Endeavour Reports Strong FY-2023 Results
ENDEAVOUR REPORTS STRONG FY-2023
RESULTSProduction of 1.1Moz at AISC of $967/oz •
Adj. EBITDA of $1.0bn • Shareholder returns of $266m
OPERATIONAL
AND FINANCIAL HIGHLIGHTS (for continuing operations) |
- Q4-2023
production of 280koz at an
industry-low AISC of $947/oz;
totalling 1,072koz at an AISC of
$967/oz for FY-2023
|
-
11th consecutive year of
achieving or beating production guidance at an industry-leading
AISC
|
- Adjusted
EBITDA of $292m for Q4-2023 and
$1,047m for FY-2023
|
- Adjusted
Net Earnings of $42m (or
$0.17/sh) for Q4-2023 and
$230m (or
$0.93/sh) for
FY-2023
|
- Operating
Cash Flow before changes in WC of
$246m (or
$1.00/sh) for Q4-2023 and
$746m (or
$3.02/sh) for
FY-2023
|
- Healthy
financial position with net debt of
$555m and leverage of
0.50x Net Debt / Adj. EBITDA (LTM) despite
investing $548m in organic growth
and exploration and delivering
$266m in shareholder returns
during the year
|
ROBUST
SHAREHOLDER RETURNS |
- FY-2023
dividend of $200m and share buybacks of $66m; 52% more than the
minimum commitment
|
-
Shareholder returns total
$903m since first payment in
Q1-2021, 77% more than the minimum commitment
|
ATTRACTIVE
ORGANIC GROWTH |
-
Sabodala-Massawa expansion and Lafigué project both on
budget and on track for first gold in Q2-2024
|
- Group
M&I resources increased by
1.4Moz or 6%
year-on-year to 26.7Moz
as exploration prioritised the Tanda-Iguela project increasing its
M&I resources by 303% to 4.5Moz, while P&P reserves
decreased by 1.3Moz or
9% year-on-year to
13.9Moz, largely due to depletion, with
resource to reserve conversion a key focus in 2024
|
London, 27 March 2024 –
Endeavour Mining plc (LSE:EDV, TSX:EDV, OTCQX:EDVMF) (“Endeavour”,
the “Group” or the “Company”) is pleased to announce its FY-2023
operating and financial results, with highlights provided in Table
1 below.
Table 1: Highlights from continuing
operations1
All amounts in US$ million unless otherwise specified |
THREE MONTHS ENDED |
YEAR ENDED |
|
31 December 2023 |
30 September2023 |
31 December 2022 |
31 December 2023 |
31 December 2022 |
Δ FY-2023 vs. FY-2022 |
|
|
OPERATING DATA |
|
|
|
|
|
|
|
Gold Production,
koz |
280 |
281 |
294 |
1,072 |
1,161 |
(8)% |
|
Gold Sold,
koz |
285 |
278 |
290 |
1,084 |
1,150 |
(6)% |
|
All-in Sustaining
Cost2, $/oz |
947 |
967 |
885 |
967 |
849 |
+14% |
|
Realised Gold Price3, $/oz |
1,945 |
1,903 |
1,760 |
1,919 |
1,808 |
+6% |
|
CASH
FLOW |
|
|
|
|
|
|
|
Operating Cash
Flow before changes in working capital |
246 |
121 |
244 |
746 |
982 |
(24)% |
|
Operating Cash
Flow before changes in working capital2, $/sh |
1.00 |
0.49 |
0.99 |
3.02 |
3.96 |
(24)% |
|
Operating Cash
Flow |
167 |
115 |
288 |
619 |
910 |
(32)% |
|
Operating Cash
Flow2, $/sh |
0.68 |
0.47 |
1.17 |
2.51 |
3.67 |
(32)% |
|
PROFITABILITY |
|
|
|
|
|
|
|
Net Earnings
Attributable to Shareholders |
(160) |
60 |
(10) |
(23) |
194 |
(112)% |
|
Net Earnings,
$/sh |
(0.65) |
0.24 |
(0.04) |
(0.09) |
0.78 |
(112)% |
|
Adj. Net Earnings
Attributable to Shareholders2 |
42 |
70 |
14 |
230 |
293 |
(22)% |
|
Adj. Net
Earnings2, $/sh |
0.17 |
0.28 |
0.06 |
0.93 |
1.18 |
(21)% |
|
EBITDA2 |
70 |
262 |
205 |
773 |
1,044 |
(26)% |
|
Adj. EBITDA2 |
292 |
263 |
256 |
1,047 |
1,133 |
(8)% |
|
SHAREHOLDER RETURNS2 |
|
|
|
|
|
|
|
Shareholder
dividends paid |
— |
100 |
— |
200 |
170 |
+18% |
|
Share
buybacks |
26 |
20 |
24 |
66 |
99 |
(34)% |
|
ORGANIC GROWTH2 |
|
|
|
|
|
|
|
Growth capital
spend |
155 |
116 |
55 |
448 |
127 |
+253% |
|
Exploration spend
from continuing operations |
23 |
27 |
14 |
101 |
71 |
+42% |
|
FINANCIAL POSITION HIGHLIGHTS |
|
|
|
|
|
|
|
Net Debt, (Net
Cash)2 |
555 |
445 |
(121) |
555 |
(121) |
n.a. |
|
Net Debt, (Net Cash) / LTM Trailing adj. EBITDA4 |
0.50x |
0.40x |
(0.09)x |
0.50x |
(0.09)x |
n.a. |
|
1 Continuing operations excludes the Boungou and
Wahgnion mines which were divested on 30 June 2023 and the Karma
mine which was divested on 10 March 2022. 2This is a non-GAAP
measure, refer to the non-GAAP Measures section for further
details. 3Realised gold price are inclusive of the Sabodala-Massawa
stream and the realised gains/losses from the Group’s revenue
protection programme. 4Last Twelve Months (“LTM”) Trailing Adj.
EBITDA includes EBITDA generated by discontinued operations.
Management will host a conference call and
webcast today, 27 March 2024, at 9:30 am EDT / 1:30 pm GMT. For
instructions on how to participate, please refer to the conference
call and webcast section at the end of the news release. Today the
Management Discussion & Analysis, audited Financial Statements
and Annual Report for the year ended 31 December 2023 have been
submitted to the National Storage Mechanism and filed on SEDAR. The
documents will shortly be available for inspection on the Company’s
website and at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism. In
addition, the Company has published its 2023 Sustainability Report,
which will shortly be available on the Company’s website.
Ian Cockerill, Chief Executive Officer,
commented: “I am delighted to have been appointed CEO of Endeavour
at such a pivotal moment. As you can see from our 2023 results,
Endeavour is well positioned with a high-quality portfolio and a
resilient business model that is underpinned by a disciplined
approach to capital allocation. During the year we delivered
against our key objectives and produced 1.1Moz of gold, meeting our
production guidance for the eleventh consecutive year, while
achieving an all-in sustaining cost of $967 per ounce, maintaining
our status as one of the lowest cost producers within the
sector.
We continued to increase the quality of our
portfolio as we advanced our two high-margin development projects,
the Sabodala-Massawa expansion and the Lafigué development project,
which are both on budget and slightly ahead of schedule with
commissioning underway at both projects. We also divested our
non-core Boungou and Wahgnion mines during the year, further
strengthening the quality of the portfolio and increasing its
geographic diversification.
Our exploration programme continues to support
our robust project pipeline, with the addition of 3.4 million
ounces of Indicated resources at our Tanda-Iguela discovery in Côte
d’Ivoire. This 4.5 million ounce discovery is not only one of the
most significant discoveries in West Africa in the last ten years,
but a potential tier 1 deposit for Endeavour, that we discovered
for an industry low cost of $11 per ounce.
In addition to investing over $548 million in
organic growth and exploration during the year, we returned $266
million to our shareholders, through dividends and share buybacks.
We returned $227 dollars for every ounce of gold that we produced,
reiterating our commitment to delivering attractive shareholder
returns.
The foundations are in place for 2024 to be a
transformational year of delivery. I am focused on completing our
growth projects and transitioning to a more cash generative phase,
that will prioritise de-levering the balance sheet and delivering
enhanced shareholder returns, ensuring that the growth that we
unlock, immediately benefits all our stakeholders.”
INVESTIGATION INTO CHIEF EXECUTIVE
OFFICER’S MISCONDUCT COMPLETED
- As previously announced on 4 January 2024, the contract with
former President and Chief Executive Officer, Sébastien de
Montessus, was terminated for serious misconduct following an
investigation undertaken by the Board of Directors into an
irregular payment instruction issued by him, related to the
disposal of the Agbaou asset undertaken by the Company. As a result
of his serious misconduct, the Remuneration Committee of the Board
determined to claw back remuneration totalling $29.1 million as
announced on 18 January 2024.
- The Board of Directors of Endeavour announced today, 27 March
2024, that the investigation is now complete and the key outcomes
are:
- No restatement of historic financial statements and no material
impact on 2023 annual financial results issued today, which are the
subject of an unmodified audit opinion.
- Investigation found that Mr de Montessus, acting with certain
others who are not employees of the Group:
- diverted a US$5.9 million payment to a third-party company in
March 2021, and concealed his actions with repeated false
representations to management, the Board and auditors;
- caused Endeavour to make two payments totalling US$15.0 million
to the same third-party company in August and November 2020,
deliberately disguising them as advance payments to a contractor
through repeated false representations to management.
- No evidence of bribery, or of any payments being made to
sanctioned persons or to terrorist groups.
- Ultimate beneficiaries of these payments have not been
discovered, despite extensive investigation, as the recipient
entity was liquidated immediately after the funds were
transferred.
- Mr de Montessus provided implausible and untrue explanations of
his conduct during the course of the Investigation.
- The Investigation is now complete.
- Summary of actions taken and proposed:
- Mr de Montessus was terminated as CEO and President on 4
January.
- Clawback of remuneration totalling US$29.1 million announced on
18 January.
- Noting that these payments involved deliberate circumvention of
our existing controls framework, the Board has nonetheless
accelerated its review of internal controls in line with the new UK
Corporate Governance Code, and has made immediate adjustments to
certain controls relating to M&A activity.
- For further information, please refer to the 2023 Annual Report
at the following link.
- The Board appointed Ian Cockerill, formerly Deputy Chair of the
Board, as permanent Chief Executive Officer and Executive Director
on 4 January. Ian brings over four decades of experience in the
global natural resources sector and has held senior operational,
project and executive positions at major mining companies,
including Chief Executive Officer of Gold Fields and Anglo
Coal.
SHAREHOLDER RETURNS
PROGRAMME
-
Endeavour is pleased to continue to deliver attractive shareholder
returns, in line with its capital allocation framework. As
previously announced, the FY-2023 dividend amounts to $200.0
million, or $0.81 per share, which represents $25.0 million more
than the minimum dividend commitment of $175.0 million for the
year, reiterating Endeavour's strong commitment to paying
supplemental shareholder returns. Endeavour’s H2-2023 dividend
amounts to $100m or $0.41 per share and was paid on 25 March 2024
to shareholders of record on 23 February 2024.
-
Shareholder returns are being supplemented through the Company’s
share buyback programme. A total of $65.7 million, or 3.0 million
shares were repurchased during FY-2023, of which $25.7 million or
1.3 million shares were repurchased in Q4-2023. Furthermore, a
total of $12.6 million or 0.7 million shares have been repurchased
in FY-2024 up until 22 March 2024.
-
As shown in the table below, Endeavour has returned $266.4 million
to shareholders for FY-2023 through dividends and share buybacks,
52% above the $175.0 million minimum dividend commitment for the
year, and equivalent to $227 per ounce produced from all
operations. Since the shareholder returns programme began to be
paid in Q1-2021, Endeavour has returned over $903.0 million to
shareholders in the form of dividends and buybacks, which
represents $393.0 million or 77% more than its minimum commitment
over the period.
Table 2: Actual Shareholder Returns vs.
Minimum Commitment
|
MINIMUM |
ACTUAL SHAREHOLDER RETURNS |
SUPPLEMENTAL |
(All amounts in US$m) |
DIVIDEND COMMITMENT |
DIVIDENDS |
BUYBACKS COMPLETED |
TOTAL RETURNS |
SHAREHOLDER RETURNS |
FY-2020 |
60 |
60 |
— |
60 |
— |
FY-2021 |
125 |
140 |
138 |
278 |
+153 |
FY-2022 |
150 |
200 |
99 |
299 |
+149 |
FY-2023 |
175 |
200 |
66 |
266 |
+91 |
TOTAL |
510 |
600 |
303 |
903 |
+393 |
-
As previously stated, Endeavour implemented a dividend policy in
2021, with the goal of supplementing its minimum dividend
commitment with additional dividends and share buybacks provided
that the prevailing gold price remained above $1,500/oz and
Endeavour’s leverage remained below 0.5x Net Debt / Adj. EBITDA.
Endeavour's goal is to increase its shareholder returns programme
once its organic growth projects are completed, while
simultaneously strengthening its balance sheet, thereby ensuring
that its efforts to unlock growth immediately benefit all its
stakeholders. Endeavour's next semi-annual dividend is expected to
be announced in Q3-2024, along with its Q2 and H1-2024 financial
results.
-
As announced on 20 March 2024, Endeavour has received approval from
the Toronto Stock Exchange (“TSX”) to renew its Normal Course
Issuer Bid (“NCIB”) for its share buyback programme. Under the
NCIB, Endeavour is entitled to repurchase up to 5% of its total
issued and outstanding shares as of 13 March 2024, or 12,259,943
shares, during the 12 month period of the NCIB, and up to 25% of
the average daily trading volume (“ADTV”) for the six months ended
29 February 2024, calculated in accordance with the rules of the
TSX for purposes of the NCIB or 96,878 shares during each trading
day, excluding purchases made in accordance with the block purchase
exemptions under applicable TSX policies. All ordinary shares
repurchased under the share repurchase programme will be cancelled.
The renewed NCIB commenced on 22 March 2024 and ends on 21 March
2025, or such earlier date as Endeavour may complete its purchases
pursuant to the notice of intention filed with the TSX.
