oz Cash Flow Generation Lost Time Injury Frequency Rate
11
Proven track record of meeting guidances
OPERATIONAL EXCELLENCE
1
922 1,010 1,137 884
2017 Guidance
860-905
2013 2014 2015 2016
324 466 517 584
2016 2014 2015 2013 2017 Guidance
600 - 640
Free cash flow before growth projects
(and before WC, tax, and financing costs)
Lost Time Injury Frequency Rate
(Number of LTIs in the Period X 1,000,000) / Total man hours worked for the period)
0.29
2014
1.73 0.73
2013 2015 2016
0.76
$28m
2013 2014
$85m
2016
$135m
2015
$35m
2017 Guidance
$150m
Guidance Guidance
$1,392/oz $1,264/oz $1,157/oz $1,240/oz $1,240/oz
CORPORATE OVERVIEW
12
18 19 20 1,250 8 2 3 4 5 6 7 850 1,200 650 700 750 800 1,150 900 10 950 $1,000/oz 1,050 1,100 9 16 11 12 13 14 15 17 Mako (Toro) Baomahun (Amara) Kalana (Avnel) Tri-K (Avocet) Wa-Lawra (Azumah) Fekola (B2Gold) Banfora (Gryphon) Yanfolila (Hummingbird ) Dugbe 1 (Hummingbird) Sissingue (Perseus) Yaramoko (Roxgold) Kobada (African Gold Group) Natougou (Semafo) Bouly (NordGold)Mine life, years
West African DFS Stage Projects Benchmark:
Mine life and All-in cost (including initial capex)
All-in Cash Cost, $/oz (AISC + Initial Capex)
Houndé
Significant West African Construction Expertise:
– Core construction team has successfully developed projects together for +10 years – 7 projects built, $2.4B in capex – All projects delivered on time and within budget
Bubble size represents average annual production = 100koz p.a.
Ity CIL
Houndé and Ity CIL are top tier projects
PROJECT DEVELOPMENT
2
CORPORATE OVERVIEW
13
PROJECT DEVELOPMENT
2
Life of Mine Plan › Construction started in April with first gold
pour expected in Q4-2017
› Construction is progressing on-time and on-
budget
› Procurement is nearly complete › 10-year mine life based on current reserves
+ significant exploration upside
› Average production of 190kozpa at AISC of
US$709/oz
› Capex of $328m, inclusive of $47m for
› Robust Project with after-tax IRR of +30% at
US$1,250/oz
Year 3
184koz
Year 9 to 10 Average $648/oz
223koz 218koz
Year 1 $901/oz Year 2
231koz
$645/oz Year 5 to 8 Average $662/oz
265koz
$496/oz
116koz
Year 4 $506/oz
AISC/oz Production based on reserves, koz
Houndé is positioned to be Endeavour’s flagship low cost mine
Exploration upside expected to fill this shortfall
CORPORATE OVERVIEW
14
PROJECT DEVELOPMENT
2
$898/oz Year 5 $554/oz Years 10 to 14 109koz $608/oz 133koz Year 9 $638/oz 103koz Year 8 124koz Year 7 Year 6 53koz $622/oz 150koz $582/oz Year 4 185koz Year 3 $608/oz Year 2 193koz $500/oz 134koz $409/oz Year 1 163koz $477/oz AISC/oz Production based on reserves, koz
165kozpa at AISC of US$507/oz
Long-life Low Cost Project
Robust Project Economics (based on $1,250/oz)
Significant improvement expected in H1- 2017 Feasibility Study update
Sud discoveries and Verse Ouest
Well-positioned with strong liquidity sources to take final investment decision in H1-2017
Ity CIL Feasibility Study Published in 2016
Agbaou Mine Abidjan Ity Mine
Côte d’Ivoire
CORPORATE OVERVIEW
15 15
UNLOCK EXPLORATION VALUE
Amongst Largest and Most Promising Portfolios in West Africa
3
CORPORATE OVERVIEW
16 16
UNLOCK EXPLORATION VALUE
Exploration Strategic Review Output: Low Discovery Costs
4.0-6.0Moz
Houndé Tabakoto Greater Ity Agbaou True Gold Côte d’Ivoire Regional
3
4.0-6.0Moz 2.5-3.5Moz 1.5-2.5Moz 0.5-1.5Moz 0.5-1.5Moz 0.5-1.0Moz
10-15Moz
5-year Indicated Resource Discovery Target
› Significant success over the
last 4 years
› Significant amount of data
available
› Many known targets based
results
› Exploration stopped once
project reached critical size to make investment decision
› Many known targets and
historical drill data
› On same trend as Randgold › Limited exploration
expenses have caused mine life to be short
› New discoveries made in
2016 with strong targets for 2017+
› Limited exploration (mainly
focused on converting inferred)
› Focus on pit extensions and
parallel trends
› Targets backed by geochem
anomolies
› Previously owned by junior
with lack of fund for exploration
› North Kao already added 2.5
years of mine life
› Many near mill targets › One of the largest
exploration tenements in the country
› Several advanced
exploration targets based
Note: See Investor Day Presentation on EDV website for full details. Based on average gold grade of 2.0-3.5g/t for Greater Ity, 1.8-2.5g/t for Houndé, 2.0-4.0g/t for Tabakoto, 1.0-1.5g/t for TrueGold and 1.5-3.0g/t for Côte d’Ivoire regional. The potential quantity of ounces is conceptual in nature since there has been insufficient exploration to define a mineral resource and since it is uncertain if exploration will result in the targets being delineated as a mineral resource.
CORPORATE OVERVIEW
UNLOCK EXPLORATION VALUE
17 17
Annual budget
Anticipated average discovery costs Exploration Strategic Review Output: Low Discovery Costs
$10m $15m $25m $30m $45m $55m $13/oz $20/oz $25/oz $15/oz $15/oz $11/oz
Côte d’Ivoire Regional True Gold Agbaou Greater Ity Houndé Tabakoto Exploration budget Average discovery cost
3
CORPORATE OVERVIEW
18
UNLOCK EXPLORATION VALUE
Exploration Strategic Review Output: What are the priorities?
