Endeavour Mining Corporation : Endeavour Reports Strong FY-2018 Results

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Algemeen advies 05/03/2019 18:03
(for continuing operations)
• Q4-2018 production up 25% over Q3-2018 to 174koz and AISC down 14% to $707/oz
• FY-2018 production up 52% over the prior year to 612koz, beating the top end of the 555-590koz guidance
• FY-2018 AISC down $25/oz over the prior year to $744/oz, well below the guidance range of $760-810/oz
• All-in Margin up $17m in Q4 over Q3 to $40m; FY-2018 up 80% over 2017 to $184m
• Operating Cash Flow before non-cash working capital of $53m or $0.49/share in Q4; FY-2018 up 64% over 2017 to $261m or 2.43/share
• Adjusted Net Earnings up from $(1)m in Q3 to $16m in Q4 or $0.15/share, amounting to $0.49/share for FY-2018
• Net Debt of $536m at year end, up from $232m at the end of 2017, due to the accelerated construction of Ity CIL project
• Group M&I resources up 0.9Moz year-over-year to 14Moz; P&P reserves down 0.6Moz to 8Moz as 1Moz Kari Pump maiden Indicated resource is expected to be converted to reserves by mid-year

• FY-2019 production expected to increase to 615-695koz and AISC expected to remain low at $760-810/oz
• Ity CIL construction progressing on-budget and ahead of schedule with the first gold pour expected in early Q2-2019
• Significant exploration investment of $45-50m, mainly focused on our Houndé and Ity flagship mines

George Town, March 5, 2019 - Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) is pleased to announce its financial and operating results for the fourth quarter and full year 2018, with highlights provided in the table below.

Table 1 : Key Operational and Financial Highlights

For continuing operations Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31, Variance
(in US$ million) 2018 2018 2017 2018 2017
Gold Production, koz 174 139 151 612 403 +52%
Realized Gold Price2, $/oz 1,198 1,161 1,228 1,228 1,199 +2%
All-in Sustaining Cost1, $/oz 707 820 649 744 769 (3%)
All-in Sustaining Margin1,3, $/oz 490 341 581 484 436 +11%
All-in Sustaining Margin4, $m 85 46 81 296 171 +73%
All-in Margin5, $m 40 23 57 184 102 +80%
Operating Cash Flow Before Non-Cash Working Capital, $m 53 45 39 261 159 +64%
Cash Flow per Share, $/share 0.49 0.42 0.36 2.43 1.49 +63%
Revenues, $m 208 156 171 752 471 +60%
Adjusted EBITDA1, $m 56 49 84 265 172 +54%
Net Earnings Attr. to Shareholders1, $m (32) 15 (15) (0) 27 n.a.
Net Earnings1, $/share (0.29) 0.14 (0.15) (0.00) 0.27 n.a.
Adjusted Net Earnings Attr. to Shareholders1, $m 16 (1) 53 53 54 n.a.
Adjusted Net Earnings per Share1, $/share 0.15 (0.01) 0.49 0.49 0.51 n.a.
Net Debt1, $m 536 535 232 536 232 +131%

1 This is a non-GAAP measure. Refer to the non-GAAP measure section of the MD&A. 2 Realized Gold Price inclusive of Karma stream; 3 Realized Gold Price less AISC per ounce; 4 Net revenue less All-in Sustaining Cost; 5 Net revenue less All-in Sustaining Costs and Non-Sustaining capital; 6 Adjusted EBITDA divided by Revenues.

Sébastien de Montessus, President & CEO, stated: "2018 was a successful year for Endeavour during which we beat our production guidance and ended with AISC lower than the guided range, all while maintaining a strong safety record. The first full-year contribution from Houndé, coupled with the successful management of our portfolio, has sustainably decreased our all-in sustaining costs to below our strategic target of $800/oz.

2019 is expected to be another strong year as we look forward to the first gold pour at the Ity CIL plant in the coming weeks, where construction continues to progress ahead of schedule and on budget. Over the past two years, we have transformed our portfolio, investing nearly $1 billion into the business. Once Ity CIL commences production, we expect to enter a period of sustained strong free cash flow generation with a continued focus on return on capital employed.

The maiden resource at Houndé's Kari Pump discovery was our most notable exploration achievement in 2018. In 2019 we look forward to converting this discovery into reserves. We will maintain an aggressive exploration program focused specifically at Houndé where we expect further maiden resources on new discoveries. In addition, we will look to further grow the resource in the Le Plaque area at Ity and advance exploration at our greenfield properties.

I would like to thank our entire team for their dedication and contribution to our success in 2018 and for their efforts in positioning Endeavour for continued success in 2019 and beyond."


In 2018, Endeavour continued to deliver against its strategy, with good progress made across its four strategic levers:
1. Operational Excellence - reinforced track record as Group Lost Time Injury Frequency Rate ("LTIFR") decreased from 0.29 to 0.16 year on year, remaining below industry benchmarks. Production and AISC guidance was met or beaten for the 6th consecutive year.
2. Project Development - remained a key focus area with the successful progress at the Ity CIL project.
3. Unlocking Exploration Value - continued to deliver against our 5-year discovery target, with 1.9Moz of M&I resources discovered in 2018, totaling 4.2Moz at a discovery cost of circa $13/oz since the strategy was set in late 2016. In 2018, notable successes include the maiden Indicated resource Kari Pump target at Houndé and at the greenfield Fetekro property of respectively 1.0Moz and 0.5Moz, good results at the Le Plaque area at Ity which are soon expected to yield an increased resource, and greater confidence in the Kalana Main deposit resource.
4. Active Portfolio & Balance Sheet Management - in line with its aim to focus on long-life and low-cost high-quality assets, following the sale of its non-core Youga mine and Nzema mines in 2016 and 2017 respectively, Endeavour sold its Tabakoto mine in 2018. On the balance sheet front, Endeavour finished the year with strong liquidity sources despite the accelerated construction of its Ity CIL project.

2019 is expected to be another pivotal year for Endeavour with the following notable catalysts:
• Ity CIL project first gold pour expected in early Q2-2019, following which the Group is expected to be net cash flow positive.
• Maiden reserve for the Kari Pump discovery at Houndé expected by mid-year.
• Maiden resource for the Kari West and Kari center discoveries, and further resource delineation for the Kari Pump deposit at Houndé expected in Q4-2019.
• Increased resource at the Le Plaque discovery at Ity expected in Q2-2019.
• Resource increase at the Fetekro greenfield exploration project expected in Q2-2019 and further results on Kalana in H2-2019.

• Continued strong safety record in 2018 with a low LTIFR of 0.16 across the group.
• The Tabakoto sale closed on December 24, 2018 and was deconsolidated in the financial statements.
• Q4-2018 group production from continuing operations increased by 25% over the previous quarter to 174koz and AISC declined by 14% to $707/oz due to a strong quarter at all mines.
• Full-year 2018 production from continuing operations increased by 52% over the prior year to 612koz, beating the top end of the 555-590koz guidance, while AISC from continuing operations decreased by $25/oz from prior year to $744/oz, well below the guidance range of $760-810/oz. 2018 benefited from a full-year of production at Houndé, and better production and AISC performance at Ity and Karma, which more than compensated for the expected lower performance at Agbaou.

Table 2 : Group Production, koz
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