-
Endeavour’s previously announced automatic share purchase agreement
with Stifel Nicolaus Europe Limited (“Stifel”) will continue to
allow for the purchase of ordinary shares, subject to certain
trading parameters, at times when Endeavour would not be active in
the market due to regulatory close periods, its own internal
trading black-out periods, insider trading rules or otherwise.
Outside of these periods, ordinary shares may be repurchased in
accordance with management’s discretion and in compliance with
applicable law.
-
Share purchases will be made by Stifel (or through its agent,
Stifel Nicolaus Canada, Inc.) on the TSX and the London Stock
Exchange, as well as through other designated exchanges and
alternative trading systems in accordance with applicable
regulatory requirements. The price paid for repurchased ordinary
shares will be the market price of such ordinary shares at the time
of acquisition or such other price as may be permitted in
accordance with applicable regulatory requirements and Endeavour’s
existing shareholder authority to conduct share repurchases.
Endeavour intends to ask shareholders to renew that authority at
its 2024 AGM.
CASH FLOW SUMMARY
The table below presents the cash flow for
Endeavour for the three month period ended 31 December 2023, 30
September 2023, and 31 December 2022, and the twelve month period
ended 31 December 2023 and 31 December 2022 with accompanying
explanations below.
Table 3: Cash Flow Summary
|
|
THREE MONTHS ENDED |
YEAR ENDED |
All amounts in US$ million unless otherwise specified |
Notes |
31 December 2023 |
30 September2023 |
31 December 2022 |
31 December 2023 |
31 December 2022 |
Net cash from/(used in), as per cash flow
statement: |
|
|
|
|
|
|
Operating cash
flows before changes in working capital1 |
|
246 |
121 |
244 |
746 |
982 |
Changes in
working capital1 |
|
(80) |
(5) |
44 |
(127) |
(73) |
Cash generated from discontinued operations |
|
— |
— |
23 |
27 |
108 |
Cash generated from operating activities |
[1] |
167 |
115 |
311 |
647 |
1,017 |
Cash used in
investing activities |
[2] |
(211) |
(195) |
(172) |
(821) |
(521) |
Cash used in
financing activities |
[3] |
(79) |
(125) |
(53) |
(277) |
(380) |
Effect of exchange rate changes on cash |
|
15 |
(15) |
34 |
17 |
(71) |
(DECREASE)/INCREASE IN CASH |
|
(108) |
(219) |
119 |
(434) |
45 |
Cash and cash equivalent position at beginning of period |
|
625 |
845 |
833 |
951 |
906 |
CASH AND CASH EQUIVALENT POSITION AT END OF
PERIOD |
|
517 |
625 |
951 |
517 |
951 |
1Continuing Operations excludes the Boungou and
Wahgnion mines which were divested on 30 June 2023 and the Karma
mine which was divested on 10 March 2022.
NOTES:
1) Operating cash flows increased by
$51.8 million from $114.9 million (or $0.47 per share) in Q3-2023
to $166.7 million (or $0.68 per share) in Q4-2023 due to a higher
realised gold price, lower taxes paid related to the timing of
withholding tax payments and tax payments at Sabodala-Massawa, and
lower exploration costs, partially offset by an increased working
capital outflow.
Operating cash flows decreased by $370.6 million
from $1,017.1 million (or $4.10 per share) in FY-2022 to $646.5
million (or $2.62 per share) in FY-2023 due to higher operating
expenses, exploration costs and the timing of tax payments
compounded by a reduction in cashflows generated by discontinued
operations following the disposal of the Boungou and Wahgnion mines
on 30 June 2023.
Notable variances are summarised below:
-
Working capital was an outflow of $79.5 million in Q4-2023, an
increase of $74.3 million over the Q3-2023 outflow of $5.2 million.
The outflow in Q4-2023 was largely driven by an outflow in trade
and other receivables of $63.6 million related to the timing of VAT
receipts, an outflow of inventories of $15.3 million mainly related
to increased stockpiles at Sabodala-Massawa and Ity and a trade and
other payables outflow of $3.0 million primarily related to the
timing of supplier payments at Houndé and Ity. The working capital
outflow in Q4-2023 was partially offset by an inflow in prepaid
expenses and other items of $2.4 million related to decreased
supplier prepayments at Houndé.Working capital was an outflow of
$126.9 million in FY-2023, an increase of $54.3 million over the
FY-2022 outflow of $72.6 million, driven by an increase in outflows
related to trade and other receivables due to the timing of VAT
receipts and an increase in outflows related to increased
stockpiles at Sabodala-Massawa and Ity.
-
Gold sales from continuing operations increased from 278koz in
Q3-2023 to 285koz in Q4-2023 largely due to the timing of gold
sales. The realised gold price from continuing operations increased
from $1,898 per ounce for Q3-2023 to $2,007 per ounce for Q4-2023.
Inclusive of the Group’s Revenue Protection Programme, the realised
gold price increased from $1,903 per ounce for Q3-2023 to $1,945
per ounce for Q4-2023.Gold sales from continuing operations
decreased from 1,150koz in FY-2022 to 1,084koz in FY-2023, due to
lower Group production from continuing operations in FY-2023. The
realised gold price from continuing operations increased from
$1,791 per ounce for FY-2022 to $1,939 per ounce for FY-2023.
Inclusive of the Group’s Revenue Protection Programme, the realised
gold price increased from $1,808 per ounce for FY-2022 to $1,919
per ounce for FY-2023.
-
Total cash cost per ounce decreased from $848 per ounce in Q3-2023
to $837 per ounce in Q4-2023, due to lower cash costs at Mana
driven by lower open pit mining costs, higher by-product credits
and an increase in capitalised waste, and lower cash costs at
Sabodala-Massawa following increased gold production volumes,
partially offset by higher cash costs at Houndé driven by higher
royalties and G&A costs.Total cash cost per ounce increased
from $723 per ounce in FY-2022 to $837 per ounce in FY-2023 due to
lower production and gold sold at Sabodala-Massawa and Mana,
increases in fuel and consumable costs across the Group, higher
royalty costs following a higher realised gold price and adverse
impacts associated with the stronger EUR to USD foreign exchange
rate in FY-2023.
-
As shown in the table below, income taxes paid decreased by $71.1
million from $142.0 million in Q3-2023 to $70.9 million in Q4-2023
due largely to a decrease in taxes paid at Sabodala-Massawa, as the
final tax payments related to the 2022 tax year were made in
Q3-2023, and a decrease in other tax payments from $50.7 million in
Q3-2023 to $30.3 million in Q4-2023 due to lower withholding tax
payments linked to cash that was upstreamed from operating
entities.Income taxes paid increased by $182.6 million from $158.3
million in FY-2022 to $340.9 million in FY-2023 due to an increase
in Sabodala-Massawa’s provisional year-end tax payments, which
benefitted in the prior year from the lower 2021 tax base due to
the tax holiday at the Massawa permit that expired in 2021. Taxes
also increased due to withholding tax payments on cash upstreamed
from the operating entities, higher taxes paid at Ity due to
changes in taxation on the Floleu permit, and the timing of
provisional tax payments at Houndé and Mana for 2023 which have a
higher tax base.
Table 4: Tax Payments from continuing
operations
|
THREE MONTHS ENDED |
YEAR ENDED |
All amounts in US$ million |
31 December2023 |
30 September2023 |
31 December2022 |
31 December2023 |
31 December2022 |
Houndé |
16.5 |
11.3 |
9.8 |
51.7 |
46.8 |
Ity |
18.6 |
9.3 |
— |
61.5 |
30.5 |
Mana |
5.5 |
5.4 |
2.7 |
26.8 |
12.9 |
Sabodala-Massawa |
— |
65.3 |
— |
116.4 |
16.8 |
Other1 |
30.3 |
50.7 |
— |
84.5 |
51.3 |
Taxes paid by continuing operations |
70.9 |
142.0 |
12.5 |
340.9 |
158.3 |
|
|
|
|
|
|
1Included in the “Other” category is income and withholding
taxes paid by corporate and exploration entities.
2) Cashflows used in investing
activities increased by $15.9 million from $195.1 million in
Q3-2023 to $211.0 million in Q4-2023 due to accelerated growth
capital spend in Q4-2023 at the Sabodala-Massawa expansion and the
Lafigué development project.
Cashflows used in investing activities increased
by $299.4 million from $521.4 million in FY-2022 to $820.8 million
in FY-2023 largely due to the increases in growth capital incurred
at the Sabodala-Massawa expansion, which was launched in Q2-2022,
and the Lafigué development project, which was launched in Q4-2022,
as well as increases in non-sustaining capital at the Ity and Mana
mines. This was partially offset by a decrease in sustaining
capital at Sabodala-Massawa.
- Sustaining capital from continuing
operations decreased from $22.5 million in Q3-2023 to $20.0 million
in Q4-2023 due to lower sustaining capital expenditure at Houndé
and Sabodala-Massawa following heavy mining equipment purchases
made in the prior quarter.Sustaining capital from continuing
operations decreased from $97.5 million in FY-2022 to $91.8 million
in FY-2023 due to decreased sustaining capital at Sabodala-Massawa
related to decreased waste development activities, partially offset
by an increase in sustaining capital at Mana related to increased
underground development and stope production activity. Sustaining
capital expenditure at Ity and Houndé were broadly consistent with
the prior year.
- Non-sustaining capital from
continuing operations increased from $49.5 million in Q3-2023 to
$52.5 million in Q4-2023, largely due to an increase in
non-sustaining capital expenditure at Houndé related to
pre-stripping activities in the Kari Pump pit, and at Ity related
to increased cutback activities at the Walter pit and increased
spend on the Mineral Sizer optimisation initiative. This was
partially offset by decreased non-sustaining capital at
Sabodala-Massawa and Mana related to decreased non-sustaining waste
development.Non-sustaining capital from continuing operations
increased from $192.6 million in FY-2022 to $245.3 million in
FY-2023 due to increased non-sustaining capital expenditure at Ity
related to the construction of the Recyn and Mineral Sizer
optimisation initiatives, the embankment raise at TSF 1 and the
construction of TSF 2, and at Sabodala-Massawa due to increased
pre-stripping activities as new pits were opened. This was
partially offset by decreased non-sustaining capital expenditure at
Mana as underground mine development advanced to stope production
incurring less non-sustaining capital underground waste
development. Non-sustaining capital expenditure at Houndé was
broadly consistent with the prior year.
-
Growth capital increased from $116.2 million in Q3-2023 to $155.0
million in Q4-2023, as construction activities at the
Sabodala-Massawa expansion and the Lafigué development project
accelerated ahead of first gold production at both projects,
expected in Q2-2024. Growth capital expenditure during the quarter
also included $1.5 million for technical study work related to the
Kalana project.Growth capital increased from $126.5 million in
FY-2022 to $447.5 million in FY-2023 largely due to the
acceleration of construction activities at the Sabodala-Massawa
expansion, which was launched in Q2-2022, and the Lafigué
development project, which was launched in Q4-2022.
3) Cash flows used in financing
activities decreased by $45.6 million from an outflow of $124.6
million in Q3-2023 to an outflow of $79.0 million in Q4-2023
largely due to the timing of dividend payments to shareholders and
reduced dividend payments to minorities compared to the prior
period. Cash flows used in financing activities in Q4-2023 included
a $70.0 million repayment of the RCF during the quarter, payments
of financing and other fees of $36.7 million related to the
coupon payments for the senior notes and the RCF, payments for the
acquisition of the Company’s own shares through its share buyback
programme of $24.7 million, payment of dividends to minorities of
$12.7 million, and repayment of finance and lease obligations of
$7.0 million. Financing cash outflows were party offset by a $72.1
million drawdown of the Lafigué term loan.
Cash flows used in financing activities
decreased by $103.5 million from an outflow of $380.1 million in
FY-2022 to an outflow of $276.6 million in FY-2023 largely due to
drawings on the Company’s RCF during the year offsetting the
financing cash outflows from the settlement of the Company’s
convertible notes. Cash flows used in financing activities in
FY-2023 included the $330.0 million settlement of the Company’s
convertible notes, dividends paid to shareholders of $200.4
million, payments of dividends to minorities of $74.7 million,
repayment of the drawn portions of the Company’s RCF of $70.0
million, payments of financing and other fees of $68.6 million
largely related to the coupon payments for the senior notes and the
RCF, payments for the acquisition of the Company’s own shares
through its share buyback programme of $61.5 million, settlement of
contingent considerations of $50.0 million that was paid to Barrick
Gold as part of the Massawa acquisition, cash settlement of call
rights of $28.5 million related to outstanding call rights from
Teranga, repayment of finance and lease obligations of $20.5
million and payments for the settlement of tracker shares of $18.4
million. Financing cash outflows were partly offset by a $642.2
million drawdown of long-term debt facilities (including $535.0
million drawn from the Company’s RCF and $107.2 million drawn from
the Lafigué term loan) and receipts on exercise of options and
warrants of $5.9 million.
EARNINGS FROM CONTINUING OPERATIONS
The table below presents the earnings and
adjusted earnings for Endeavour for the three month periods ended
31 December 2023, 30 September 2023, and 31 December 2022 and the
twelve month periods ended 31 December 2023 and 31 December 2022
with accompanying explanations below.