Corporate Presentation
22% 23% 2017 100% 8% 13% 25% 18% 13% 23% 26% 43% 7% 12% 4% 27% 6% 2020 100% 13% 9% 35% 6% 2019 100% 10% 4% 20% 21% 3% 2021 100% 2% 20% 2018 100% 7% 35% 25% 20% Tabakoto Agbaou Regional CI Karma and Regional Hounde Ity
3
PRIORITIES:
i. Tabakoto due to its short mine life ii. Agbaou to extend oxide mine life iii. Ity to extend HL and Improve CIL case iv. Houndé (once in production) to maintain 250kozpa level after 4th year
PRIORITIES:
i. Ity Greater Area ii. Houndé to prolong mine life iii. Tabakoto and Agabou exploration will be success driven
Increase Overall Quality of our Portfolio
19
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 $900/oz $1,200/oz $950/oz $1,000/oz $1,050/oz $1,100/oz $1,150/oz $850/oz $750/oz $700/oz $650/oz $600/oz $550/oz $500/oz $450/oz $800/oz Mine life, years
SOLD
Agbaou
(175-180koz)Nzema
(100-110koz)Tabakoto
(150-160koz)AISC, US$/oz
Ity HL
(75-80koz)Ity CIL
165koz starting 2019
Karma
(100-110koz)Bubble size represents production Côte d’Ivoire Burkina Faso Ghana Mali Possibility to run HL in parallel Youga
Houndé
+250koz starting Q4-2017
Cut-back
PORTFOLIO & BALANCE SHEET MANAGEMENT
4
CORPORATE OVERVIEW
20
PORTFOLIO & BALANCE SHEET MANAGEMENT
Well Positioning Ourselves Against Our Peers
4
1,050 17 1,100 14 16 13 12 11 10 9 8 7 6 5 4 950 900 850 700 650 750 800 1,000 600 18 15AISC, $/oz
AngloGold Ashanti Endeavour 2016A Endeavour 2015A Asanko Teranga Semafo Resolute Randgold Golden Star Gold Fields Perseus NordgoldAverage mine life, years
Newmont Newcrest Kinross IAMGOLDBubble size represents production
Endeavour (output of strategic exploration review) Source: UBS Research, based on 2015A only West-Africa production. Mine life excludes expansion and development projects such as Kinross’ Tasiast Phase 2 and Resolute’s UG project Asanko based on 2017 guidance
Benchmark of West-African Producers
CORPORATE OVERVIEW
INSIGHTS
› Strong liquidity and financing sources to fund remaining
Houndé capex spend of approx. $180m
› Further headroom potential to fund exploration and Ity
CIL with free cash flow
INSIGHTS
› $65m cash injection from La Mancha in May 2016
following the True Gold transaction close
› $104m of net proceeds from bought deal in July 2016 › FCF of $142m (before growth projects, WC, tax and financing cost)
Net debt = Cash less drawn RCF, leases & drawn equipment financing RCF of $350 million, maturity date March 2020, semi-annual reductions commencing September 2018, annual interest based on LIBOR + a 3.75% to 5.75% margin
21
$26m
2014 (year-end) 2015 (year-end)
$144m
2016 (year-end)
$254m
Net Debt to trailing 12-month Operating EBITDA ratio Net debt
$210m
Undrawn RCF
$124m
Cash Position
$334m
As of Dec 31st, 2016
Liquidity and Financing Sources Net Debt Reduction
1.8x 1.0x
0.1x
PORTFOLIO & BALANCE SHEET MANAGEMENT
4
Healthy financial structure to fund growth
CORPORATE OVERVIEW
Well positioned to fund growth
Strong Liquidity Sources and Cash Flow generation to fund internal growth
As of end December 2016
22
Objective to keep leverage in a maximum range of 0.5x-1.0x
$124m $210m ~$480m Ity Equipment Financing (expected) ~$300m
Liquidity Sources
Existing cash balance Remaining Houndé project costs
Funding requirements
Undrawn RCF Ity CIL project costs ~$180m
Potential liquidity buffer (@ $1,250/oz)
mine operations 2017-2018 including Houndé start in Q4 2017 (@$1,250/oz)
1,400/oz) covering c. 50% of production from Apr 16 to June 2017 protects cash flows while Houndé is being built
Room to manoeuvre between debt and
PORTFOLIO & BALANCE SHEET MANAGEMENT
4
CORPORATE OVERVIEW
KEY 2016 ACHIEVEMENTS
23
RESET STRATEGY
› 5-year strategy validated by the board › Focused on improve the quality of our portfolio, with mines with AISC <$850/oz and mine life +10 years › 4 key pillars: 1) Operational Excellence, 2) Project Development, 3) Unlock Exploration, 4) Portfolio &
Balance Sheet Management
STREAMLINE ORGANIZATION
› Streamlining Excom from 10 to 7 › 3 Operational Pillars in Abidjan (Ops – Projects – Explo) › Re-group all corporate offices in London office (Monaco, Vancouver, Paris)
IMPROVE GOVERNANCE
› New CEO appointed in June 2016 › Board reorganization with 3 departures and 4 new arrivals (2 La Mancha + 2 independent) › Additional governance improvements under consideration
MANAGE PORTFOLIO
› Dynamic portfolio management to improve quality of asset base › Youga sold in March (end of life, high cost operation) › Karma acquired in April (Long mine life, low-cost operation) › Houndé construction launched and Ity DFS published
DELEVERAGE BALANCE SHEET
› US$230m additional equity injection which includes La Mancha deal (c.$65m), La Mancha anti-dilution
right in True Gold deal (c.$63m) and successful equity raise (c.US$110m) and cash flow generation
› Net Debt positon reduced to US$25m
IMPROVE INVESTOR RELATIONS
› Clarified equity story › Increased management presence and marketing › Improved transparency
CORPORATE OVERVIEW
UPCOMING CATALYSTS
24
Immediate Cashflow
from Production
Near-Term Growth
from Projects
Long-Term Upside
from Exploration 2017 OUTLOOK:
› Gold production expected to increase to 600-640koz (excluding Houndé) › AISC expected to decrease further to $860-905/oz › Free Cash Flow (before growth projects, WC, tax and financing cost) expected to increase to $150m,
based on the 2016 realized gold price of circa $1,240/oz
› Q2-2017: Ity CIL Resource/Reserve update along with an engineering optimization study › H1-2017: Ity ownership discussions and investment decision › Mid-2017: Karma mill front-end optimization › Q4-2017: Houndé first gold pour › DELIVERY OF 5-YEAR EXPLORATION STRATEGY: Target of Finding 10-15Moz of Indicated Resources › Mid-2017: Maiden resource at Tabakoto’s Fougala and Kreko targets › H2-2017: Completion of Agbaou drilling program (first phase) › H2-2017: Maiden resource at Ity’s Le Plaque target and infill and extension drilling program update › H2-2017: Completion of drilling on Karma’s near-mill Rambo West and Yabonsgo targets › H2-2017: Houndé exploration results following drilling re-launch
CORPORATE OVERVIEW
TABLE OF CONTENTS STRATEGIC OVERVIEW
APPENDIX
2017 OUTLOOK
DETAILS BY MINE AND PROJECT
Production Guidance, koz
INSIGHTS:
› Production is expected to increase in
2017 as improvements at Karma and Nzema are expected to more than compensate for Agbaou returning to a normalized production level after a record-breaking year.
› As was the case in 2016, production
is expected to fluctuate throughout the year due to mine plan sequences, with a peak towards the middle of the year.
› Group AISC is expected to continue
to decrease due to the full year benefit of Karma, optimizations at Nzema and Tabakoto, and cost reduction programs.
AISC Guidance, $/oz
2017 GUIDANCE
Production is expected to increase and AISC to decrease
2016 ACTUAL 2017 GUIDANCE Agbaou 195,505 175,000
Tabakoto 162,817 150,000
Nzema 87,710 100,000
Ity 75,867 75,000
Karma
61,813 100,000
GROUP-WIDE PRODUCTION 583,712 600,000
In US$/oz
2016 ACTUAL 2017 GUIDANCE Agbaou
534
660
Tabakoto
1,027
950
Nzema
1,167
895
Ity
756
740
Karma
738
750
MINE-LEVEL AISC
820
800
Corporate G&A
46
37
Sustaining exploration
18
23
GROUP AISC
884
860
26
26
2017 Guidance
Capital and Exploration Spend Guidance, $m
INSIGHTS:
› Due to the expected increased production
and lower AISC, the Free Cash Flow before growth projects (and before working capital movement, tax and financing costs) is projected to increase by approximately $15 million to circa $150 million, based on the 2016 realized gold price of circa $1,240/oz, and using the mid-point of 2017 production and AISC/oz guidance ranges
› Within our collar gold price boundaries of
$1,200/oz to $1,400/oz, the Free Cash Flow variation to each $100/oz fluctuation is roughly $60 million. With the Gold Revenue Protection program, if the gold price were to drop below $1,200/oz in 2017, this fluctuation is reduced to roughly $40 million per $100/oz change.
2017 GUIDANCE
Free cash flow expected to increase
27
Free Cash Flow Guidance, $m
in US$m$1,100/oz $1,200/oz $1,300/oz
NET REVENUE (based on production guidance mid-point)
685 725 785
Mine level AISC (based on AISC guidance mid-point)
(510) (510) (510)
Corporate G&A
(21) (21) (21)
Sustaining exploration
(14) (14) (14)
GROUP AISC MARGIN
140 180 240
Non-sustaining mine exploration
(20) (20) (20)
Non-sustaining capital
(35) (35) (35)
FREE CASH FLOW BEFORE GROWTH PROJECTS
(Mine cash flow less corporate costs before WC, tax and financing cost)85 125 185
In US$mSustaining Capital Non-Sustaining Capital Growth Projects Agbaou 20
20
5 12
10 4 10 Karma 10 19 35 Houndé
Total 65 35 225
2017 Guidance
Exploration Guidance, $m Agbaou 7 Tabakoto 9 Ity 10 Karma 4 Houndé 5 Exploration Expenditures for Mines 35 Grassroots exploration expense 5 Total Exploration Expenditures 40
TABLE OF CONTENTS STRATEGIC OVERVIEW
APPENDIX
2017 OUTLOOK
DETAILS BY MINE AND PROJECT
AGBAOU MINE, COTE D’IVOIRE
Overview
AGBAOU MINE
Côte d’Ivoire
QUICK FACTS (ON 100% BASIS)
Ownership 85% EDV, 10% Côte d’Ivoire, 5% SODEMI Resources (incl. of Reserves) M&I: 13.0Mt @ 2.4 g/t for 1.004Moz Inferred: 1.1Mt @ 1.7 g/t for 0.060Moz Reserves 11.0Mt @ 2.4 g/t for 0.853Moz Processing Rate Up to 2.6 Mtpa Gravity/CIL plant - oxides; 1.6 Mtpa fresh Open Pit Strip Ratio 8.1 to 1 (2016A) Gold Recovery Achieving 95% at present; 92.5% design Mining Type Open Pit – Contractor Mining Production AISC (mine-level) 2014A– $621/oz 2015A – $576/oz 2016A – $534/oz 2017E - $660-700/oz Expected Mine Life 7 years from current Reserves Royalty 3% - 5% sliding scale Corporate Tax 25% (5 year corporate tax holiday)
2017E 2015A 181koz 147koz 196koz 175-180 koz 2014A 2016Agbaou Mine Abidjan Ity Mine
29 RECENT AND UPCOMING CATALYSTS
Accomplished
Upcoming
50% of tonnes processed
AGBAOU MINE, COTE D’IVOIRE
Record 2016 performance
30
Production and AISC 2016 vs 2015 INSIGHTS
› Production benefited from higher grades and
continued mill over-performance
› The secondary crusher (commissioned in mid-
2016 ahead of schedule and under-budget) provides the flexibility to process higher grade transitional ore while maintaining a fairly constant
2017 OUTLOOK
› After achieving an exceptional year, Agbaou is
expected to return to a more normalized and sustainable production rate of 175-180koz in 2017 with fresh ore representing up to 50% of tonnes processed
› AISC is expected to remain competitive, at $660-
700/oz, as higher grade transitional ore is expected to compensate for increased unit costs and lower throughput
2017 Production 175-180koz 2016 Production 196koz
Δ Recovery Rate Δ Grade Processed Δ Tonnes Processed
2015 Production 181koz $576/oz $534/oz $660-700/oz
AGBAOU MINE
AGBAOU MINE, COTE D’IVOIRE
Exploration program is still on-going
31
INSIGHTS
› The ongoing exploration campaign, which
commenced in April 2016 is expected to be completed in H2-2017
› Campaign based on previous geophysics and
soil geochemistry results, is focused on:
‒ North pit and South pit extensions ‒ Agbaou South target ‒ Niafouta target ‒ Generating targets beyond the current resource boundaries
› Initial drill results suggest the extension of
mineralized zones
› An update to the reserves and resources will
be made following the completion of the program in H2-2017
› An exploration budget of $7 million has been
planned for 2017, totaling approximately 45,000 meters of drilling
Agbaou Site Map
AGBAOU MINE
32
AGBAOU MINE, COTE D’IVOIRE
Numerous gold in soil anomalies over Mag > 50 ppb
AGBAOU MINE
33
AGBAOU MINE, COTE D’IVOIRE
5 year exploration targets
Auger & RC drilling
AGBAOU MINE
AGBAOU MINE, COTE D’IVOIRE
Exploration strategy
34
› 2013-2015 : Successful Drilling limited to infill drilling and immediate trend
extension to renew resources and compensate for reserves depletion. As such, no preparation of future targets was done (nearly no inferred left)
› Current drill program is focused on new targets and definition of new inferred
resources to be converted in 2017/2018 into indicated resources & reserves
› Known targets on the Agbaou Exploitation license have the potential to replace
the production for a few additional years
› A brownfield exploration campaign of targets located in Agbaou Exploration
License (at less than 20 km of the Agbaou mill) has started in 2016. Any new deposit discovered on this license also has the potential to further extend the mine life Targeting discovery of between 0.5 to 1.5 Moz at an average cost of $25/oz over the next 5 years with a budget of ~$25M to extend mine life to 10 years*
*Targeting to discover between 0.5 to 1.5 Moz with average grade between 2 and 3 g/t Au. The potential quantity of ounces is conceptual in nature since there has been insufficient exploration to define a mineral resource and since it is uncertain if exploration will result in the targets being delineated as a mineral resource.
AGBAOU MINE
TABAKOTO MINE, MALI
Overview
35 TABAKOTO MINE QUICK FACTS (ON 100% BASIS)
Ownership 80-90% Endeavour depending on pit, remainder government of Mali Resources (incl. of Reserves) M&I: 19.0Mt @ 3.0 g/t for 1.844Moz Inferred: 8.2Mt @ 3.5 g/t for 0.908Moz Reserves 6.3Mt @ 3.1 g/t for 0.615Moz Open Pit Strip Ratio 10.4 to 1 (2016A) Processing Rate 1.4 Mtpa Gravity/CIL Plan Gold Recovery 92% - 95% Mining Type Tabakoto (UG), Segala (UG) & Kofi C Open Pit Mine Production AISC (mine-level) 2014A– $1,335/oz 2015A –$1,067/oz 2016A – $1,027/oz 2017E - $950-990/oz Expected Mine Life 4+ years from current Reserves Royalty 6% Corporate Tax 30%
150-160koz 2016A 2015A 2017E 2014A 163 koz 152koz 127kozTabakoto Mine Bamako
Mali
RECENT AND UPCOMING CATALYSTS
Accomplished
Upcoming
procurement, fleet replacement and improvement equipment availability and mining efficiency
36
TABAKOTO MINE, MALI
Significant continued improvement in AISC
2016 vs 2015 Insights
› Production lifted by Increased overall grade and
recovery rate
› Improved open pit extraction (+24%) mainly due to
› Increased mine efficiency (up 10%) mostly due to an
improvement on the reef development and fleet availability
› Significant G&A costs per tonne reduction of 18%
due to on-going cost reduction program
2017 Outlook
› Production is expected to slightly decrease in 2017 to
150-160koz as grades are expected to slightly decrease due to open pit mining transitioning from Kofi C to Kofi B in the second half of the year, and underground mining sequence.
› AISC expected to decrease to $950-990/oz with cost
reduction programs
Production and AISC
2017 Production 150-160koz 2016 Production 163koz
Δ Recovery Rate Δ Grade Processed Δ Tonnes Processed
2015 Production 152koz
$1,067/oz
$1,027/oz
$950-990/oz TABAKOTO MINE
Tabakoto Site Map
37
TABAKOTO MINE, MALI
New discoveries made in 2016
Tabakoto Site Map
Kreko Fougala
NEW DISCOVERIES MADE IN 2016 INCLUDE:
› Tabakoto North Open Pit, confirming the continuation
between Tabakoto and Dar Salam, already added ~50koz in 2016 with additional drilling to start in Q1-2017 around Kofi C
› Fougala and Kreko open-pit targets, located less than
7km away from Tabakoto facilities. Will be delineated early Q1 2017 with the target of delivering new maiden resources by mid-2017
› Underground M&I resources grew by 76koz (inclusive of
depletion). In addition, underground exploration programs allowed the discovery of new vein sets that will be delineated in 2017
2017 Outlook
› Tabakoto is a top exploration priority in 2017 given its
relatively short mine life and significant potential
› $9 million exploration program totaling approximately
72,000 meters of drilling has been planned for 2017
› Focus on both surface exploration, with the aim of
delineating resources within trucking distance at discoveries made in 2016 and on new targets, and underground drilling
Kofi North
TABAKOTO MINE
38
Côte d’Ivoire
TABAKOTO MINE, MALI
Surface target priority ranking
75 targets identifIed, 7 Priority 1 (2017) Areas under transported cover identifIed
TABAKOTO MINE
39
Côte d’Ivoire
TABAKOTO MINE, MALI
Kofi land package main target area
TABAKOTO MINE
40
Targeting discovery of between 1.5 to 2.5 Moz at an average cost of $15/oz
› Main focus is on finding new additional open pit resources within a short distance to the
Tabakoto mill within within18 to 24 months to replace Kofi C and further Kofi B/A Linear/ Betea production while pursuing exploration near Kofi C/B/A
› Aggressive Tabakoto surface exploration was initiated at mid-2016 (Ongoing Kreko and
Fougala trend exploration)
› Ongoing large exploration program over Kofi Blocks › Due to its “on trend” position with Loulo type deposits, we will be targeting a new large
discovery in Kofi North, along this trend with the potential be a standalone operation since it is located more than 40 km away from Tabakoto facilities
› While proven continuation at-depth, a prudent evaluation of the underground potential as
been set at 200-300koz for the next 2-3 years. Afterwards, although mineralizations continue at depth, additional exploration will be based on economic viability of the production
TABAKOTO MINE, MALI Exploration strategy
*Targeting to discover between 1.5 to 2.5 Moz with average grade between 2 and 4 g/t Au. The potential quantity of ounces is conceptual in nature since there has been insufficient exploration to define a mineral resource and since it is uncertain if exploration will result in the targets being delineated as a mineral resource.