Table 5: Earnings from Continuing
Operations1
|
|
THREE MONTHS ENDED |
YEAR ENDED |
All amounts in US$ million unless otherwise specified |
Notes |
31 December2023 |
30 September2023 |
31 December2022 |
31 December2023 |
31 December2022 |
Revenue |
[4] |
579 |
530 |
508 |
2,115 |
2,069 |
Operating
expenses |
[5] |
(209) |
(205) |
(186) |
(787) |
(720) |
Depreciation and
depletion |
[6] |
(133) |
(114) |
(137) |
(448) |
(476) |
Royalties |
[7] |
(40) |
(32) |
(31) |
(134) |
(125) |
Earnings from mine operations |
|
198 |
178 |
154 |
745 |
749 |
Corporate costs |
[8] |
(11) |
(10) |
(15) |
(49) |
(48) |
Impairment of
mining interests and goodwill |
[9] |
(108) |
— |
(3) |
(123) |
(3) |
Share-based
compensation |
|
(7) |
(5) |
(18) |
(29) |
(33) |
Other
expense |
[10] |
(45) |
(7) |
(28) |
(55) |
(44) |
Exploration costs |
[11] |
(6) |
(15) |
(7) |
(48) |
(34) |
Earnings from operations |
|
21 |
141 |
83 |
443 |
587 |
(Loss)/gain on financial instruments |
[12] |
(84) |
7 |
(15) |
(118) |
(19) |
Finance
costs |
|
(19) |
(19) |
(15) |
(71) |
(61) |
Earnings before taxes |
|
(82) |
129 |
54 |
254 |
507 |
Current income tax expense |
[13] |
(75) |
(54) |
(48) |
(268) |
(258) |
Deferred income
tax (expense)/recovery |
[14] |
10 |
(2) |
1 |
57 |
8 |
Net comprehensive earnings from continuing
operations |
[15] |
(148) |
74 |
7 |
43 |
257 |
Add-back adjustments |
[16] |
205 |
13 |
19 |
262 |
109 |
Adjusted net earnings from continuing
operations |
|
57 |
87 |
26 |
305 |
366 |
Portion attributable to non-controlling interests |
|
15 |
17 |
12 |
75 |
73 |
Adjusted net earnings from continuing operations
attributable to shareholders of the Company |
[17] |
42 |
69 |
14 |
230 |
293 |
Adjusted net earnings per share from continuing
operations |
|
0.17 |
0.28 |
0.06 |
0.93 |
1.18 |
1 Continuing Operations excludes the Boungou and
Wahgnion mines which were divested on 30 June 2023 and the Karma
mine which was divested on 10 March 2022.
NOTES:
4) Revenue increased by $49.3 million
from $530.0 million in Q3-2023 to $579.3 million in Q4-2023 due to
a $109 per ounce increase in the realised gold price from $1,898
per ounce in Q3-2023 to $2,007 per ounce in Q4-2023, exclusive of
the Company’s Revenue Protection Programme, further compounded by
an increase in gold sales from continuing operations from 278koz in
Q3-2023 to 285koz in Q4-2023 due to the timing of gold sales.
Revenue increased by $45.6 million from $2,069.0
million in FY-2022 to $2,114.6 million in FY-2023 due to a $148 per
ounce increase in the realised gold price, exclusive of the
Company’s Revenue Protection Programme, from $1,791 per ounce in
FY-2022 to $1,939 per ounce in FY-2023, which was partially offset
by a decrease in gold sales from continuing operations from
1,150koz in FY-2022 to 1,084koz in FY-2023 due to lower production
at the Sabodala-Massawa and Mana mines.
5) Operating expenses increased by
$3.4 million from $205.3 million in Q3-2023 to
$208.7 million in Q4-2023 largely due to the matching of
accrued expenses from Q3-2023 associated to ounces produced in
Q3-2023 and subsequently sold in Q4-2023, particularly at
Sabodala-Massawa where ounces sold exceeded quarterly
production.
Operating expenses increased by
$67.2 million from $720.0 million in FY-2022 to
$787.2 million in FY-2023 due to increased mining volumes at
Houndé and Mana, increased processing volumes at Houndé,
Sabodala-Massawa and Ity, increased fuel and consumable costs, and
the impact of the stronger EUR to USD foreign exchange rate
increasing costs in FY-2023 compared to FY-2022.
6) Depreciation and depletion
increased by $18.2 million from $114.4 million in Q3-2023
to $132.6 million in Q4-2023 mainly due to higher production
volumes achieved at Sabodala-Massawa as mining in the Sabodala pit,
which is approaching the end of its mine life, incorporated higher
associated depreciation rates.
Depreciation and depletion decreased by
$27.6 million from $476.0 million in FY-2022 to
$448.4 million in FY-2023 due to lower production volumes in
combination with the lower depreciable base following the 2022
reserves and resource update.
7) Royalties increased by
$8.4 million from $31.9 million in Q3-2023 to
$40.3 million in Q4-2023 due to an increase in the realised
gold price as noted above, higher volumes of gold sold and the
previously disclosed impact of the change in the sliding scale
royalty rates in Burkina Faso, which came into effect in November
2023.
Royalties increased by $9.2 million from
$124.5 million in FY-2022 to $133.7 million in FY-2023
due to an increase in the realised gold price as noted above and
the previously disclosed impact of the change in the sliding scale
royalty rates in Burkina Faso, which came into effect in November
2023, partially offset by lower volumes of gold sold.
8) Corporate costs increased slightly
from $10.4 million in Q3-2023 to $11.1 million in Q4-2023 due to
higher general corporate costs associated with bonus accruals,
partially offset by a reduction in employee compensation due to a
credit in remuneration tied to forfeited compensation from the
Company’s former Chief Executive Officer.
Corporate costs increased slightly from
$47.7 million in FY-2022 to $49.0 million in FY-2023 due
to higher employee and professional service costs partially offset
by a reduction in general corporate overhead.
9) The Group recognised a non-cash
impairment of mining interest and goodwill of $122.6 million
in FY-2023 consisting of $65.7 million recognised against
exploration properties where there is no near term activities
planned and $56.9 million recognised against the Kalana project
based on updated assumptions from the ongoing technical studies.
The recognition of impairments against exploration properties
primarily related to a $32.5 million impairment of the Kamsongo
license on the Nabanga property in Burkina Faso in Q4-2023, $16.9
million recognised against the Afema exploration properties in Côte
d’Ivoire that are in the process of being sold (of which $14.8
million was recognised in Q2-2023 and a further $2.1 million
recognised in Q4-2023), and $16.3 million related to other
exploration properties where there are no intentions to renew the
licenses. In addition, a $56.9 million impairment was recognised on
the Kalana project in Q4-2023 in relation to the envisaged changes
to capital expenditure assumptions within the ongoing technical
study.
10) The Group recognised other
expenses of $54.8 million in FY-2023 consisting of $24.9
million in tax settlements primarily related to indirect taxes at
Sabodala-Massawa, $18.7 million in expected credit losses from
cash receivables related to the Boungou and Wahgnion divestment
(see additional details in the Non-Core Asset Divestment section
below), $9.3 million in impairments of other receivables from
Allied Gold ($5.9 million) and VAT ($3.4 million), a
$4.3 million loss on the disposal of assets, $4.1 million
in expected credit losses from other receivables, $1.8 million
in acquisition and restructuring costs, and $0.8 million in
community donations which were partly offset by $9.1 million
in insurance proceeds received in relation to community
disturbances.
11) Exploration costs decreased by
$9.3 million from $14.9 million in Q3-2023 to
$5.6 million in Q4-2023 as the Group’s exploration programmes
largely focused on analysis and interpretation of drilling results
following the conclusion of the years’ drilling programmes early in
the quarter.
Exploration costs increased by
$13.6 million from $33.9 million in FY-2022 to
$47.5 million in FY-2023 largely due to the increased expense
at the Tanda-Iguela greenfield property, where, as published on 29
November 2023, an extensive drilling programme consisting of
167,436 metres of drilling resulted in the delineation of a 4.5Moz
Indicated resource, grading 1.97 g/t Au, which marked a 303%
increase over the maiden Indicated resource estimate published in
late 2022, thereby confirming its potential to be a Tier 1
asset.
12) The loss on financial instruments
decreased by $91.5 million from a gain of $7.2 million in Q3-2023
to a loss of $84.3 million in Q4-2023 largely due to an increase in
unrealised losses on gold collars and forward sales and the change
in fair value of Net Smelter Return (“NSR”) royalties related to
asset sales partially offset by gains on foreign exchange
movements. The loss on financial instruments in Q4-2023 included
unrealised losses on gold collars and forward sales of $38.9
million, unrealised losses on NSRs related to the Boungou and
Wahgnion divestment of $24.3 million, realised losses on gold
collars and forward contracts of $17.8 million, and unrealised
losses on marketable securities of $11.7 million related to the
$50.0 million investment in Allied Gold shares. Losses on financial
instruments were partially offset by unrealised foreign exchange
gains of $8.0 million, an unrealised gain on foreign currency
contracts of $0.7 million and realised gains on foreign currency
contracts of $0.4 million.
The loss on financial instruments increased by
$98.9 million from a loss of $19.1 million in FY-2022 to a loss of
$118.0 million in FY-2023 and comprised of unrealised losses on
NSRs and deferred consideration related to asset sales of $24.1
million, realised losses on gold collars and forward contracts of
$21.3 million, unrealised losses on gold collars and forward
contracts of $21.2 million, an unrealised loss on marketable
securities of $20.5 million, a fair value loss on the conversion
option of convertible notes of $14.9 million, unrealised foreign
exchange losses of $13.3 million, a loss on the fair value of call
rights of $9.0 million, unrealised losses on foreign currency
contracts of $4.2 million, and a loss on the change in fair value
of contingent considerations of $0.6 million related to Teranga’s
acquisition of the Massawa property. Losses on financial
instruments were partially offset by an unrealised gain on the
conversion of financial assets of $6.6 million related to the
listing of Allied Shares and a realised gain on foreign currency
contracts of $4.0 million and a gain on other financial instruments
of $0.5 million.
As previously disclosed, in order to increase
cash flow visibility during its construction and de-leveraging
phases, Endeavour entered into a Revenue Protection Programme,
using a combination of zero premium gold collars and forward sales
contracts, to cover a portion of its 2023, 2024 and 2025
production.
-
During Q4-2023, 30koz were settled into forward sales contracts for
an average gold price of $1,828/oz.
-
For FY-2024, approximately 450koz (approximately 113koz per
quarter), are expected to be delivered into a collar with an
average call price of $2,400/oz and an average put price of
$1,807/oz. In addition, during H1-2024, a total of approximately
70koz (approximately 35koz per quarter) are expected to be settled
in forward sales contracts with an average gold price of
$2,033/oz.
-
For FY-2025, approximately 200koz (approximately 50koz per quarter)
are expected to be delivered into a collar with an average call
price of $2,400/oz and an average put price of $1,992/oz.
As previously disclosed, Endeavour
entered into a Growth Capital Protection Programme designed to
enhance cost certainty for a portion of its growth capital
expenditure at its Sabodala-Massawa expansion and Lafigué growth
projects. The Group had entered into various foreign exchange
forward contracts across both the Euro and the Australian Dollar
over 2023 and 2024.
-
During Q4-2023, €13.6 million was delivered into forward contracts
at a blended rate of 1.03 EUR:USD and AU$6.5 million was delivered
into forward contracts at a blended rate of 0.69 AUD:USD.
-
The total outstanding notional forward contracted quantum is
approximately €13.0 million at a blended rate of 1.04 EUR:USD and
approximately AU$5.7 million at a blended rate of 0.69 AUD:USD for
2024.
13) Current income tax expense
increased by $21.3 million from $53.5 million in Q3-2023 to $74.8
million in Q4-2023 largely due to the recognition of withholding
tax expenses of $30.1 million following local Board approvals for
cash upstreaming at Ity and increased corporate taxes following
higher taxable earnings during the quarter.
Current income tax expense increased by $10.1
million from $257.8 million in FY-2022 to $267.9 million in FY-2023
due to higher withholding tax expenses following larger amounts of
cash upstreamed this year, partially offset by lower taxable
earnings in FY-2023.
14) Deferred income tax increased by
$11.3 million from the deferred income tax expense of $1.6 million
in Q3-2023 to a deferred income tax recovery of $9.7 million in
Q4-2023 mainly due to the deferred tax impact of the impairment of
the Kalana project, partially offset by the effect of foreign
exchange remeasurements on deferred tax balances.
Deferred income tax recovery increased by $49.6
million from $7.5 million in FY-2022 to $57.1 million in FY-2023
largely due to the reversal of deferred tax liabilities that were
previously recognised on mining interests. These liabilities arose
from the difference between Sabodala-Massawa’s tax base and
accounting base, which included fair value adjustments when it was
initially acquired. In addition, the impairment of the Kalana
project reduced its carrying value and the associated deferred tax
liability, which also arose when the project was acquired.
15) Net comprehensive earnings from
continuing operations decreased by $221.1 million from net
comprehensive earnings of $73.6 million in Q3-2023 to a net
comprehensive loss of $147.5 million in Q4-2023. The decrease in
earnings is largely driven by the loss on financial instruments
following the mark-to-market of gold collars, forward contracts and
changes in foreign exchange rates in addition to the change in fair
value of NSRs and marketable securities, the non-cash impairment
charge on mineral interests, higher other expenses reflecting the
impairment of deferred cash consideration from asset disposals and
tax claims related to Sabodala-Massawa, higher tax expenses driven
by the recognition of withholding taxes during the quarter and
higher royalties.
Net comprehensive earnings from continuing
operations decreased by $214.1 million from $256.8 million in
FY-2022 to $42.7 million in FY-2023. The decrease in earnings is
largely driven by the loss on financial instruments following the
mark-to-market of gold collars, forward contracts and changes in
foreign exchange rates, the non-cash impairment charge on mineral
interests, higher tax expenses, higher exploration expense, and
lower earnings from mine operations due to higher operating
expenses and royalties.
16) For Q4-2023, adjustments included
a non-cash impairment charge of $107.8 million as discussed above,
a net loss on financial instruments of $66.5 million related to the
unrealised loss on forward sales and collars and change in fair
value of NSRs and marketable securities, other expenses of $45.1
million primarily related to the impairment of the deferred cash
consideration mentioned above and a net loss from discontinued
operations of $2.4 million related to a tax payment for the
disposed Karma mine, partially offset by a gain on non-cash, tax
and other adjustments of $14.8 million that mainly relate to the
impact of foreign exchange remeasurements of deferred tax
balances.
For FY-2023, adjustments included an impairment
charge of $122.6 million related to the Group’s exploration permit
portfolio and the Kalana project, a net loss on financial
instruments of $96.7 million, related to the unrealised loss on
forward sales and collars and a change in fair value of NSRs and
marketable securities and the fair value loss on the convertible
option of convertible notes and other expenses of $54.8 million,
partly offset by a gain on non-cash, tax and other adjustments of
$11.8 million that mainly relate to the impact of the foreign
exchange remeasurement of deferred tax balance.
17) Adjusted net earnings
attributable to shareholders for continuing operations decreased by
$27.4 million from $69.5 million (or $0.28 per share) in Q3-2023 to
$42.1 million (or $0.17 per share) in Q4-2023, due to higher tax
expense, higher depreciation, higher realised losses on gold
forwards and higher royalties.
Adjusted net earnings attributable to
shareholders for continuing operations decreased by $62.4 million
from $292.7 million (or $1.18 per share) in FY-2022 to $230.2
million (or $0.93 per share) in FY-2023 due to lower operating
margins, higher exploration costs, higher taxes and higher realised
losses on gold forwards.
SUMMARISED STATEMENT OF FINANCIAL POSITION
The table below presents the summarised
statement of financial position and liquidity for the Group as at
31 December 2023, and 31 December 2022, with accompanying
explanations below.
Table 6: Summarised Statement of
Financial Position
All amounts in US$ million unless otherwise specified |
Note |
As at 31 December 2023 |
As at 31 December 2022 |
ASSETS |
|
|
|
Cash and cash
equivalents |
|
517 |
951 |
Other current
assets |
[18] |
603 |
495 |
Total current assets |
|
1,120 |
1,446 |
Mining
interests |
[19] |
4,157 |
4,517 |
Other long term
assets |
[20] |
581 |
451 |
TOTAL ASSETS |
|
5,859 |
6,415 |
LIABILITIES |
|
|
|
Other current
liabilities |
[21] |
439 |
462 |
Current portion
of debt |
[22] |
9 |
337 |
Income taxes
payable |
[23] |
166 |
247 |
Total current liabilities |
|
613 |
1,046 |
Long-term
debt |
[24] |
1,060 |
488 |
Environmental
rehabilitation provision |
|
115 |
165 |
Other long-term
liabilities |
|
58 |
54 |
Deferred income
taxes |
|
464 |
575 |
TOTAL LIABILITIES |
|
2,310 |
2,327 |
TOTAL EQUITY |
|
3,548 |
4,087 |
TOTAL EQUITY AND LIABILITIES |
|
5,859 |
6,415 |
|
|
|
|
NOTES:
18) Other current assets as at 31
December 2023 consisted of $224.9 million of inventories, $269.2
million of trade and other receivables, $39.2 million of prepaid
expenses and other, and $69.7 million of other financial
assets.
-
Inventories decreased by $95.8 million from
$326.3 million as at 31 December 2022 to $224.9 million
as at 31 December 2023, primarily due to a reduction in spare parts
and supplies as a result of the divestment of the Boungou and
Wahgnion mines and reclassification of certain ore stockpiles to
long-term at Sabodala-Massawa as they are not expected to be
processed in the next twelve months.
-
Trade and other receivables increased by $162.3 million from
$118.4 million as at 31 December 2022 to $269.2 million
as at 31 December 2023, primarily due to the consideration-related
receivables following the divestment of the Boungou and Wahgnion
mines of $111.4 million, an increase in gold sales receivables
of $24.5 million due to timing of shipments, an increase in
VAT receivables of $30.6 million and an increase in other
receivables of $9.5 million related primarily to the residual
working capital payment outstanding for the sale of the Boungou and
Wahgnion mines. These factors were partly offset by the decrease in
advance payments of $13.7 million following the divestment of
Boungou and Wahgnion.
-
Prepaid expenses and other decreased by $11.9 million from
$58.9 million as at 31 December 2022 to $39.2 million as
at 31 December 2023, primarily due to the reclassification of the
investment in Allied shares after public listing from marketable
securities to financial assets and the removal of Boungou and
Wahgnion related prepayments. This was in part offset by an
increase in insurance and security prepayments across the
continuing Group.
-
Other financial assets increased by $53.1 million from $3.7 million
as at 31 December 2022 to $69.7 million as at 31 December 2023
primarily due to the addition of the current portion of the net
smelter royalty (“NSR”) and deferred portion of the consideration
for the sale of Boungou and Wahgnion.
19) Mining Interests decreased by
$359.9 million from $4,517.0 million as at 31 December 2022 to
$4,157.1 million as at 31 December 2023 due to the divestment of
the Boungou and Wahgnion assets on 30 June 2023, the impairment on
the Kalana project and the impairment of exploration properties,
partly offset by $762.6 million of capital expenditure on mining
interests during the year.
20) Other long-term assets increased
by $129.9 million from $451.3 million as at 31 December 2022 to
$581.2 million as at 31 December 2023 and consisted of $323.6
million of long-term stockpiles not expected to be processed in the
next twelve months at the Houndé, Ity and Sabodala-Massawa mines,
$134.4 million of goodwill allocated to the Sabodala-Massawa and
Mana mines, other financial assets of $123.2 million that primarily
comprise the deferred cash and NSR consideration elements of the
sale of Boungou, Wahgnion and Karma mines, and $41.1 million of
restricted cash mainly relating to reclamation bonds.
21) Other current liabilities
decreased by $23.2 million from $461.9 million as at 31 December
2022 to $438.7 million as at 31 December 2023 and consisted of
$406.9 million of trade and other payables, $17.5 million
of other financial liabilities consisting of foreign currency, gold
forward derivative contracts, PSU and DSU liabilities, and
$14.3 million of lease liabilities. Trade and other payables
increased by $52.3 million due to dividends payable to the
minority shareholders at Ity and an increase in payables related to
the BIOX® and Lafigué growth projects, in part offset by the
de-recognition of the Boungou and Wahgnion associated payables
following their disposal. Other financial liabilities decreased
primarily due to the settlements of the Barrick contingent
liability of $50.0 million and the call-rights liability of $28.5
million, in part offset by an increase in derivative financial
liabilities.
22) The current portion of debt
decreased by $328.1 million from $336.6 million as at 31
December 2022 to $8.5 million as at 31 December 2023 due to
the settlement of the Convertible Notes and the associated
conversion option during Q1-2023, of which the principal of $330.0
million was repaid in cash at the Company’s election and 835,254
shares were issued to holders of the Convertible Notes to settle
the in the money option of $19.2 million as the share price was at
a premium to the strike price at maturity.
23) Income taxes payable decreased by
$80.9 million from $247.1 million as at 31 December 2022
to $166.2 million as at 31 December 2023 due largely to the
de-recognition of Wahgnion and Boungou associated payables, the
payment of tax assessments and the timing of 2023 provisional and
2022 true-up tax payments during FY-2023, partly offset by
additional income tax expense accrued during FY-2023.
24) The non-current portion of
long-term debt increased by $571.8 million from $488.1 million as
at 31 December 2022 to $1,059.9 million as at 31 December 2023
due to the additional draw down on the RCF and the Lafigué Term
Loan facility.
Table 7: Summarised Statement of
Financial Position
|
|
THREE MONTHS ENDED |
YEAR ENDED |
All amounts in US$ million unless otherwise specified |
|
31 December2023 |
30 September2023 |
31 December2022 |
31 December2023 |
31 December2022 |
Cash and cash equivalents |
[25] |
517 |
625 |
951 |
517 |
951 |
Principal amount
of $500m Senior Notes |
|
500 |
500 |
500 |
500 |
500 |
Drawn portion of
$645m Revolving Credit Facility |
|
465 |
535 |
— |
465 |
— |
Local term loan
financing |
|
107 |
35 |
— |
107 |
— |
Principal amount of Convertible Notes |
|
— |
— |
330 |
— |
330 |
Net Debt / (Net Cash)1 |
[26] |
555 |
445 |
(121) |
555 |
(121) |
Trailing twelve month adjusted EBITDA1,2 |
|
1,101 |
1,113 |
1,284 |
1,101 |
1,284 |
Net Debt (Net Cash) / Adjusted EBITDA (LTM)
ratio1,2 |
|
0.50x |
0.40x |
(0.09)x |
0.50x |
(0.09)x |
1Net debt, Adjusted EBITDA, and cash flow per
share are Non-GAAP measures. Refer to the non-GAAP measure section
in this press release and in the Management Report. 2Last Twelve
Months (“LTM”) Trailing EBITDA adj. includes EBITDA generated by
discontinued operations.
25) At quarter end, Endeavour’s
liquidity remained strong at $757.1 million, consisting of $517.2
million of cash and cash equivalents, $180.0 million available
through the Company’s revolving credit facility and $59.9 million
available through the Lafigué term loan.
26) Endeavour’s net debt position has
increased by $109.9 million, from $445.0 million at the end of
Q3-2023 to $555.0 million at the end of Q4-2023. The net debt /
Adjusted EBITDA (LTM) leverage ratio increased from 0.40x at the
end of Q3-2023 to 0.50x at the end of Q4-2023.
NON-CORE ASSET DIVESTMENT
-
On 30 June 2023, Endeavour closed the divestment of its 90%
interests in its non-core Boungou and Wahgnion mines in Burkina
Faso to Lilium Mining ("Lilium"), a subsidiary of Lilium Capital
which is an African and frontier markets focused strategic
investment vehicle led by West African entrepreneurs.
-
The total consideration is comprised of:
-
$130.0 million in the form of a reimbursement of historical
shareholder loans, of which a total of $33.0 million has been
received to date. The remaining $97.0 million is outstanding.
-
$25.0 million in deferred cash consideration payable in two
instalments of $10.0 million, which became payable in Q1-2024 and
has not been received, and $15.0 million, which will become payable
in Q2-2024.
-
A deferred cash consideration comprised of 50% of the net free
cashflow generated by the Boungou mine until $55.0 million has been
paid. No payments have thus far been received for this deferred
cash consideration as Lilium has not had any commercial production
from Boungou since their acquisition given their election to place
the mine on care and maintenance due to supply chain and security
challenges.
-
An NSR on Wahgnion commencing at closing of the transaction for
4.0% of gold sold, of which a total of approximately $2.6 million
has been received as at 31 December 2023.
-
An NSR on Boungou commencing at closing of the transaction for 4.0%
of gold sold, of which a total of approximately $0.5 million has
been received as at 31 December 2023.
-
Endeavour recorded an $18.7 million expected credit loss on the
outstanding upfront and deferred cash considerations expected to be
received from the divestment of the Boungou and Wahgnion mines in
Q4-2023. The expected credit loss was calculated using an
International Financial Reporting Standard (“IFRS”) provision based
on a probability of default (25%) and expected loss on default
(60%) applied against the outstanding cash consideration.
-
In Q4-2023, Endeavour also recorded a $24.3 million unrealised loss
on financial instruments related to the fair value change of the
Boungou and Wahgnion NSRs, based on the performance of the assets
since the divestment to reflect reduced resource upside assumptions
within the expected NSRs proceeds. The updated life-of-mine
scenario assumes production is limited to Proven and Probable
reserves only.
-
Following the completion of the divestment on 30 June 2023, and
owing to the significant delay in receipt of payment for the
overdue proceeds of the total consideration, Endeavour has filed
certain claims against Lilium and its financial institutions as
detailed below:
- Endeavour Canada
Holdings Corporation (“ECH”) and Endeavour Gold Corporation
(“EGC”), wholly owned subsidiaries of the Company, have certain
claims (“Claims”) under the terms of (i) a sale and purchase
agreement between ECH and Lilium Gold (“LG”) and Lilium Holdings
Ltd (“LH”, together with LG, “Lilium”) (the “SPA”) relating to the
non-core asset divestment; and (ii) two stand-by letters of credit
between related financial institutions in Burkina Faso (the
“Financial Institutions”) and each of EGC and ECH (the “SBLCs”),
which were established to reimburse historical shareholder loans to
the Endeavour group.
- The SPA Claim concerns the failure of
Lilium to fulfil certain payment obligations under the SPA in
relation to the shareholder loans as well as deferred
consideration. The SBLC Claim concerns the failure of the Financial
Institutions to honour their parallel payment obligations in
relation to the shareholder loans under the SBLCs. The Company has
filed for arbitration proceedings against both Lilium (with the
London Court of International Arbitration in London) and the
Financial Institutions (with the International Chamber of Commerce
in Paris) on 1 March, 2024 and 29 February, 2024, respectively.
Claims against Lilium are approximately $125.0 million, and claims
against the Financial Institutions are approximately $99.0 million
(in each case excluding interests and costs).
OPERATING SUMMARY
-
As previously disclosed, on 28 February 2024, we were saddened to
report that a contractor colleague passed away on 27 February 2024,
as a result of injuries sustained in an incident that occurred
during maintenance activities at the Mana mine in Burkina Faso. The
health, safety and welfare of our colleagues are our top priority
and we extend our sincere sympathies and support to his family,
colleagues and friends. Endeavour has conducted a comprehensive
internal investigation into the incident and is focussed on
improvements to training, front-line supervision and reviewing
operational procedures.
-
The Group demonstrated strong safety performance in FY-2023, with a
Lost Time Injury Frequency Rate (“LTIFR”) from continuing
operations of 0.05. Endeavour will continue to prioritise safety in
accordance with its zero-harm target.
-
Q4-2023 production from continuing operations amounted to 280koz
and was flat over Q3-2023 as the anticipated decrease at Houndé was
offset by increases at Sabodala-Massawa (albeit by less than
anticipated due to the lower grades encountered in the Sabodala pit
as it enters its final phase of mining) and Mana, while Ity
remained flat. The all-in sustaining costs ("AISC") decreased by
$20/oz or 2.1% over Q3-2023 to approximately $947/oz despite a
$24/oz increase in royalty costs linked to the higher realised gold
price and the impact of the change in the sliding scale royalty
rates in Burkina Faso, which came into effect in November 2023. The
AISC benefitted from reductions at Sabodala-Massawa and Mana, which
was offset by the increase at Houndé while Ity remained flat.