TABAKOTO MINE
ITY MINE, CÔTE D’IVOIRE
Overview
QUICK FACTS (ON 100% BASIS)
Ownership 55% EDV, 30% SODEMI, 10% Côte d’Ivoire, 5% private Resources (HL + CIL) (incl. of Reserves) M&I: 52.8Mt @ 1.6 g/t for 2.779Moz Inferred: 30.2Mt @ 1.5 g/t for 1.406Moz Reserves (HL+CIL) 43.9Mt @ 1.5 g/t for 2.123Moz Open Pit Strip Ratio 4.2 to 1 (2016A) Processing Rate 950ktpa HL Gold Recovery 81% Mining Type Open pit / Heap Leach Production AISC (mine-level) 2016A – $756/oz 2017E - $740-780/oz Mine life 3 years from current Reserves + addition potential Royalty 3% - 5% sliding scale Corporate Tax 25%
81koz 2015A 76koz 2017E 75-80koz 2016AAgbaou Mine Abidjan Ity Mine
Côte d’Ivoire
RECENT AND UPCOMING CATALYSTS
Accomplished
core low-cost asset Upcoming
years remains under review
41 ITY MINE
ITY HEAP LEACH MINE, CÔTE D’IVOIRE
2016 Production Remained Flat Despite Lower Grades
42
2016 VS 2015 INSIGHTS
› Production remained relatively flat as lower
grade was offset by increased ore stacked thanks to new pit made available
› Continued high recovery rate › Heap leach mine life extended by 2 years
(2016 depletion fully replaced + added 78koz) while preparing the CIL Project 2017 OUTLOOK
› Production is expected to remain stable in
2017, at 75-80koz while AISC is expected to slightly decrease to $740-780/oz due to higher grades
› The possibility of running the CIL and Heap
leaching operations in parallel for the first few years is currently under analysis
Δ Tonnes Stacked
2017 Production 75-80koz
Δ Recovery Rate
2016 Production
Δ Grade Stacked
2015 Production 81koz 76koz $756/oz $740-780/oz $619/oz
Production and AISC
ITY MINE
ITY MINE, CÔTE D’IVOIRE
Exploration added 515koz in 2016 and outlined new targets
43
NEW DISCOVERIES MADE IN 2016 INCLUDE:
›
Bakatouo and Colline Sud discoveries (515koz of M&I resources) with additional infill and extension drilling initiated in Q4-2016
›
Several targets confirmed mineralization
›
Drilling started on the Le Plaque target (100% EDV owned) in November 2016. Le Plaque will be delineated in 2017, with a maiden resource expected in H2-2017
2017 OUTLOOK ›
The largest portion of Endeavour’s 2017 exploration budget has been allocated to the Ity area in light of its strong prospectivity and potential to further extend the lives of the CIL project and Heap Leach operations.
›
A $10 million exploration program totaling approximately 50,000 meters has been planned for 2017
›
Exploration in 2017 focused on: ‒ Infill drilling and extension drilling at the Daapleu Mont Ity, Bakatouo and Colline Sud deposits ‒ Drilling on Le Plaque and other targets ‒ Conducting initial drilling campaigns on strong Auger anomalies such as the Yacetouo and Vavoua targets
Ity Mine Drilling Targets
ITY MINE
44
$898/oz Year 5 $554/oz Years 10 to 14 109koz $608/oz 133koz Year 9 $638/oz 103koz Year 8 124koz Year 7 Year 6 53koz $622/oz 150koz $582/oz Year 4 185koz Year 3 $608/oz Year 2 193koz $500/oz 134koz $409/oz Year 1 163koz $477/oz AISC/oz Production based on reserves, koz
165kozpa at AISC of US$507/oz
Long-life Low Cost Project
› Long 14-year reserves mine life › Low AISC of $507/oz over first 9 years › Solid production of 144kozpa over first 9 years
Robust Project Economics (based on $1,250/oz)
› After-tax IRR of 36% › After-tax NPV5% of $411m › Quick payback of 2.1 years
Significant improvement expected in H1- 2017 Feasibility Study update
› Inclusion of the recent high-grade Bakatouo and Colline
Sud discoveries and Verse Ouest
› Additional Resource conversion at Daapleu and Mont Ity
Well-positioned with strong liquidity sources to take final investment decision in H1-2017
Agbaou Mine Abidjan Ity Mine
Côte d’Ivoire
ITY MINE, CÔTE D’IVOIRE
Ity CIL Feasibility Study Published in 2016
ITY MINE
Ity CIL Project DFS highlights
ITY MINE, CÔTE D’IVOIRE
Summary of independent feasibility study for CIL Project
Source: Ity CIL Feasibility Study
45
LIFE OF MINE PRODUCTION Strip ratio, w:o 2.1 Tonnes of ore processed, Mt 41.0 Mt Grade processed, Au g/t 1.42 g/t Gold content processed, Moz 1.88Moz Gold recovery, % 83% Gold production, Moz 1.56Moz Mine life, years 14 years Average annual gold production, koz 114Koz AISC, $/oz $603 CAPITAL COST Upfront capital cost, $m $282m Equipment lease $25m ECONOMIC RETURNS BASE ON US$1,250/OZ After-tax Project NPV5%,$m 411 After-tax Project IRR, % 36% Payback, years 2.1 Lead Consultant: Contributions from:
Independent CIL Feasibility Study prepared by:
ITY MINE
Feasibility Study Optimization to Include:
‒ Recent high-grade Bakatouo and Colline Sud discoveries ‒ Verse Ouest following recently completed infill drilling program ‒ Additional Resource conversion at Daapleu and Mont Ity based on planned infill drilling program
Significant opportunity to delineate additional resources at known deposits and make new discoveries
ITY CIL PROJECT, CÔTE D’IVOIRE
Feasibility Study to be optimized in Q2-2017
46
Deposits to be added in the study
ITY MINE
POTENTIAL INCLUDES:
‒ The recently discovered Bakatouo and Colline Sud deposits and the results from the ongoing 11,700 meter reverse-circulation (“RC”) and diamond-drilling (“DD”) program to test their extensions and conduct infill drilling ‒ Further resource conversion potential on both Daapleu and Mont Ity following the completion of the planned 33,000 meter in-fill drilling program ‒ Inclusion of Verse Ouest following the recent completion of the in-fill drilling program
ITY CIL PROJECT, CÔTE D’IVOIRE
47
ADDITIONAL POTENTIAL FOR RESOURCE CONVERSION
PROBABLE RESERVES INDICATED RESOURCES INFERRED RESOURCES Tonnage Grade Content Tonnage Grade Content Tonnage Grade Content
Deposits on a 100% basis. Resources are inclusive of reserves
(Mt) (Au g/t) (Au koz) (Mt) (Au g/t) (Au koz) (Mt) (Au g/t) (Au koz) Open Pits Daapleu 19.3 1.51 936 19.9 1.51 965 4.3 1.15 160 Mont Ity / Ity Flat 3.8 2.19 268 7.5 2.19 527 11.1 1.92 684 Gbeitouo 2.6 1.35 112 2.9 1.35 124 0.3 1.48 13 Walter 1.9 1.22 73 2.1 1.21 81 0.7 1.32 28 Zia NE 4.8 1.24 192 7.7 1.31 325 4.0 1.39 179 Bakatouo
3.07 475 0.8 2.86 70 Colline Sud
2.13 40 0.5 2.53 38 Total Open Pits 32.4 1.52 1,580 45.4 1.73 2,537 21.7 1.68 1,172 Existing Stockpiles Aires 5.8 1.09 202 5.8 1.09 202 0.2 0.78 6 Teckraie 2.8 1.07 97 2.8 1.07 97 0.1 0.55 2 Verse Ouest