-
FY-2023 production from continuing operations amounted to 1,072koz,
achieving the guided 1,060-1,135koz range and marking the 11th
consecutive year of achieving or beating production guidance. The
AISC from continuing operations amounted to an industry-leading
$967/oz for FY-2023. As shown in the table below, Endeavour
achieved near the top-end of the guided $895-950/oz AISC range,
albeit 1.8% (representing $17/oz) above due to royalties being
$18/oz higher than anticipated due to a higher realised gold price
($1,939/oz compared to the guidance gold price of $1,750/oz) and
the increase in the Burkina Faso royalty rate which came into
effect in November 2023.
Table 8: Group Production and All-In
Sustaining Cost from Continuing Operations Compared to
Guidance
|
2023 ACTUALS |
2023 GUIDANCE |
PRODUCTION FROM CONTINUING OPERATIONS |
1,072 |
1,060 |
— |
1,135 |
AISC FROM CONTINUING OPERATIONS BEFORE ROYALTY COSTS,
$/oz |
844 |
790 |
— |
845 |
Royalty cost, $/oz1 |
123 |
|
105 |
|
AISC FROM CONTINUING OPERATIONS, $/oz |
967 |
895 |
— |
950 |
12023 AISC guidance was based on a gold price of $1,750/oz
compared to the realised gold price of $1,952/oz
-
FY-2023 production from continuing operations of 1,072koz,
decreased by 89koz or 8% over the 1,161koz produced in FY-2022 due
to lower production at Mana (due to the transition from an open-pit
to an underground operation at the Wona deposit) and at
Sabodala-Massawa (due to mining and processing of lower grade ore),
while both Houndé and Ity achieved record annual production.
-
FY-2023 AISC from continuing operations increased by $118/oz, from
$849/oz in FY-2022 to approximately $967/oz in FY-2023, as AISC
increased at Houndé, Mana, Sabodala-Massawa and at Corporate, in
addition to a $15/oz increase in royalty costs (from $108/oz in
FY-2022 to $123/oz in FY-2023), which was partially offset by a
decrease in AISC at Ity. The FY-2023 AISC from continuing
operations increased by $3/oz from the preliminary $964/oz
published on 22 January 2024 due to a reclassification of
underground development costs at Mana, which was partially offset
by a reduction in corporate costs tied to the former Chief
Executive Officer’s forfeited compensation.
Table 9: Group Production
|
THREE MONTHS ENDED |
YEAR ENDED |
All amounts in koz, on a 100% basis |
31 December2023 |
30 September2023 |
31 December2022 |
31 December2023 |
31 December2022 |
Houndé |
84 |
109 |
63 |
312 |
295 |
Ity |
74 |
73 |
82 |
324 |
313 |
Mana |
37 |
30 |
46 |
142 |
195 |
Sabodala-Massawa |
85 |
69 |
103 |
294 |
358 |
PRODUCTION FROM CONTINUING OPERATIONS |
280 |
281 |
294 |
1,072 |
1,161 |
Boungou1 |
— |
— |
26 |
33 |
116 |
Wahgnion1 |
— |
— |
36 |
68 |
124 |
Karma2 |
— |
— |
— |
— |
10 |
GROUP PRODUCTION |
280 |
281 |
355 |
1,173 |
1,410 |
1The Boungou and Wahgnion mines were divested on 30 June 2023.
2The Karma mine was divested on 10 March 2022.
Table 10: Group All-In Sustaining
Costs
All amounts in US$/oz |
THREE MONTHS ENDED |
YEAR ENDED |
31 December2023 |
30 September2023 |
31 December2022 |
31 December2023 |
31 December2022 |
Houndé |
901 |
787 |
969 |
943 |
809 |
Ity |
865 |
864 |
847 |
809 |
812 |
Mana |
1,482 |
1,734 |
999 |
1,427 |
994 |
Sabodala-Massawa |
700 |
840 |
661 |
767 |
691 |
Corporate G&A |
41 |
40 |
52 |
48 |
43 |
AISC FROM CONTINUING OPERATIONS |
947 |
967 |
885 |
967 |
849 |
Boungou1 |
— |
— |
1,118 |
1,639 |
1,064 |
Wahgnion1 |
— |
— |
1,376 |
1,566 |
1,525 |
Karma2 |
— |
— |
— |
— |
1,504 |
GROUP AISC3 |
947 |
967 |
954 |
1,021 |
933 |
1The Boungou and Wahgnion mines were divested on 30 June 2023.
2The Karma mine was divested on 10 March 2022. 3This is a non-GAAP
measure, refer to the non-GAAP Measures section for further
details.
2024 OUTLOOK
-
As published on 22 January 2023, the production guidance for
FY-2024 amounts to 1,130-1,270koz, which marks an increase of up to
nearly 200koz or 18.5% over the FY-2023 production from continuing
operations of 1,072koz. This is largely due to the start-up of the
Sabodala-Massawa BIOX® Expansion project, expected in early May and
the Lafigué project, expected in Q2-2024. The AISC is expected to
remain consistent with that achieved over recent quarters at an
industry-low $955-1,035/oz.
-
Group production is expected to be more heavily weighted towards
H2-2024 while AISC is also expected to be lower in H2-2024 as the
Group's organic growth projects are expected to significantly
increase the quality of Endeavour's portfolio and performance at
the Houndé mine is expected to be weighted towards H2-2024, due to
the mine sequence and a temporary disruption to mining and
processing activities due to a strike that occurred during Q1-2024.
On 23 January 2024 a strike, led by a sub-contractor, at the Houndé
mine resulted in a temporary stoppage of mining and processing
activities that lasted for 11 days. The disruption is not expected
to impact full year production and AISC guidance for the Houndé
mine or the Group. More details on individual mine guidances have
been provided in the below sections.
-
Total mine capital expenditure for FY-2024, consisting of both
sustaining and non-sustaining capital spend, is expected to be
approximately $315.0 million, which marks a decrease of $19.2
million or 6% compared to the FY-2023 expenditure.
-
Growth capital spend for FY-2024 is expected to amount to
approximately $245.0 million, which marks a decrease of $202.5
million or 45% compared to the FY-2023 expenditure of $447.5
million. The FY-2024 expenditure is expected to consist of
approximately $75.0 million of remaining growth capital for the
Sabodala-Massawa BIOX® Expansion project and approximately $170.0
million of remaining growth capital for the Lafigué project.
-
Exploration will continue to be a strong focus in FY-2024 with a
company-wide exploration budget of $65.0 million. For FY-2024,
approximately $15.0 million will be spent on the highly prospective
Tanda-Iguela property in Côte d'Ivoire, which already ranks as one
of the most significant discoveries made in West Africa over the
last decade. Details on individual asset exploration programmes are
provided in the operations section below.
OPERATING ACTIVITIES BY
MINE
Houndé Gold Mine, Burkina
Faso
Table 11: Houndé Performance
Indicators
For The Period Ended |
Q4-2023 |
Q3-2023 |
Q4-2022 |
|
FY-2023 |
FY-2022 |
Tonnes ore mined, kt |
1,499 |
1,209 |
1,912 |
|
5,420 |
5,754 |
Total tonnes
mined, kt |
11,993 |
10,603 |
12,901 |
|
47,680 |
45,490 |
Strip ratio
(incl. waste cap) |
7.00 |
7.77 |
5.75 |
|
7.80 |
6.91 |
Tonnes milled,
kt |
1,360 |
1,400 |
1,359 |
|
5,549 |
5,043 |
Grade, g/t |
2.15 |
2.68 |
1.55 |
|
1.92 |
1.92 |
Recovery rate,
% |
90 |
91 |
92 |
|
91 |
93 |
Production, koz |
84 |
109 |
63 |
|
312 |
295 |
Total cash cost/oz |
837 |
704 |
793 |
|
835 |
701 |
AISC/oz |
901 |
787 |
969 |
|
943 |
809 |
Q4-2023 vs Q3-2023 Insights
-
Production decreased from 109koz in Q3-2023 to 84koz in Q4-2023,
due to lower processed grades and slightly lower throughput and
recoveries.
-
Total tonnes mined increased due to higher utilisation of the
mining fleet following the end of the wet season. Tonnes of ore
mined increased as a higher volume of ore was mined in the Vindaloo
Main pit, following waste stripping activity that completed in
Q3-2023, which was partially offset by the lower volumes of ore
mined from the Kari Pump and Kari West pits, which was in-line with
mine sequencing.
-
Tonnes milled decreased slightly due to a higher proportion of
harder transitional and fresh ore in the mill feed.
-
Processed grades decreased due to lower grade oxide ore sourced
from the Kari Pump pit as well as a greater proportion of lower
grade Kari West and Vindaloo Main ore.
-
Recovery rates decreased slightly due to a higher proportion of
transitional and fresh ore, with lower associated recoveries in the
mill feed.
-
AISC increased from $787/oz in Q3-2023 to $901/oz in Q4-2023 due to
lower production and sales, driven by the lower average grade in
the ore blend, this was partially offset by a decrease in mining
unit costs with the increase in volumes in Q4-2023 and a reduction
in sustaining capital.
-
Sustaining capital expenditure decreased from $9.0 million in
Q3-2023 to $5.4 million in Q4-2023 and primarily related to waste
development at the Kari West pit, plant equipment upgrades and
heavy mining equipment maintenance.
-
Non-sustaining capital expenditure increased from $3.3 million in
Q3-2023 to $7.6 million in Q4-2023, and primarily related to the
ongoing waste development at the Kari Pump pit and the stage 8 and
9 tailings storage facility (“TSF”) raises.
FY-2023 vs FY-2022 Insights
-
FY-2023 production totalled a record 312koz, exceeding the guided
270-285koz range, due to higher than expected grades from the Kari
Pump pit as well as better than expected mill performance following
the completion of processing plant optimisation initiatives that
improved mill availability and reduced blockages. FY-2023 AISC
amounted to approximately $943/oz, which was above the $850-925/oz
guided range due to higher royalty payments, in addition to
increases in consumable costs and longer waste hauling distances
during the year.
-
Production increased from 295koz in FY-2022 to 312koz in FY-2023
due to increased mill throughput, driven by optimisation
initiatives, which was partially offset by slightly lower
recoveries due to changes in the ore blend. AISC increased from
$809/oz in FY-2022 to $943/oz in FY-2023 due to higher royalty
costs, higher sustaining capital expenditure and higher mining and
processing costs following fuel and consumable cost increases.
2024
Outlook
-
Houndé is expected to produce between 260-290koz in FY-2024 at AISC
of $1,000-1,100/oz.
-
On 23 January 2024 a strike led by a sub-contractor at the Houndé
mine resulted in a temporary stoppage of mining and processing
activities lasting 11 days. The stoppage is expected to impact
Q1-2024 production and AISC, but at this stage it is not expected
to impact full year production and AISC guidance, with mine plan
optimisation strategies underway in order to catch up lost
production through the remainder of the year.
-
Mining activities are expected to continue to focus on the Vindaloo
Main, Kari Pump, and Kari West pits. In H1-2024, ore is expected to
be primarily sourced from the Kari West pit while stripping
activities focus on the Kari Pump and Vindaloo Main pits, while in
H2-2024, a greater volume of ore is expected to be mined from the
higher grade Kari Pump pit. Production is expected to be weighted
towards H2-2024 with greater volumes of higher grade ore from the
Kari Pump pit expected to be mined in H2-2024. Tonnes of ore milled
are expected to decrease in FY-2024 as a lower proportion of soft
oxide ore from the Kari West pit is anticipated in the ore blend as
the Kari West pit advances into harder transitional and fresh ore.
The increase in the proportion of harder transitional and fresh
material in the ore blend is expected to result in a slight
decrease in grades and processing recoveries in addition to
slightly higher mining and processing unit costs, driving higher
AISC compared to FY-2023. In addition, royalty costs are expected
to be higher due to the higher prevailing current gold price and
the change in the sliding scale royalty rates that became effective
in November 2023 in Burkina Faso (with the new rate resulting in a
$28/oz increase at a gold price of $1,850/oz).
-
Sustaining capital expenditure is expected to increase from
$33.9 million in FY-2023 to approximately $40.0 million
in FY-2024, and primarily relates to waste stripping at the Kari
Pump and Kari West pits, mining fleet component rebuilds and
replacements, processing plant equipment upgrades and dewatering
borehole drilling.
- Non-sustaining
capital expenditure is expected to decrease from $38.3 million
in FY-2023 to approximately $20.0 million in FY-2024, and
primarily relates to stripping activity associated with a push back
at the Vindaloo Main pit, the stage 8/9 TSF raise and land
compensation for the third TSF cell.
Ity Gold Mine, Côte
d’Ivoire
Table 12: Ity Performance
Indicators
For The Period Ended |
Q4-2023 |
Q3-2023 |
Q4-2022 |
|
FY-2023 |
FY-2022 |
Tonnes ore mined, kt |
1,721 |
1,246 |
1,662 |
|
6,790 |
7,044 |
Total tonnes
mined, kt |
7,349 |
6,020 |
6,043 |
|
27,891 |
23,946 |
Strip ratio
(incl. waste cap) |
3.27 |
3.83 |
2.64 |
|
3.11 |
2.40 |
Tonnes milled,
kt |
1,593 |
1,494 |
1,710 |
|
6,714 |
6,351 |
Grade, g/t |
1.63 |
1.60 |
1.73 |
|
1.63 |
1.80 |
Recovery rate,
% |
91 |
93 |
87 |
|
92 |
85 |
Production, koz |
74 |
73 |
82 |
|
324 |
313 |
Total cash cost/oz |
829 |
826 |
816 |
|
777 |
769 |
AISC/oz |
865 |
864 |
847 |
|
809 |
812 |
Q4-2023 vs Q3-2023 Insights
-
Production remained flat at 74koz in Q4-2023 as higher tonnes
milled and higher processing grades were offset by lower
recoveries.
-
Total tonnes mined increased, as anticipated, due to increased
mining rates following the wet season in the prior quarter and
increased stripping activities at the Walter pit cutback.
Similarly, tonnes of ore mined increased following the end of the
wet season as ore mining focussed on the Ity, Walter, Bakatouo and
Le Plaque pits, with supplemental contributions from the Verse
Ouest pit and stockpiles.
-
Tonnes milled increased due to higher crusher availability
following the wet season impact in the prior quarter.