0.85 230 Total Stockpiles 8.6 1.08 300 8.6 1.08 300 8.7 0.85 238 TOTAL 41.0 1.42 1,880 54.1 1.63 2,837 30.4 1.44 1,410 ITY MINE
ITY CIL PROJECT, CÔTE D’IVOIRE
New High Quality Near Mine Exploration Targets
48 ITY MINE
ITY CIL PROJECT, CÔTE D’IVOIRE
Greater Ity: 2017-2021 Exploration Program in Tiepleu/Floleu
49 ITY MINE
INSIGHTS ‒ Endeavour consolidated an 80km underexplored Birimian corridor on-trend with its Ity mine in Côte d’Ivoire ‒ Significantly increased its holdings in the Ity district from 178km² to 664km2. ‒ The new Floleu (104km2) and Toulepleu (382km2) exploration tenements were obtained on a 100%
‒ The previously 55%-held Tiepleu tenement (153km2) was re-obtained on a 100% basis. ‒ An auger drilling program will be conducted on the 80km underexplored portion corridor along the Ity trend in 2017
ITY CIL PROJECT, CÔTE D’IVOIRE
80km underexplored Birimian corridor
Ity Mine Birimian corridor
50 ITY MINE
ITY CIL PROJECT, CÔTE D’IVOIRE
Greater Ity Regional Gold in Soil (> 100 ppb) Anomalies
51
Birrimian meta sediments and green belt Gnamapleu Granite-Gneiss No Geochemical data at all No Exploration Historical Sparse 400x100m Grid on PR462 Except on few selected targets PR558 Le Plaque Area Several Targets GBAMPLEU Mt BA Area Several targets GUEYA area Several targets PR609 East Cavally Several Targets
ITY MINE
ITY CIL PROJECT, CÔTE D’IVOIRE
Greater Ity: 2017 – 2021 Exploration Targets Toulepleu
52
Auger drilling RC drilling
ITY MINE
ITY CIL PROJECT, CÔTE D’IVOIRE
How significant is Greater Ity area?
53
EDV Controlled Greater ITY TREND SEMAFO Controlled MANA TREND
ITY MINE
ITY MINE, CÔTE D’IVOIRE
Exploration strategy
54
*Targeting to discover between 4 to 6 Moz with average grade between 2.0 and 3.5 g/t Au. The potential quantity of ounces is conceptual in nature since there has been insufficient exploration to define a mineral resource and since it is uncertain if exploration will result in the targets being delineated as a mineral resource.
› Numerous high Potential targets have been identified within the Greater Ity area › The whole controlled 80 km trend will be covered by an airborne geophysical survey
for target generation in late 2016 (Mag/Spectro/VTEM ~700 Km2)
› The exploration blocks contiguous with Ity Exploitation license have the potential for
multi-millions ounce deposits or group of deposits which may constitute future stand alone operations (heap leach and or CIL)
› While Endeavour controls some 700 km² of Birimian grounds with similar geology
around Ity, the targeted new ounces only represent the same number of ounces that have been already produced and discovered over the 35 km² of the mine present footprint. Targeting discovery of between 4 to 6 Moz at an average cost of $11/oz
ITY MINE
NZEMA MINE, GHANA
Overview
QUICK FACTS (ON 100% BASIS)
Ownership 90% EDV, 10% government of Ghana Resources (incl. of Reserves) M&I: 33.1Mt @ 1.S g/t for 1.431Moz Inferred: 5.9Mt @ 1.3 g/t for 0.243Moz Reserves 3.3Mt @ 2.7 g/t for 0.291Moz Open Pit Strip Ratio 8.3 to 1 (2016A) Processing Rate 1.6 Mtpa Gravity/CIL plant Gold Recovery 91% to 75% depending on ore type Mining Type Open Pit – Contractor Mining Production AISC (mine-level) 2014A– $1,036/oz 2015A – $1,064/oz 2016A – $1,167/oz 2017E - $895 -940/oz Expected Mine Life 4 years from current Reserves Royalty 5% (+1% 3rd party at Adamus pits) Corporate Tax 35%
2017E 2015A 2016A 2014A 110koz 100-110koz 115koz 88kozAccra Nzema Mine
Ghana
RECENT AND UPCOMING CATALYSTS
Accomplished
improve the mine’s economics, operating margins and in the preservation of the mine’s reserves in-situ Upcoming
55
NZEMA MINE
NZEMA MINE, GHANA
Cut-back expected to improve AISC in 2017
56
2016 INSIGHTS
› 2016 was a transitional year for Nzema as ore feed
was constrained to low grade ore mined and stockpiles, supplemented by purchased ore feed
› The 19% decrease in purchased ore grade and 7%
decrease in purchased ore throughput was the key driver in the 20% reduction in gold production 2017 OUTLOOK
› Following the cutback, Nzema is expected to
generate healthy cash flows for the coming years
› As a result of the higher expected grades from the
Adamus pit following the cut-back, production is expected to increase to 100-110koz in 2017 while AISC are expected to decrease to $895-940/oz
› To complement production from the Adamus pit,
pre-stripping at the Bokrobo deposit is expected to start in the second half of the year
Production and AISC
Δ Grade Processed
2015 Production 110koz
Δ Tonnes Processed
100-110koz 2017 Production 88koz 2016 Production
Δ Recovery Rate
$1,064/oz $1,167/oz
$895
NZEMA MINE
KARMA MINE, BURKINA FASO
Overview
57
KARMA MINE QUICK FACTS (ON 100% BASIS)
Ownership 90% EDV, 10% Burkina Faso Resources (incl. of Reserves) M&I: 84.3Mt @ 1.1 g/t for 2.981Moz Inferred: 19.3Mt @ 1.3 g/t for 0.791Moz Reserves 37.9Mt @ 0.9 g/t for 1.117Moz Processing Rate 4.0mtpa Heap Leach Gold Recovery 87% Mining Type Shallow open pit and free digging material with no blasting required, low strip ratio Production AISC (Mine-level) 2016A – $738/oz 2017E - $750 -780/oz Mine life 8 years mine life based on reserves + 2.5 years from North Kao deposit (inferred resource) Tax regime 3% - 5% sliding scale royalty / 17.5% Corporate tax
100-110koz 62koz 2016A 2017EHoundé Project Ouagadougou Karma Project
RECENT AND UPCOMING CATALYSTS
Accomplished
Upcoming
KARMA MINE
KARMA, BURKINA FASO
Continuing to Ramp-up
58
Process throughput continues to ramp-up Producing at a run-rate of 100-110koz per annum
Q4-2016 INSIGHTS
› Commercial production was declared on October 1,
2016
› Production continued to ramp up as the higher grade
Rambo pit complemented ore feed from the GG2 pit and stacking capacity continued to improve 2017 OUTLOOK
› Production in 2017 is expected to increase to 100-
110koz as higher grade Rambo ore feed will complement that of the GG2 pit with contribution from the Kao pit in the later portion of the year. In addition, stacking capacity is expected to increase in the second half of the year following the completion
› AISC are expected to range between $750-800/oz › Capacity at the processing facility is expected to
further increase in the second half of the year following changes to the ROM layout, the replacement of the crushing circuit, and other plant
to $27 million.