-
Processed grades increased slightly due to higher volumes of higher
grade ore sourced from the Ity and Bakatouo pits in the mill feed,
which was partially offset by lower grade ore sourced from the
Walter and Le Plaque pits during the quarter.
-
Recovery rates decreased slightly due to a higher proportion of
fresh ore, with lower associated recoveries, in the mill feed.
-
AISC remained flat at $865/oz in Q4-2023 as higher royalty rates
associated with higher gold prices were offset by lower processing
unit costs associated with increased processing volumes following
the end of the wet season.
-
Sustaining capital expenditure remained flat at $2.7 million
in Q4-2023 and primarily related to dewatering borehole drilling
and plant equipment upgrades.
- Non-sustaining capital expenditure
slightly increased from $23.3 million in Q3-2023 to
$26.0 million in Q4-2023 and primarily related to cut back
activities at the Walter pit, TSF 2 construction, development of
the Mineral Sizer and Recyn optimisation initiatives.
FY-2023 vs FY-2022 Insights
- FY-2023 production totalled a
record 324koz, exceeding the guided 285-300koz range, due to higher
than expected throughput as a high proportion of soft oxide ore was
mined, largely from the Le Plaque pit, which was supported by the
continued use of the surge bin, and higher than expected
recoveries. FY-2023 AISC amounted to approximately $809/oz, which
was below the guided $840-915/oz range, largely due to higher than
expected gold sales volumes in addition to lower than expected
mining and processing unit costs as a result of higher than
expected volumes of ore mined and processed.
-
Production increased from 313koz in FY-2022 to 324koz in FY-2023
following an increase in throughput rates due to the processing of
a greater proportion of softer oxide ore and an increase in
recovery rates related to the cessation of mining at the Daapleu
pit in 2023, which was partially offset by lower average processed
grades. FY-2023 AISC decreased slightly from $812/oz in FY-2022 to
$809/oz in FY-2023 due to the increase in gold sales volume and
lower sustaining capital expenditure.
2024 Outlook
-
Ity is expected to produce between 270 - 300koz at an AISC of $850
- $925/oz.
-
Ore mining activities are expected to focus on the Ity, Bakatouo,
Walter, Le Plaque and Daapleu pits, which will be supplemented with
ore from the Verse Ouest pit and stockpiles. Production is expected
to be slightly higher in the first half of the year due to greater
availability of high grade ore from the Ity and Bakatouo pits in
the mine plan and the wet season impact in H2-2024 on mining and
milling rates. Throughput is expected to be slightly higher than in
FY-2023, due to the commissioning of the Mineral Sizer in H2-2024,
which is expected to increase throughput rates during the wet
season. Milled grades and recoveries are expected to decrease
slightly compared to FY-2023, due to the introduction of lower
grade semi-refractory ore from the Daapleu pit. AISC is expected to
increase in FY-2024 due to the guided lower levels of production
and gold sales.
-
Sustaining capital expenditure is expected to be consistent with
FY-2023 at approximately $10.0 million in FY-2024 and is
primarily related to waste stripping activities across several
pits, de-watering borehole drilling and processing plant upgrades
and replacements.
- Non-sustaining
capital expenditure is expected to decrease from
$102.8 million in FY-2023 to approximately $45.0 million
in FY-2024, and is primarily related to pre-stripping activity at
the Daapleu pit, TSF 2 earthworks and site infrastructure, in
addition to the ongoing Mineral Sizer development and other smaller
optimisation initiatives. The Mineral Sizer, which was launched in
2023 for a total capex of $19.0 million, is expected to be
commissioned in H2-2024, and will add an additional primary crusher
for the oxide ores in order to sustain higher plant throughput
rates regardless of the ore blend.
Mana Gold Mine, Burkina
Faso
Table 13: Mana Performance
Indicators
For The Period Ended |
Q4-2023 |
Q3-2023 |
Q4-2022 |
|
FY-2023 |
FY-2022 |
OP tonnes ore mined, kt |
169 |
297 |
338 |
|
1,298 |
1,260 |
OP total tonnes
mined, kt |
805 |
1,508 |
1,057 |
|
6,001 |
3,615 |
OP strip ratio
(incl. waste cap) |
3.77 |
4.08 |
2.13 |
|
3.62 |
1.87 |
UG tonnes ore
mined, kt |
432 |
349 |
299 |
|
1,314 |
944 |
Tonnes milled,
kt |
515 |
643 |
643 |
|
2,443 |
2,607 |
Grade, g/t |
2.59 |
1.66 |
2.33 |
|
2.01 |
2.49 |
Recovery rate,
% |
89 |
88 |
93 |
|
91 |
92 |
Production, koz |
37 |
30 |
46 |
|
142 |
195 |
Total cash cost/oz |
1,207 |
1,599 |
941 |
|
1,284 |
943 |
AISC/oz |
1,482 |
1,734 |
999 |
|
1,427 |
994 |
Q4-2023 vs Q3-2023 Insights
-
Production increased from 30koz in Q3-2023 to 37koz in Q4-2023 due
to a higher processed grade, partially offset by lower tonnes
milled.
-
Total open pit tonnes mined decreased as mining rates at the Maoula
open pit decreased as the pit approaches the end of its economic
mine life.
-
Total underground tonnes of ore mined increased as stope production
accelerated at the Wona and Siou Underground deposits. Underground
development continued to ramp-up with 3,059 metres of development
completed across both Siou and Wona compared to 2,685 metres of
development completed in the prior quarter.
-
Tonnes milled decreased as tonnes of ore mined from the Maoula open
pit decreased and the plant was limited to available ore from
underground sources.
-
Average grades processed increased due to a higher proportion of
higher-grade ore from stope production at the Wona and Siou
underground deposits in the mill feed replacing lower grade ore
from the Maoula open pit.
-
Recovery rates increased slightly due to changes in the ore
blend.
- AISC decreased from $1,734/oz in
Q3-2023 to $1,482/oz in Q4-2023 due to higher volumes of gold sold
associated with the continued ramp-up of the Wona underground mine.
The Q4-2023 AISC increased from preliminary AISC of $1,301/oz
published on 22 January 2024 due to a reclassification of lateral
underground waste development from non-sustaining capital into
operating expense, partly offset by a reclassification of
underground contractor mobilisation costs from sustaining capital
to non-sustaining capital.
- Sustaining capital
expenditure increased from $4.2 million in Q3-2023 to
$10.3 million in Q4-2023 and primarily related to
infrastructure improvements.
-
Non-sustaining capital expenditure decreased from
$11.6 million in Q3-2023 to $8.8 million in Q4-2023 and
primarily related to underground development, underground
infrastructure and the stage 5 TSF embankment raise.
FY-2023 vs FY-2022 Insights
-
FY-2023 production totalled 142koz which, as previously disclosed,
was below the guided 190-210koz range and FY-2023 AISC amounted to
approximately $1,427/oz, which as previously disclosed, was above
the guided $950-$1,050/oz guided range, due to a slower than
expected ramp up by a new underground mining contractor at the Wona
underground deposit resulting in lower than expected ore tonnes
mined and consequently processed grades and throughput.
-
Production decreased from 195koz in FY-2022 to 142koz in FY-2023
largely due to lower grades milled as lower grade ore sourced from
the Maoula open pit supplemented the mill feed and due to lower
underground grades as the Wona underground deposit continues to
ramp up, partially offset by higher underground mined tonnes. AISC
increased from $994/oz in FY-2022 to $1,427/oz in FY-2023 due to
lower volumes of gold sold, higher open pit strip ratio, higher
underground mining unit costs and higher fuel and consumable
costs.
2024 Outlook
-
Mana is expected to produce within the 150 - 170koz range at an
AISC above the guided $1,200 - $1,300/oz range.
-
Production is expected primarily from the Siou and Wona underground
mines, with open pit activities tailing off during Q1-2024. A
further step-up in stoping is expected at Wona, which will be the
primary contributor in 2024, with production weighted toward
H2-2024. Throughput is expected to be higher than FY-2023 due to
the availability of ore from Siou and Wona. AISC is expected to
decrease in FY-2024 due to guided increase in production and gold
sales. As previously disclosed, on 28 February 2024, and detailed
above in the Operating Summary section, a contractor colleague
passed away on 27 February 2024 at the Mana mine. The underground
mining contractor ceased its mining operations in the Wona
underground mine while the investigation was undertaken, and they
resumed operations within two days. The stoppage is not expected to
impact Q1-2024 performance or FY-2024 performance as processing
activities were not impacted.
-
Sustaining capital expenditure outlook for FY-2024 is
$15.0 million, which relates primarily to underground
development activities at Wona.
- Non-Sustaining
capital expenditure outlook for FY-2024 is expected to be $45.0
million, a decrease from $53.6 million incurred in FY-2023.
Non-sustaining spend in FY-2024 primarily consists of continued
underground development at Wona as the mine reaches its stoping
rate and TSF construction.
Sabodala-Massawa Gold Mine,
Senegal
Table 14: Sabodala-Massawa Performance
Indicators
For The Period Ended |
Q4-2023 |
Q3-2023 |
Q4-2022 |
|
FY-2023 |
FY-2022 |
Tonnes ore mined, kt |
1,884 |
1,745 |
1,727 |
|
6,205 |
6,449 |
Total tonnes
mined, kt |
11,319 |
11,989 |
12,645 |
|
45,943 |
49,259 |
Strip ratio
(incl. waste cap) |
5.01 |
5.87 |
6.32 |
|
6.40 |
6.64 |
Tonnes milled,
kt |
1,255 |
1,175 |
1,154 |
|
4,755 |
4,289 |
Grade, g/t |
2.31 |
2.06 |
3.16 |
|
2.15 |
2.88 |
Recovery rate,
% |
89 |
91 |
88 |
|
89 |
89 |
Production, koz |
85 |
69 |
103 |
|
294 |
358 |
Total cash cost/oz |
686 |
758 |
559 |
|
688 |
577 |
AISC/oz |
700 |
840 |
661 |
|
767 |
691 |
Q4-2023 vs Q3-2023 Insights
-
Production increased from 69koz in Q3-2023 to 85koz in Q4-2023 due
to an increase in processed grades and throughput, which was
partially offset by a slight decrease in recovery rates.
-
Total tonnes mined decreased due to a decrease in mining activities
at the Bambaraya pits in-line with the mine plan, and lower waste
stripping at the Sabodala pit following stripping activities
earlier in the year. The decrease was partially offset by increased
stripping activities at the Massawa Central Zone pits to access
higher-grade refractory ore zones ahead of the expected start-up of
the BIOX® Expansion project in Q2-2024, and higher mining volumes
from the Niakafiri East and Sofia North Extension pits. Tonnes of
ore mined increased as stripping activities earlier in the year
provided greater access to ore zones at the Sabodala pit.
- Tonnes milled increased as the ore
blend contained a higher proportion of softer oxide ore from the
Niakafiri East pit and stockpiles.
-
Average processed grades increased due to higher grade ore sourced
from the Sabodala, Massawa Central Zone and Sofia North Extension
pits, displacing the comparatively lower grade ore from the
Bambaraya pits
-
Recovery rates decreased slightly due to an increased proportion of
transitional ore from the Massawa Central Zone pits in the mill
feed impacting recoveries.
-
AISC decreased from $840/oz in Q3-2023 to $700/oz in Q4-2023 due to
increased gold sales driven by higher average grades and
throughput, in addition to lower sustaining capital incurred during
the period.
-
Sustaining capital expenditure decreased from $5.5 million in
Q3-2023 to $1.3 million in Q4-2023 and primarily related to
waste capitalisation at the Niakafiri East pit and mining equipment
rebuilds.
-
Non-sustaining capital expenditure decreased from
$10.9 million in Q3-2023 to $8.3 million in Q4-2023 and
primarily related to ongoing development activities in the Massawa
area, Samina grade control activities, purchase of mining equipment
and early phase solar power plant construction costs.
FY-2023 vs FY-2022 Insights
-
FY-2023 production totalled 294koz, which was below the 315-340koz
guidance range due to lower production than expected in Q4-2023.
This was due to lower than anticipated tonnage of high-grade ore
extracted from the Sabodala pit as mining rates decreased with the
deeper elevations in the pit ahead of its final phase of mining and
lower grade ore mined from the Massawa Central zone. FY-2023 AISC
amounted to $767/oz, near the lower end of the $760-$810/oz guided
range, due to lower than planned sustaining capital incurred in the
year.
-
Production decreased from 358koz in FY-2022 to 294koz in FY-2023
due to lower average grades milled, partially offset by increased
throughput due to an increased proportion of oxide ore in the mill
feed. AISC increased from $691/oz in FY-2022 to $767/oz in FY-2023
due largely to lower volumes of gold sold and higher mining unit
costs due to increased fuel and consumable costs, partially offset
by lower processing unit costs.
2024 Outlook
-
Sabodala-Massawa is expected to produce between 360 - 400koz in
FY-2024 at a post BIOX® Expansion commercial production AISC of
$750 - $850/oz.
- Ore for the existing CIL plant is
expected to be primarily sourced from the Sabodala, Sofia North
Extension and Niakafiri East pits, with supplementary ore expected
to be sourced from the Kiesta pit in H2-2024. Throughput in the CIL
plant is expected to decrease slightly compared to the prior year
due to a higher proportion of fresh ore from the Sabodala and Sofia
North Extension pits expected in the mill feed. Average processed
grades in the CIL plant are expected to decrease slightly compared
to the prior year, in-line with mine sequencing, with an increased
proportion of the mill feed sourced from the lower grade Niakafiri
East pit and stockpiles. Recovery rates in the CIL plant are
expected to be largely consistent with the prior year.
-
Refractory ore for the BIOX® plant is expected to be primarily
sourced from the Massawa Central and Massawa North Zone pits.
Refractory ore mined in H1-2024 is expected to be stockpiled ahead
of the startup of the BIOX® Expansion project, expected in early
May, and will result in H2-2024 weighted production for
Sabodala-Massawa.
-
Sustaining capital expenditure is expected to increase from
$23.8 million in FY-2023 to $35.0 million in FY-2024 and
is primarily related to capitalised waste stripping as well as
mining fleet upgrades and re-builds and process plant
upgrades.
-
Non-sustaining capital expenditure is expected to decrease from
$46.2 million in FY-2023 to $40.0 million in FY-2024 and
is primarily related to infrastructure for the deposition of
tailings in the Sabodala pit which is expected to commence in
FY-2025, advanced grade control activities at Kiesta, the TSF 1
embankment raise, purchases of new mining equipment, mine
infrastructure and haul roads for the Kiesta mining area.
-
As announced on 2 August 2023, in order to significantly reduce
fuel consumption and greenhouse gas emissions, and lower power
costs at Sabodala-Massawa, the construction of a 37MWp photovoltaic
(“PV”) solar facility and a 16MW battery system at the
Sabodala-Massawa mine, is expected to amount to non-sustaining
capital of $45.0 million for FY-2024. The initial capital cost for
the solar project is expected to amount to $55.0 million, of which
$5.5 million was incurred in FY-2023 mainly related to detailed
engineering and design. and down payments for the procurement of
long-lead items. The solar plant construction is expected to be
completed by Q1-2025.
-
Growth capital expenditure is expected to be approximately
$75.0 million and is related to the BIOX® Expansion project as
detailed below.
Plant Expansion
-
Construction of the Sabodala-Massawa expansion project was launched
in April 2022 and remains on budget and on schedule with wet
commissioning underway and first gold expected in early May.
-
Growth capital expenditure for the expansion project is $290.0
million of which approximately $259.8 million or 90% of the total
growth capital has now been committed, with pricing in line with
expectations. $218.3 million, or 75%, of the growth capex incurred
as at the end of FY-2023, of which $186.4 million was incurred in
FY-2023 and $75.0 million is expected to be incurred in
FY-2024 .
-
The progress regarding the critical path items is detailed below:
-
The crushing, grinding and flotation circuits has been completed
and successfully wet commissioned during February with crushing,
grinding and flotation of ore now underway.
-
BIOX® reactors have been completed and the first two of six 1,220m3
reactors has been filled with inoculum, with flotation concentrate
from the Massawa ore now being fed through the BIOX® circuit.
-
Construction of the neutralisation and CCD areas were completed in
February.
-
The 18MW power plant expansion was completed and handed over to the
operating team during the quarter.
-
TSF construction is largely complete with final lining activities
ramping-down.
- Final electrical,
piping, and cable pulling is on-going on all work fronts.
Lafigué Project, Côte
d’Ivoire
Project Update
-
Construction of the Lafigué project in Côte d'Ivoire was launched
in early Q4-2022, following the completion of a DFS which confirmed
Lafigué’s potential to be a cornerstone asset for Endeavour. First
gold production is expected ahead of schedule in Q2-2024, rather
than Q3-2024.
-
Growth capital expenditure for the project is approximately $448.0
million, of which approximately $410.9 million or 92% has now been
committed to date, with pricing in line with expectations. $320.6
million, or 72%, of the growth capex incurred to date, of which
$242.1 million was incurred in FY-2023 and approximately $170.0
million is expected to be incurred in FY-2024 mainly related to
construction activities at the process plant, site infrastructure
and commissioning activities.
-
The construction progress regarding critical path items is detailed
below:
-
Construction activities are well advanced with the crushing area,
milling, CIL, and elution circuits completed.
-
Delivery of all the project shipments is over 99% complete with all
key items on site.
-
The 225kV power substation is complete with the Dabakala Switchyard
and overhead power lines successfully energised during December
2023.
-
HDPE lining of the tailings storage facility is completed.
-
Mining equipment mobilisation has advanced and mining activities
commenced during Q4-2023, with approximately 2,906 kt of material
moved during Q4-2023 and 8,250 kt of material moved to date.
-
Ancillary infrastructure including admin buildings, accommodation
and offices are now largely complete.
2024 Outlook
-
First gold production at Lafigué is expected ahead of schedule in
Q2-2024. Lafigué is expected to produce between 90-110koz in
FY-2024 at a post commercial production AISC of $900-975/oz, which
is in line with the Definitive Feasibility Study ("DFS")
assumptions.
-
Mining activities are expected in the western and eastern flanks of
the Lafigué pit, as well as the West pit. Total mined tonnes are
expected to ramp-up through the year as the fleet is progressively
mobilised. Ramp-up of the processing plant is expected to be
completed in H2-2024 and average processed grades are expected to
increase through the ramp-up period as mining advances into the
Lafigué pit through the year. Recovery rates are expected to be
above 90%, while processing costs are expected to decrease through
the ramp-up period.
-
As per the DFS, sustaining capital expenditure is expected to
amount to $25.0 million in FY-2024 and is primarily related to
capitalised waste stripping activities, advanced grade control
drilling and spare parts purchases.
-
As per the DFS, non-sustaining capital expenditure is expected to
amount to $5.0 million in FY-2024 and is primarily related to the
commencement of a TSF lift in H2-2024, once there is sufficient
waste rock available from mining operations, and waste stripping
activity in the eastern flank of the Lafigué pit.
Tanda-Iguela Project, Côte d’Ivoire
Project Update
-
A Preliminary Feasibility Study (“PFS”) was launched in Q4-2023,
based on the November 2023 resource update, which is expected to be
finalised in late 2024.
- Long lead items
within the PFS have been started, including metallurgical sampling,
geotechnical, hydrogeological and sterilisation drilling as well as
environmental permitting.
- Metallurgical
sampling and testing is underway to follow up on the preliminary
phase of testwork, which demonstrated that Assafou was amenable to
conventional CIL processing with the potential for high gravity
recoverable gold and overall recoveries above 94%.
- Geotechnical and
hydrogeological drilling are underway across the Assafou
deposit.
- Sterilisation
drilling is underway to the northeast of the Assafou deposit to
identify and sterilise the probable location for mine and
processing infrastructure.
- The environmental
permitting process has been launched with study work underway that
will form the basis of the environmental reporting.
-
For FY-2024 a $15.0 million exploration programme is planned at
Tanda-Iguela, focused on converting resources to reserves,
continuing to expand the existing Assafou resources and adding new
resources at Assafou and at the prospective surrounding targets
within the Tanda-Iguela permits, within 5 kilometres of the Assafou
deposit. Further details on the ongoing exploration programme can
be found in the Exploration section below.
EXPLORATION ACTIVITIES
-
Endeavour’s FY-2023 exploration programme comprised
$100.9 million of spend, with over 395,000 metres of drilling
completed, of which $22.6 million was spent in Q4-2023,
including over 33,000 metres of drilling.
-
During the year, exploration activities were mainly focussed on
identifying near mine opportunities to delineate new reserves and
resources over the coming years and expanding resources at the
Tanda-Iguela property in Côte d'Ivoire, which now hosts an
Indicated resource of 4.5Moz at 1.97 g/t Au, up 303% over the
maiden Indicated resource declared in Q4-2022.
-
Endeavour remains on track to achieve its 5-year exploration target
to discover 12 - 17Moz of Indicated resources over the 2021 to 2025
period, at the low discovery cost of less than $25 per ounce.
Table 15: Q4-2023 and FY-2023 Exploration
Expenditure and FY-2024 Guidance1
|
Q4-2023 ACTUAL |
FY-2023 ACTUAL |
FY-2024 GUIDANCE |
All amounts in
US$ million |
Houndé mine |
1.4 |
8.0 |
7.0 |
Ity mine |
1.8 |
16.0 |
10.0 |
Mana mine |
0.8 |
7.1 |
2.0 |
Sabodala-Massawa
mine |
4.0 |
19.3 |
21.0 |
Lafigué
project |
0.6 |
1.7 |
4.0 |
Tanda-Iguela
Project |
5.1 |
36.6 |
15.0 |
Greenfields |
8.9 |
12.2 |
6.0 |
TOTAL EXPLORATION EXPENDITURE |
22.6 |
100.9 |
65.0 |
1Exploration expenditures include expensed, sustaining, and
non-sustaining exploration expenditures.
Houndé mine
-
An exploration programme of $8.0 million was undertaken in
FY-2023 with $1.4 million spent in Q4-2023 consisting of
27,723 metres of drilling across 155 drill holes. The exploration
programme was focused on identifying additional resources below the
Kari West deposit, evaluating the underground potential of the
Vindaloo deposit and testing new near-mine targets including the
Kari Bridge target.
-
During Q4-2023, drilling continued to follow the continuity of
mineralisation at depth below the Vindaloo deposit where thick
mineralised lenses have been identified with the potential to
delineate a high-grade underground resource. Following drilling
earlier in the year, resource modelling of the Kari Bridge target,
in between Kari Pump and Kari West, continued to determine the
economics of mineralisation identified at this new target.
-
An exploration programme of $7.0 million is planned for
FY-2024, focused on delineating targets at depth within the Kari
Area and at the Vindaloo Deeps target, as well as adding resources
at the existing deposits.
Ity mine
-
An exploration programme of $16.0 million was undertaken in
FY-2023, of which $1.8 million was spent in Q4-2023 consisting
of 84,474 metres of drilling across 893 drill holes. The
exploration programme focused on adding near-mine resources within
the Grand Ity complex, in addition to reconnaissance and
delineation drilling on several potential satellite targets.
-
During Q4-2023, drilling focused on the northwest side of the
Bakatouo deposit confirming the continuity of mineralisation up and
down-dip. At the Mont-Ity deposit drilling identified down-dip
extensions of mineralisation within skarns on the margins of the
granodiorite intrusion that is beneath the current pitshell. At the
Bakatouo Northeast target, drilling followed the continuity of
mineralisation from the Bakatouo pit towards the other side of the
Cavally river.
-
An exploration programme of $10.0 million is planned for
FY-2024 and will focus on extending near-mine resources around
Grand Ity in order to test the continuity of mineralisation at
depth and in between the Walter, Bakatouo, Zia and Ity pits.
Drilling will also focus on extending the West Flotouo and Flotouo
Extensions deposits at depth. Reconnaissance and delineation work
is expected to continue at several targets on the Ity belt,
including the Gbampleu and Goleu targets.
Mana mine
-
An exploration programme of $7.1 million was undertaken in FY-2023,
of which $0.8 million was spent in Q4-2023 consisting of
20,728 metres of drilling across 378 drill holes. The exploration
programme focused on testing high grade targets within the Wona
underground deposit, expanding resources at the Maoula deposit and
delineating new targets at the Nyafe target, as well as delineating
regional open-pit targets within a 20 kilometre radius of the Mana
processing plant.
- During Q4-2023, drilling at Nyafé
South focused on evaluating the 500 metre long mineralised trend
showing encouraging results. At the Momina target, follow-up
drilling was completed on several high grade mineralised intercepts
hosted within a sequence of altered and veined mafic rocks over a
250 metre long mineralised trend. Drilling successfully identified
a continuation of mineralisation, which remains open along strike
and at depth.
-
An exploration programme of $2.0 million is planned for
FY-2024, focused on following up on near-mine oxide mineralisation
at the Kanan and Siou Nord targets, while additional target
generation continues incorporating a combination of field mapping
and historic data.
Sabodala-Massawa mine
-
An exploration programme of $19.3 million was undertaken in
FY-2023, of which $4.0 million was spent in Q4-2023 consisting
of 83,960 metres of drilling across 3,655 drill holes. The
exploration programme focused on expanding near-mine resources at
the Niakafiri, Kerekounda Underground and Kiesta deposits, as well
as testing several near mine satellite targets along the Main
Transcurrent Shear Zone.
-
During Q4-2023, drilling focused on expanding near-mine resources
at the Niakafiri West deposit delineating high-grade veins to the
north. Infill drilling was undertaken at the Kerekounda East
deposit to focus on resource conversion. At the Massawa North Zone
deposit drilling focused on delineating high-grade mineralisation
at depth, below the current pitshell to assess the underground
mining prospectivity. Early-stage drilling was conducted at the
Niakafiri Bridge target, in between the Niakafiri East and West
deposits, and at the Fatima target.
-
An exploration programme of $21.0 million is planned for
FY-2024, focused on expanding near-mine oxide and refractory
resources across the Niakafiri, Sabodala, Kerekounda-Golouma and
Massawa deposits, while testing new targets at the Kanoumba complex
located south of the Massawa permit. Reconnaissance drilling will
also be conducted across the recently acquired Madina and Miamaya
permits located east of the Niakafiri-Sabodala complex.
Lafigué mine
-
An exploration programme of $1.7 million was undertaken in
FY-2023, of which $0.6 million was spent in Q4-2023, focused
on advanced grade control drilling as well as some early stage
reconnaissance exploration at several near-mine satellite
opportunities.
-
During Q4-2023 the exploration programme largely focused on the
evaluation of the early stage WA05 and the Central Area target,
where 450 metres of trenching demonstrated continuous gold
mineralisation that will be followed up with drilling in 2024.
-
An exploration programme of $4.0 million is planned for
FY-2024 to follow up on the WA05 and Central Area targets located
within 5 kilometres of the Lafigué deposit and to investigate
future underground potential by testing mineralisation below the
current pitshell.
Tanda-Iguela Project
-
An exploration programme of $36.6 million was undertaken in
FY-2023, of which $5.1 million was spent in Q4-2023, consisting of
167,436 metres of drilling across 709 drill holes. The exploration
programme was focused on extending mineralisation and delineating
resources at the Assafou deposit and identifying potential
satellite deposits within 5 kilometres of the Assafou deposit.
-
During Q4-2023, exploration activities largely focused on
finalising the 2023 drilling programme at the Assafou deposit
targeting the conversion of Inferred resources to Indicated status,
extension of the mineralised system at the Assafou deposit, and on
delineating potential satellite targets within 5 kilometres of the
Assafou deposit.