› In addition, $8m is being spent to build a 200-Man
accommodation facility
6.0
December
6.2
June
10.0 7.4
November August July
6.9 9.8
October September
9.1
Production, koz Process
December
4.0 Mtpa
Capacity expected by mid-2017 Ramp-up phase
2.5 Mtpa 3.0 Mtpa
September
1.5 Mtpa
June
KARMA MINE
KARMA, BURKINA FASO
North Kao Reserve Conversion Extended Mine Life To +10 Years
59
Karma Site Map
NORTH KAO INSIGHTS
› North Kao infill drilling confirmed the continuity of
the previous inferred resource and improved the grade profile ‒ 314koz of resources amenable to heap leach processing converted to indicated status ‒ Indicated resource grade up 53% over the previous inferred grade to 1.22 g/t Au
› 262koz were subsequently converted to reserves,
extending Karma’s mine life to beyond 10 years
› The North Kao mineralized structure remains open
to the north and the potential exists for additional sub-parallel zones 2017 EXPLORATION
› In 2017, a $4 million exploration program totaling
approximately 30,000 meters has been planned to drill near-mill targets such as Rambo West and Yabonsgo
KARMA MINE
KARMA, BURKINA FASO
2017 Targets: YABONSGO Target (<10km from GG1)
60 KARMA MINE
KARMA, BURKINA FASO
2017 Targets: Rambo West
61 KARMA MINE
KARMA, BURKINA FASO
Exploration strategy
62
*Targeting to discover between 0.5 to 1.0 Moz with average grade between 1.0 and 1.5 g/t Au. The potential quantity of ounces is conceptual in nature since there has been insufficient exploration to define a mineral resource and since it is uncertain if exploration will result in the targets being delineated as a mineral resource.
› New geological understanding and mapping in less than 6 months › North Kao already added 2.5 year of mine life › Near mine “higher” grades targets to be drilled in 2017 (Yabongso and Rambo West) › Still ongoing evaluation and ranking of all exploration targets › Beyond North Kao resource drilling, other exploration targets have potential to add
up to 5 additional years of mine life with still on-going evaluations Targeting discovery of between 0.5 to 1.0 Moz at an average cost of $20/oz
KARMA MINE
HOUNDÉ PROJECT, BURKINA FASO
Overview
1Based on 100% equity funding and equipment lease financing²From production start
63 QUICK FACTS (ON 100% BASIS)
Ownership 90% EDV, 10% Burkina Faso Status Fully permitted, construction launched Production start date First gold pour expected Q4 2017 Resources (incl. of Reserves) M&I: 37.9Mt @ 2.1 g/t for 2.551Moz Inferred: 3.2Mt @ 2.6 g/t for 0.274Moz Reserves 30.6Mt @ 2.1 g/t for 2.075Moz Mine Type Open pit LOM Strip Ratio 8.4 Processing Rate 3.0 Mtpa Gravity / CIL plant Gold Recovery 93% Upfront Capital (US$M) $328m, inclusive of $47m for the owner-mining fleet
LOMP SUMMARY (ON 100% BASIS)
Processing Total ore processed, Mt 29.7 Gold grade, g/t 2.15 Contained gold, koz 2,057 Recovery rate, % 93% Production, koz 1,906 Operating Costs Mining costs, $/t moved 2.17 Processing costs, $/t 13.36 Site G&A, $m/yr 9.8 AISC , US$/oz 709
ECONOMIC RETURNS1
Gold Price (US$/oz) $1,150 $1,200 $1,250 $1,300 1,350 After-tax Project NPV (5%) $230 $286 $342 $398 $437 After-tax Project IRR 24% 28% 32% 36% 39% Payback, years² 2.7 2.4 2.2 2.0 1.8 Houndé Project Ouagadougou Karma Project
HOUNDE MINE
HOUNDÉ PROJECT, BURKINA FASO
Construction Progressing On-time And On-budget
64
Procurement Was 80% Complete At Year-end
SIGNIFICANT ACHIEVEMENTS TO-DATE: ›
Construction is progressing as planned, with over 65% completed
›
Over 2.7 million man-hours have been worked without LTI.
›
The 38km long, 91kv overhead power line construction over 60%
›
Open pit pre-strip mining at the Main Vindaloo open pit, adjacent the processing facility, commenced in late 2016.
›
Detailed engineering of the processing facility along with the design HAZOP has been completed, also ahead of schedule in November 2016.
›
TSF progressing ahead of schedule with 60% already completed.
›
CIL ring beam concrete pour was achieved in early August 2016, and the SAG and Ball Mill first lift on both plinths was completed by year- end.
›
The construction of the water harvest dam decant system is complete, with water already being pumped to the water storage dam two months ahead of schedule.
›
Construction of the 300-person permanent accommodation village is approaching completion.
›
Over 2,000 personnel including contractors are currently employed
›
Full back-up 26Mw power gensets has been awarded. This is on schedule to be operational in Q3-2017.
›
The land compensation process has been successfully completed and resettlement commenced in early 2017.
302
$210m
Total Capex (incl. $26m contigency)
$328m $100m
Committed Capex (end of dec) Incurred Capex (end of Dec.)
26 contingency HOUNDE MINE
CIL Tanks Primary Crusher SAG Mill First Lift Poured Village Resettlement
65
HOUNDÉ PROJECT, BURKINA FASO
Construction Progressing On-time And On-budget
HOUNDE MINE
66
HOUNDÉ PROJECT, BURKINA FASO
Exploration Re-launched in 2017
Exploration Targets in Proximity to the Planned Mill
2017 OUTLOOK
› The Houndé exploration tenement covers
+1,075km² within Burkina Faso’s highly prospective Birimian belt
› Historically, exploration focus mainly on
the Vindaloo trends
› At least 15 other significant targets were
identified by previous limited drilling campaigns but remain largely untested
‒ All located within 20km from the planned mill ‒ High grade targets (+5g/t) will be explored in priority
› Following a two year period of no
exploration drilling, activities will resume in 2017 with a $5 million program totaling approximately 45,000 meters
HOUNDE MINE
67
HOUNDÉ PROJECT, BURKINA FASO
2017-2021 Main Promising Targets
HOUNDE MINE
68
*Targeting to discover between 2.5 to 3.5 Moz with average grade between 1.8 and 2.5 g/t Au. The potential quantity of ounces is conceptual in nature since there has been insufficient exploration to define a mineral resource and since it is uncertain if exploration will result in the targets being delineated as a mineral resource.
68
› Our Houndé exploration portfolio is located within one of the most prospective
areas of the Birimian greenstone belt of Burkina Faso
› Historical exploration already proved the occurrence of multiple major mineralized
trends of Vindaloo type within these licences
› At least 15 significant targets were partially tested by previous drilling, and the
majority of them remain undeveloped
› All defined exploration targets are located within a 20 km radius of the Houndé mill › The high grade targets (Bouere, 5 to 6g/t and Kari Pump) will be developed as a
priority in 2017 Targeting discovery of between 2.5 to 3.5 Moz at an average cost of $15/oz over the next 5 years with a budget of ~$45M to extend mine life to +15 years*
HOUNDÉ PROJECT, BURKINA FASO
Exploration strategy
HOUNDE MINE
TABLE OF CONTENTS STRATEGIC OVERVIEW
APPENDIX
2017 OUTLOOK
DETAILS BY MINE AND PROJECT
APPENDIX
BOARD MEMBERS
Michael BECKETT Chairman, Non-executive Director Ian COCKERILL, Non-executive Director Olivier COLOM, Non-executive Director Ian HENDERSON, Non-executive Director Livia MAHLER, Non-executive Director Wayne MCMANUS, Non-executive Director Sébastien de MONTESSUS, CEO & President Naguib SAWIRIS, Non-executive Director
70
70
ENDEAVOUR IS BACKED BY LA MANCHA
71
APPENDIX
30%
holding
31%
holding
Sawiris family’s mining investment vehicle
▪ La Mancha vended-in the Frog’s Leg and White Foil mines ▪ La Mancha then contributed $112m for acquisition of the Cowal mine ▪ Evolution has grown from a ~A$670m market cap to ~A$3.2B, since announcement of strategic partnership
Partnership Announced
▪ La Mancha vended-in the Ity mine and $63m
▪ La Mancha then contributed $65m following the acquisition of Truegold ▪ Participated in bought deal with C$20m ▪ Endeavour has grown from a US$250m to a US$1.8B market cap since announcement of strategic partnership
The Sawiris family is present across various sectors and businesses, ranging from construction and fertilizers to real estate and telecommunications
Long-term growth supportive investor with focus on creating regional leaders
Partnership Announced
5 10 15 20 25 30 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16
INSIGHTS
‒ Start of Karma contribution as of October 1 (commercial production start) ‒ Full year of Ity ‒ Production improvements at Agbaou and Tabakoto 2. Increase in non-sustaining exploration, in line with company strategy
‒ Stronger production at lower AISC and higher gold price ‒ Less non-sustaining capital required as main capital spend is already complete 4. Adjustment for discontinued Youga
FREE CASHFLOW CONTINUED TO INCREASE
Free cashflow up $58/oz compared to 2015
All amounts, other than FCF for 2015 Exclude Youga. Karma pre-commercial production revenue and associated costs were netted on the balance sheet as part of mineral property interest.