-
As published on 29 November 2023, resources at the Assafou deposit
were significantly increased during the year, confirming
Tanda-Iguela’s status as the most significant gold discovery made
in West Africa in the last decade. The Indicated resource now
stands at 4.5Moz at 1.97 g/t Au, a 303% increase compared to the
2022 maiden Indicated resource of 1.1Moz at 2.33 g/t Au. The
updated November 2023 resource is based on 183,000 metres of
drilling and the Assafou deposit now spans 3.3 kilometres in length
and remains open along strike and at depth. Additional drilling on
identified targets has intersected mineralisation towards the
northeast and the southwest, indicating that Assafou is hosted
along a +20 kilometre mineralised strike length.
-
An exploration programme of $15.0 million is planned for FY-2024,
with at least 60,000 metres of drilling planned at Tanda-Iguela, of
which 25,000 metres will focus on delineating further resources at
Assafou and converting resources into reserves, while 35,000 metres
will focus on delineating potential satellite deposits within 5
kilometres of the Assafou deposit.
Greenfield
Exploration
-
A greenfield exploration programme of $12.2 million (higher than
the preliminary $6.0 million that was previously published due to
the reallocation of corporate permit related costs to greenfields)
was undertaken in FY-2023, of which $8.9 million was spent in
Q4-2023 focussed on identifying early stage opportunities across
the Birimian greenstone belts within West Africa and strengthening
the Company’s project pipeline .
-
In Guinea, activities focused on preliminary analysis and site
visits to prospective targets along the Sabodala-Massawa Shear
Zone, where it continues to the south into Guinea.
-
In Senegal, activities focused on identification of prospective
tenures along the Main Transcurrent Zone, following the structural
trend away from Sabodala-Massawa.
-
In Cote d’Ivoire, a review of prospective greenfield opportunities
was undertaken identifying several high priority permits.
-
In Mali, limited exploration activity was completed at the Kalana
project during the year, while work is still ongoing to support the
technical study that is underway
-
An exploration programme of $6.0 million is planned for FY-2024
focussed on advancing greenfield opportunities in Guinea, Senegal
and Cote d’Ivoire.
GROUP RESERVES AND
RESOURCES
-
Proven and Probable (“P&P”) reserves from continuing operations
amounted to 13.9Moz at year-end 2023, a decrease of 1.3Moz or 9%
compared to the previous year as exploration work prioritised the
delineation of new resources and the upgrade of existing resources
at the Tanda-Iguela discovery. Reserves decreased at the
Sabodala-Massawa, Ity and Houndé mines due to depletion, as Ity and
Houndé delivered record production, and due to model updates that
incorporated higher long-term operating cost assumptions. The
decreases were partially offset by an increase at Mana due to
reserve additions in the Wona underground deposit that exceeded
depletion during the year.
-
Measured and Indicated (“M&I”) resources from continuing
operations amounted to 26.7Moz at year-end 2023, an increase of
1.4Moz or 6% compared to the previous year largely due to a 3.38Moz
increase in Indicated resources at the Tanda-Iguela project in Cote
d’Ivoire, which was the Groups exploration priority during the
year. This was partially offset by decreases in M&I resources
at Houndé, Ity and Sabodala-Massawa due to depletion and resource
model updates incorporating higher operating cost assumptions,
while maintaining conservative gold price assumptions at
$1,500/oz.
Table 16: Reserve and Resource Evolution
from continuing operations1
In Moz on a 100% basis |
31 Dec 20232 |
31 Dec 20223 |
Δ 2023 vs 2022 |
P&P Reserves |
13.9 |
15.2 |
(1.3) |
(9)% |
M&I Resources
(inclusive of Reserves) |
26.7 |
25.3 |
+1.4 |
+6% |
Inferred Resources |
5.4 |
7.9 |
(2.5) |
(32)% |
1Excludes reserves and resources from the Boungou and Wahgnion
mines, which were divested on 30 June 2023 and the Karma mine,
which was divested on 10 March 2022. 2Notes available in Appendix A
for the 2023 mineral reserves and resources. 3For 2022 reserves and
resource notes, please read the press release dated 9 March 2023
available on the Company’s website.
-
Mine reserve and resource estimates were updated to factor in mine
depletion, exploration success, and updated unit costs, recovery
rate, geological and geotechnical assumptions, while maintaining
conservative gold price assumptions, as summarised in the below
table.
Table 17: Reserve and Resource Gold
Prices for Mines
Au price $/oz |
HOUNDÉ |
ITY |
LAFIGUÉ |
MANA |
SABODALA-MASSAWA |
TANDA-IGUELA (ASSAFOU) |
2023 Reserves |
1,300 |
1,300 |
1,300 |
1,300 |
1,300 |
— |
2022 Reserves |
1,300 |
1,300 |
1,300 |
1,300 |
1,300 |
— |
|
|
|
|
|
|
|
2023
Resources |
1,500 |
1,500 |
1,500 |
1,500 |
1,500 |
1,500 |
2022 Resources |
1,500 / 1,8001 |
1,500 |
1,500 |
1,500 |
1,500 |
1,500 |
1Resources at the Golden Hill deposit were calculated at
$1,800/oz
-
Detailed year-over-year reserve and resource variances are
available in Appendix A, with further insights below:
-
For Houndé, P&P reserves decreased from 54.0Mt at 1.57 g/t
containing 2.73Moz to 52.1Mt at 1.57 g/t containing 2.63Moz mainly
due to mining depletion, which was partially offset by the addition
of reserves at the Kari Pump pit and a maiden reserve at the
Vindaloo Southeast deposit. M&I resources decreased from 93.4Mt
at 1.56 g/t containing 4.68Moz to 73.1Mt at 1.63 g/t containing
3.82Moz mainly due to depletion and model updates incorporating
higher cost assumptions and lower recoveries at the Mambo and
Golden Hill deposits following the completion of additional
metallurgical testing.
-
For Ity, P&P reserves decreased from 57.9Mt at 1.62 g/t
containing 3.02Moz to 47.2Mt at 1.55 g/t containing 2.35Moz due to
depletion as well as model and cost assumption changes across the
Le Plaque and Daapleau pits to reflect more conservative cost and
recovery assumptions, partially offset by additions at the Ity and
Walter pits due to improved grade reconciliation. M&I resources
decreased from 97.0Mt at 1.59 g/t containing 4.97Moz to 89.5Mt at
1.57 g/t containing 4.52Moz due to depletion and an optimised model
of the Le Plaque pit incorporating updated cost assumptions.
-
For Mana, P&P reserves increased from 8.3Mt at 3.20 g/t
containing 0.85Moz to 9.7Mt at 2.9 g/t containing 0.91Moz, mainly
due to the incorporation of additional drilling data into updated
stope models in the Wona underground deposit, which was partially
offset by mine depletion. M&I resources increased from 33.9Mt
at 2.00 g/t containing 2.18Moz to 35.9Mt at 2.0 g/t containing
2.34Moz due to resource additions in the Wona underground deposit
and optimisation of the underground mine model, partially offset by
mining depletion.
-
For Sabodala-Massawa, P&P reserves decreased from 62.8Mt at
2.02 g/t containing 4.09Moz to 53.1Mt at 2.05 g/t containing
3.49Moz due largely to depletion as well as model updates across
the Niakafiri East and Massawa Central Zone deposits to reflect
updated cost assumptions and lower recovery assumptions resulting
from the extensive grade control programme completed at
Sabodala-Massawa. The decrease was partially offset by the
conversion of resources into maiden reserves at the Kiesta deposit.
M&I resources decreased from 106.1Mt at 1.86 g/t containing
6.33Moz to 88.2Mt at 1.92 g/t containing 5.44Moz due to depletion
and model updates incorporating updated cost assumptions at the
Sofia, Niakafiri, Massawa Central Zone and North Zone pits, as well
as the removal of smaller underground resources that are not
expected to be mined based on current assumptions.
-
For Lafigué, P&P reserves were flat at 49.8Mt at 1.69 g/t
containing 2.71Moz and M&I resources were flat at 46.2Mt at
2.04 g/t containing 3.03Moz as production is expected to start in
Q2-2024 and drilling activities through the year focused on
advanced grade control and preliminary evaluation of satellite
targets.
-
For Tanda-Iguela (Assafou), M&I resources increased from 14.9Mt
at 2.33 g/t containing 1.11Moz to 70.9Mt at 1.97 g/t containing
4.49Moz as an extensive 2023 drill programme resulted in a 303%
increase over the maiden Indicated resource estimate published in
late 2022, as detailed in the press release dated 29 November 2023,
that is available here.
CONFERENCE CALL AND LIVE WEBCAST
Management will host a conference call and
webcast on Wednesday 27 March, at 9:30 am EDT / 1:30 pm GMT to
discuss the Company's financial results.
The conference call and webcast are scheduled
at:6:30am in Vancouver9:30am in Toronto and New York1:30pm in
London9:30pm in Hong Kong and Perth
The webcast can be accessed through the
following link: https://edge.media-server.com/mmc/p/5sfuz85u
Click here to add a Webcast reminder to your Outlook
Calendar.
Analysts and investors are also invited to
participate and ask questions by registering for the conference
call dial-in via the following
link:https://register.vevent.com/register/BId71a00d64eb241e89e189a879baa5331
The conference call and webcast will be
available for playback on Endeavour's website.
QUALIFIED PERSONS
Mark Morcombe, COO of Endeavour Mining PLC., a
Fellow of the Australasian Institute of Mining and Metallurgy, is a
"Qualified Person" as defined by National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101") and has
reviewed and approved the technical information in this news
release.
CONTACT INFORMATION
For Investor
Relations enquiries: |
For Media
enquiries: |
Jack
Garman |
Brunswick
Group LLP in London |
Vice President of
Investor Relations |
Carole Cable,
Partner |
442030112723 |
442074045959 |
investor@endeavourmining.com |
ccable@brunswickgroup.com |
ABOUT ENDEAVOUR MINING PLC
Endeavour Mining is one of the world’s senior
gold producers and the largest in West Africa, with operating
assets across Senegal, Côte d’Ivoire and Burkina Faso and a strong
portfolio of advanced development projects and exploration assets
in the highly prospective Birimian Greenstone Belt across West
Africa.
A member of the World Gold Council, Endeavour is
committed to the principles of responsible mining and delivering
sustainable value to its employees, stakeholders and the
communities where it operates. Endeavour is admitted to listing and
to trading on the London Stock Exchange and the Toronto Stock
Exchange, under the symbol EDV.
For more information, please visit
www.endeavourmining.com.
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATION
This document contains "forward-looking
statements" within the meaning of applicable securities laws. All
statements, other than statements of historical fact, are
“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, the success of exploration
activities, the anticipated timing for the payment of a shareholder
dividend and statements with respect to future dividends payable to
the Company’s shareholders, the expected timing for completion of
technical studies, the potential for Tanda-Iguela to be a Tier 1
deposit, mine life and any potential extensions, the future price
of gold and the share buyback programme. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "expects", "expected",
"budgeted", "forecasts", "anticipates", believes”, “plan”,
“target”, “opportunities”, “objective”, “assume”, “intention”,
“goal”, “continue”, “estimate”, “potential”, “strategy”, “future”,
“aim”, “may”, “will”, “can”, “could”, “would” and similar
expressions .
Forward-looking statements, while based on
management's reasonable estimates, projections and assumptions at
the date the statements are made, 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 or completion of
divestitures; risks related to international operations; risks
related to general economic conditions and the impact of credit
availability on the timing of cash flows and the values of assets
and liabilities based on projected future cash flows; Endeavour’s
financial results, cash flows and future prospects being consistent
with Endeavour expectations in amounts sufficient to permit
sustained dividend payments; the completion of studies on the
timelines currently expected, and the results of those studies
being consistent with Endeavour’s current expectations; actual
results of current exploration activities; production and cost of
sales forecasts for Endeavour meeting expectations; 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; extreme weather events,
natural disasters, supply disruptions, power disruptions,
accidents, pit wall slides, 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 legislation,
regulation of mining operations, tax rules and regulations and
changes in the administration of laws, policies and practices in
the jurisdictions in which Endeavour operates; disputes,
litigation, regulatory proceedings and audits; adverse political
and economic developments in countries in which Endeavour operates,
including but not limited to acts of war, terrorism, sabotage,
civil disturbances, non-renewal of key licenses by government
authorities, or the expropriation or nationalisation of any of
Endeavour’s property; risks associated with illegal and artisanal
mining; environmental hazards; and risks associated with new
diseases, epidemics and pandemics.
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.
The declaration and payment of future dividends
and the amount of any such dividends will be subject to the
determination of the Board of Directors, in its sole and absolute
discretion, taking into account, among other things, economic
conditions, business performance, financial condition, growth
plans, expected capital requirements, compliance with the Company's
constating documents, all applicable laws, including the rules and
policies of any applicable stock exchange, as well as any
contractual restrictions on such dividends, including any
agreements entered into with lenders to the Company, and any other
factors that the Board of Directors deems appropriate at the
relevant time. There can be no assurance that any dividends will be
paid at the intended rate or at all in the future.
NON-GAAP MEASURES
Some of the indicators used by Endeavour in this
press release represent non-IFRS financial measures, including
“all-in margin”, “all-in sustaining cost”, “net cash / net debt”,
“EBITDA”, “adjusted EBITDA”, “net cash / net debt to adjusted
EBITDA ratio”, “cash flow from continuing operations”, “total cash
cost per ounce”, “sustaining and non-sustaining capital”, “net
earnings”, “adjusted net earnings”, “operating cash flow per
share”, and “return on capital employed”. These measures are
presented as they can provide useful information to assist
investors with their evaluation of the pro forma performance. Since
the non-IFRS performance measures listed herein do not have any
standardised definition prescribed by IFRS, they may not be
comparable to similar measures presented by other companies.
Accordingly, they are intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. Please
refer to the non-GAAP measures section in the Company’s most
recently filed Management Report for a reconciliation of the
non-IFRS financial measures used in this press release.
Corporate Office: 5 Young St, Kensington, London W8 5EH,
UK
- EDV_Q4 and FY-23 Results - MDA
- EDV_Q4 and FY-23 Results - Presentation
- EDV_Q4 and FY-23 Results - Mine Statistics
- EDV_Q4 and FY-23 Results - Reserves & Resources
- EDV_Q4 and FY-23 Results - NR
- EDV_Q4 and FY-23 Results - Financial Statements
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