72 72
APPENDIX
12 MONTHS ENDED DECEMBER, 2016 2015 $m $/oz $m $/oz
GOLD SOLD FROM CONTINUIN OPERATIONS, KOZ 546 452 REVENUE 673 1,234 522 1,157 Total cash costs (371) (681) (316) (699) Royalties (32) (58) (26) (57) Corporate costs (25) (46) (22) (49) Sustaining capex (44) (81) (48) (107) Sustaining exploration (10) (18) (7) (15) AISC COSTS (482) (884) (419) (927) AISC MARGIN 191 351 103 229 Less: Non-sustaining capital (26) (47) (24) (53) Less: Non-sustaining exploration (23) (43) (7) (16) Operating cash flow from Youga discontinued operation
43 FREE CASH FLOW BEFORE GROWTH PROJECTS (and before working capital, tax & financing costs) 142 261 92 203
1 2 3 4
12 MONTHS ENDED DEC. US$m 2016 2015 FREE CASH FLOW BEFORE GROWTH PROJECTS
(and WC, tax & financing costs)
142 92
Working capital changes (27) 6 Taxes paid (11) (7) Interest paid (20) (25) Cash settlements on hedge programs and gold collar premiums (14) (3)
NET FREE CASH FLOW FROM OPERATIONS 70 62
Growth Project1
(110) (7)
Change in growth project working capital
(6)
22
True Gold (Bridge loan, cash acquired, less change of control payments)
(11)
(24)
(1) (30)
Net equity proceeds
185
125 110 Reduction of debt obligations (110) (63)
CASH INFLOW (OUTFLOW) FOR THE PERIOD 15 47
INSIGHTS
and VAT build-up at Karma related to its commissioning phase
gold collar premiums
Houndé build with bulk of remaining for Ity CIL Project Study
and executive level restructuring costs and
for ($3m), settlement of share appreciation rights, DSUs and PSUs ($6m)
NET FREE CASH FLOW
Remains positive despite Houndé Capex
1 Includes Houndé, Ity CIL, and studies73
APPENDIX
3 4 5 6 1 2
ADJUSTED NET EARNINGS
Up 142% compared to 2015
74 APPENDIX
INSIGHTS
1. Youga results are removed due to disposal of the mine 2. Both 2015 and 2016 amounts relate to realized and unrealized gains/losses on FCFA denominated currency fluctuations (loss in 2016 due to Euro devaluation against the US$) 3. Increased due to mark-to-market
4. Non-recurring costs, associated with True Gold transaction, closure of Vancouver and Accra offices, and severance packages 5. Add-back of non-cash deferred tax expense. The $45m loss included in Net Income is mainly comprised of:
‒ The de-recognition of historical carry-forward losses at Nzema ‒ Tabakoto new tax structure decided between Segala and Kofi subsidiaries with the Governement ; ‒ Accelerated SYSCOA depreciation at Karma utilized in 2016 resulting in a reduced Karma SYSCOA tax base
6. Nzema impairment due to removal of sulfide resources from valuation model (no corporate plan to invest in mill expansion) 7. Shares outstanding increased due to True Gold acquisition and bought deal 12 MONTHS ENDED DEC.
(US$m)
2016 2015 TOTAL NET EARNINGS (52) 36 Youga discontinued operations 3 (5) Loss (gain) on financial instruments 12 (13) Other expenses (income) 2 0.2 Stock-based expense 9 4 Acquisition and restructuring costs 24 13 Deferred income tax expense (recovery) 45 3 Nzema impairment charge of mineral interest 71
114 38 ATTRIBUTABLE TO NON-CONTROLLING INTERESTS 21 18 ATTRIBUTABLE TO SHAREHOLDERS OF THE CORPORATION 93 20 Weighted average number of outstanding shares (million) 81 43 ADJUSTED NET EARNINGS PER SHARE (BASIC) FROM CONTINUING OPERATIONS $1.15 $0.47 1 2 3 4 7 5 6
EXPLORATION BECAME A CORE FOCUS IN 2016
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HIGHLY EXPERIENCED TEAM
› Strong knowledge of West African Birimian
belts
› Senior staff from BRGM, Randgold, Iamgold,
Areva, La Mancha, etc
› 20 Seniors Geologists › 7 Exploration Managers › 40 Juniors Geologists › 130 Technicians and Support Staff
SVP West Africa Exploration Resource Manager HR Manager New Ventures Manager
Expert Geologist
Finance Manager
NI 43-101 Compliance
Greater Ity Explo Manager Regional CI Explo Manager Agbaou Explo Manager Hounde Explo Manager Karma Explo Manager Regional BF Explo Manager Tabakoto/Kofi Explo Manager
Abidjan based
Sr Geos Jr Geos DB Techs Account Support Sr Geos Jr Geos DB Techs Account Support Sr Geos Jr Geos DB Techs Account Support Sr Geos Jr Geos DB Techs Support Sr Geos Jr Geos DB Techs Account Support Sr Geos Jr Geos Techs Account Support Sr Geos Jr Geos Techs Support
CEO COO EVP Projects EVP Exploration & Growth
CI Government Relations Advisor Legal Advisor
With new structure in place
SCREENING AND RANKING METHODOLOGY
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APPENDIX
Exhaustive screening of all >200 potential targets
130+ target screened through multi-criteria data analysis
First filtering Quantifying min/max and mean size and grade
(Length x width x 100m depth x density x average grade issued from existing drilling or nearby analogs)
Top selection of 40 most significant targets Risked mean Indicated Resource per Target
Risked-probability weighted potential per target
High/Medium/Low
Exploration budget required per target to reach Indicated resource level status
Strategic Prioritization
CONSERVATIVE APPROACH
›
Visit to all sites with Exploration Managers/Chef-Senior Geologists, EDV experts
›
6 months detailed review of all past exploration, synthesis of all available and validated data in database
‒ All Geochem (Stream and Soil), all geophysics (air and ground) ‒ All Geological and Structural data (Outcrops, cores, Maps, regolith, structures, artisanal mining) ‒ All Drilling (Auger, RC, DD, Geotech) , logs and analytic results
›
130+ Targets screened through multi-criteria analysis of all data to identify and support exploration targets for evaluation
›
All targets referenced and classified according to :
‒ Current state of project knowledge (from grassroot to development) ‒ Quality of supporting data (drilling, available nearby analogs, structural trends, favorable geology, etc.) ‒ Distance to producing facilities:
‒ Mine Exploration then Near Mine exploration within a 5 km radius from facilities ‒ Brownfield Exploration between 5 and 15 km from facilities ‒ Greenfield Exploration for over 15/20 km from facilities (tentative stand alone future projects, or feeding the facilities if high grade) ‒ Geological framework, mineralization type, mineability, exploration game changer
›
All targets characterized by a minimum-maximum and mean size of tentative deposit (length, width, depth), including estimated average grade when calibration is available
METHODIC AND EXHAUSTIVE REVIEW TO QUANTIFY AND RANK POTENTIAL
APPENDIX
Selection of the 30% (40) most significant targets over the full portfolio in term of localization, mean size, and nearby upside (possible clusters), all gathered per relevant PE (Exploration Permit) or PEX (Exploitation permit)
77
77
›
Each selected target (~40) was risked and characterized by a Probability of Occurrence (POO), based on geological confidence/structural understanding/ type of expected mineralization/existing positive intercepts/trend extension, strong and coherent gold in soil and Auger anomalies
‒ POO 0.8 to 1: Very high confidence (some Mine and Near Mine Exploration or already Identified /tested targets) ‒ POO 0.6 : Probable deposit, with a size and grade distribution according to prognosis (Oz and average grade) ‒ POO 0.4: Less than average Probability of Occurrence, kept in the planning due to its possible size (High Risk- High Reward type) or due to its short distance to mine
›
All selected exploration targets were set within a 5 year window, according to mine priorities, permit duration, requested exploration efforts, and budget
›
All selected targets characterized with:
‒ The required drilling amount/yearly budgets and the related timing of Indicated resource definition ‒ Proposed yearly budgets include estimated manpower, drilling, analysis, support, geophysics, geochem, etc ‒ A 2017-2021 required risked exploration spending necessary to discover the targeted risked mean indicated Oz per target
FURTHER SELECTION, RANKING AND RISK EVALUATION
78
APPENDIX
(on a 100% basis)
AGBAOU NZEMA TABAKOTO ITY3 KARMA
Unit FY-2016 FY-2015 FY-2016 FY-2015 FY-2016 FY-2015 FY-2016 FY-2015 FY-2016 Physicals Total tonnes mined – OP1 000t
25,382 20,447 9,295 8,144 7,098 9,298 6,102 375 8,753Total ore tonnes – OP 000t
2,797 2,818 1,000 1,310 649 511 1,186 64 650Open pit strip ratio1 W:t ore
8.07 6.26 9.94 17.20 9.94 17.20 4.15 4.86 3.66Total tonnes mined – UG 000t
000t
000t
2,827 2,665 1,761 1,783 1,588 1,588 1,173 71 2,089Average gold grade milled g/t
2.27 2.15 1.87 2.21 3.36 3.17 2.20 2.39 1.16Recovery rate %
97% 97% 83% 87% 95% 93% 93% 81% 90%Gold ounces produced
Gold sold
Unit Cost Analysis Mining costs - Open pit $/t mined
2.22 2.64 4.64 4.78 3.60 2.79 2.88 2.38 1.32Mining costs – Underground $/t mined
$/t milled
6.60 6.40 13.16 14.26 21.93 22.89 14.71 23.28 7.76Site G&A $/t milled
4.66 5.56 6.57 6.81 12.80 15.66 11.43 16.97 9.66Cash Cost Details Mining costs - Open pit1 $000s
56,420 54,060 43,109 38,947 25,586 25,960 17,583 892 5,306Mining costs -Underground $000s
$000s
18,656 17,069 23,177 25,423 34,825 36,347 17,256 1,653 6,616Site G&A $000s
13,175 14,806 11,577 12,151 20,325 28,659 13,413 1,205 8,241Purchased ore at Nzema $000s
$000s
1,702 3,375 7,885 1,059 3,357 4,961 (53) 605 (906)Cash costs for ounces sold $000s
84,477 84,172 90,801 99,374 132,906 128,041 44,450 4,355 18,898Royalties $000s
8,871 7,574 5,662 7,234 11,997 10,438 3,316 536 1,952Sustaining capital $000s
11,407 13,191 3,318 10,839 21,193 23,048 7,648 519 359Cash cost per ounce sold $/oz
430 462 1,062 900 821 846 606 550 657Mine-level AISC Per Ounce Sold $/oz
534 576 1,167 1,064 1,027 1,067 756 683 738PRODUCTION AND COST DETAILS BY MINE
For the years ended 2016 and 2015
1) Includes waste capitalized 2) Includes waste capitalized adjustment 3) Ity’s production and AISC is excluded for the pre-November 28, 2015 acquisition period.
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APPENDIX
RESERVES AND RESOURCES
Full details and notes of reserves and resources can be found under the ‘Reserves and Resources’ section on the Company’s website at www.endeavourmining.com
80
On a 100% basis On an attributable basis Resources shown inclusive of Reserves Tonnage (Mt) Grade (Au g/t) Content (Au koz) Tonnage (Mt) Grade (Au g/t) Content (Au koz) Proven Reserves 10 2.57 834 9 2.56 720 Probable Reserves 123 1.58 6,240 94 1.58 4,812 P&P Reserves 133 1.66 7,074 103 1.67 5,532 Measured Resource (incl Reserves) 34 1.80 1,967 30 1.77 1,704 Indicated Resources (incl Reserves) 206 1.60 10,623 166 1.59 8,463 M&I Resources (including Reserves) 240 1.63 12,590 196 1.62 10,167 Inferred Resources 68 1.69 3,682 50 1.71 2,736
Group Consolidated Total
Resources shown inclusive of
Tonnage (Mt) Grade (Au g/t) Content (Au koz) Proven Reserves 0.1 2.90 6 Probable Reserves 43.8 1.50 2,117 P&P Reserves 43.9 1.50 2,123 Measured Resource (incl reserves) 0.0 1.84 2 Indicated Resources (incl reserves) 52.8 1.64 2,777 M&I Resources (including Reserves) 52.8 1.64 2,779 Inferred Resources 30.2 1.45 1,406
Ity Mine & CIL Project
Resources shown inclusive of
Tonnage (Mt) Grade (Au g/t) Content (Au koz) Proven Reserves 2.1 2.73 181 Probable Reserves 1.3 2.70 110 P&P Reserves 3.3 2.72 291 Measured Resource (incl reserves) 21.1 1.37 929 Indicated Resources (incl reserves) 12.0 1.31 502.0 M&I Resources (including Reserves) 33.1 1.35 1,431 Inferred Resources 5.9 1.29 243
Nzema Mine
Resources shown inclusive of
Tonnage (Mt) Grade (Au g/t) Content (Au koz) Proven Reserves 2.9 2.98 274 Probable Reserves 3.4 3.12 341 P&P Reserves 6.3 3.06 615 Measured Resource (incl reserves) 6.9 2.88 638 Indicated Resources (incl reserves) 12.1 3.09 1,206 M&I Resources (including Reserves) 19.0 3.01 1,844 Inferred Resources 8.2 3.45 908
Tabakoto Mine
Resources shown inclusive of
Tonnage (Mt) Grade (Au g/t) Content (Au koz) Proven Reserves 3.7 2.48 296 Probable Reserves 26.9 2.06 1,779 P&P Reserves 30.6 2.11 2,075 Measured Resource (incl reserves) 3.7 2.57 305 Indicated Resources (incl reserves) 34.2 2.04 2,247 M&I Resources (including Reserves) 37.9 2.09 2,551 Inferred Resources 3.2 2.62 274
Hounde Mine
Resources shown inclusive of
Tonnage (Mt) Grade (Au g/t) Content (Au koz) Proven Reserves 1.0 2.20 69 Probable Reserves 10.0 2.44 784 P&P Reserves 11.0 2.41 853 Measured Resource (incl reserves) 1.9 1.41 85 Indicated Resources (incl reserves) 11.2 2.56 919 M&I Resources (including Reserves) 13.0 2.39 1,004 Inferred Resources 1.1 1.73 60
Agbaou Mine
Resources shown inclusive of
Tonnage (Mt) Grade (Au g/t) Content (Au koz) Proven Reserves 0.4 0.59 8 Probable Reserves 37.4 0.92 1,109 P&P Reserves 37.9 0.92 1,117 Measured Resource (incl reserves) 0.4 0.59 8 Indicated Resources (incl reserves) 83.8 1.10 2,973 M&I Resources (including Reserves) 84.3 1.10 2,981 Inferred Resources 19.3 1.27 791
Karma Mine
Project1 Agbaou Nzema Tabakoto Ity Karma2 Hounde UG Open Pit Reserves Au price 1,350 1,250 1,250 1,250 1,250 1,300 1,300 Resources Au price 1,500 1,500 1,500 1,500 1,500 1,557 1,500
1 Cut off grades for all resources open pits are 0,5g/tAu, except at Karma where the cutoff grade is defined by material type: Oxide=0.2, Transition=0.22 and Sulfide=0,5 2 North Kao reserves and resources has a gold price of respectively $1,250/oz and $1,500/ozNotes :
APPENDIX