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Endeavour significantly increases Free Cash Flow on record
production and lower AISC
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Format
2015 Full Year Highlights:
> Gold production up 11% to
517koz, exceeding production guidance of 475-500koz
> All-in Sustaining Cost down
9% to $922/oz, below guidance of $930-980/oz
> All-in sustaining margin up
4% to $122m, despite an 8% decline in realized gold price
> Free Cash Flow before tax,
working capital & financing costs more than doubled to $85m,
exceeding guidance of $80m[1]
> Free Cash Flow of $34m,
turning positive with increased production and lower AISC/oz
> Cash balance increased to
$110m and net debt reduced to $144m after debt repayment of $60m in
2015
> Adjusted net earnings
attributable to shareholders tripled to $42m, or $0.99 per
share
George Town,
March 3, 2016 - Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) is
pleased to announce its financial and operating results for the
fourth quarter and full year 2015, with highlights provided in the
table below.
Table
1: Key Operational and
Financial Highlights
All amuonts in US$ |
Three months ended December 31, |
|
Year ended December 31, |
2015 |
2014 |
Var |
|
2015 |
2014 |
Var |
Gold Production, oz |
136,844 |
119,729 |
14% |
|
516,646 |
465,770 |
+11% |
Realized
Gold Price, $/oz |
1,102 |
1,198 |
(8%) |
|
1,157 |
1,264 |
(8%) |
AISC ,
$/oz |
934 |
995 |
(6%) |
|
922 |
1,010 |
(9%) |
All-in
Sustaining Margin, $/oz |
168 |
203 |
(17%) |
|
235 |
254 |
(7%) |
All-in
Sustaining Margin, $m |
24 |
25 |
(7%) |
|
122 |
117 |
+4% |
Free Cash
Flow, $m (before WC, tax & financing costs) |
12 |
(4) |
n.a |
|
85 |
35 |
+143% |
Free Cash
Flow, $m |
25 |
7 |
257% |
|
34 |
(11) |
n.a |
Net Debt At
Period End, $m |
144 |
254 |
(43%) |
|
144 |
254 |
(43%) |
Adjusted
Net Earnings, $m (attributable to shareholders) |
(6) |
(2) |
(200%) |
|
42 |
14 |
+200% |
Adjusted
Earnings Per Share, $/share |
(0.12) |
(0.06) |
(100%) |
|
0.99 |
0.34 |
+191% |
Neil Woodyer, CEO of
Endeavour, stated: "The strong 2015 financial results are the
culmination of several years of asset development and optimization.
We are now ideally positioned as the major pure West-African
multi-operation gold mining company, with a demonstrated capacity
to generate significant cash flows even at lower gold prices, as
witnessed last year.
In addition, our
strengthened balance sheet and significant liquidity sources give
us the needed financial flexibility to continue our growth
strategy."
Production
increased by 11% to 516,646 ounces
- Endeavour produced a total of 516,646 ounces of
gold in 2015, inclusive of Ity's post-acquisition production of
5,689 ounces. Excluding the Ity mine, Endeavour's production
amounted to 510,957 ounces, exceeding the 2015 production guidance
of 475,000 to 500,000 ounces, as the strong performance from Agbaou
and Tabakoto more than offset the slight declines at Nzema and
Youga.
Table
2: Gold Production by mine,
oz
(on a 100% basis) |
2015 Guidance |
|
2015 Actual |
2014 Actual |
Var |
Agbaou |
150,000 - 155,000 |
|
181,365 |
146,757 |
+24% |
Tabakoto |
155,000 - 165,000 |
|
151,067 |
127,323 |
+19% |
Nzema |
110,000 - 115,000 |
|
110,302 |
115,129 |
(4%) |
Youga |
60,000 - 65,000 |
|
68,223 |
76,561 |
(11%) |
Subtotal |
475,000 -
500,000 |
|
510,957 |
465,770 |
+10% |
Ity |
|
|
5,689 |
- |
- |
Total |
|
|
516,646 |
465,770 |
+11% |
- Agbaou achieved record production in 2015, up 24%
over the previous year, mainly due to a 20% increase in mill
throughput and the continued benefit of mining free-dig oxide
ore
- Tabakoto increased production by 19% over the
previous year as the mine benefited from the start of mining of the
Kofi C open pit and the full ramp-up of the Segala underground
mine.
- Nzema's production declined only slightly
compared with the previous year as the mine strategically increased
purchased ore to improve the mine's operating margins, and to
preserve reserves in-situ.
- The Ity Mine is included for the post-acquisition
period of November 28 to December 31, 2015. During 2015, the Ity
Mine produced a total of 80,807 ounces.
- Subsequent to the year ended December 31, 2015,
on February 29, 2016, Endeavour announced that it had sold the
Youga Gold Mine in Burkina Faso for $25.3 million.
All-In Sustaining
Cost decreased by 9% to $922/oz
- Endeavour's Group All-in Sustaining Cost ("AISC")
decreased by 9% over the previous year to $922/oz mainly due to
lower operating costs, specifically at Agbaou and Tabakoto, as well
as the benefit of the decline in crude oil prices and favorable
exchange rates against the US$.
- Agbaou reduced its mine-level AISC by 7% over the
previous year to $576/oz, primarily due to a lower strip ratio and
a decrease in milling cost per tonne driven by larger volumes.
- Tabakoto reduced its mine-level AISC by 20% over
the previous year to $1,067/oz, as lower fuel prices and switching
to owner mining led to a decrease in mining costs (open pit reduced
from $4.6 to $2.6/t, and underground reduced from $51 to
$40/t).
- Sustaining capital increased from $31 million to
$48 million, up $27/oz, mainly due to increased underground
development at the Tabakoto mine and capitalized waste at
Agbaou.
- Corporate costs and sustaining exploration costs
remained fairly constant on a total dollar spent basis.
Table
3: Group All-In Sustaining
costs, $/oz
|
2015 Guidance |
|
2015 Actual |
2014 Actual |
Var |
Agbaou |
690 - 740 |
|
576 |
621 |
(7%) |
Tabakoto |
950 - 1,000 |
|
1,067 |
1,335 |
(20%) |
Nzema |
1,000 - 1,050 |
|
1,064 |
1,036 |
+3% |
Youga |
975 - 1,025 |
|
913 |
824 |
+11% |
Ity* |
|
|
683 |
- |
- |
Mine-level AISC/oz |
883 - 933 |
|
868 |
954 |
(9%) |
Corporate G&A |
37 |
|
41 |
47 |
(13%) |
Sustaining exploration |
10 |
|
13 |
9 |
44% |
Group AISC/oz |
930 - 980 |
|
922 |
1,010 |
(9%) |
*Ity Mine is included for the
post-acquisition period of November 28 to December 31, 2015.
Increased Cash
Flow generation despite lower realized gold price
- All-in sustaining margin increased by 4% to $122
million as the increased production and lower AISC/oz more than
compensated for the lower realized gold price.
- Free cash flow (before working capital, tax &
financing costs) increased by 143% to $85 million as non-sustaining
capital returned to normalized levels. In 2014, non-sustaining
capital included $46 million for Tabakoto (Kofi C open pit and
Segala underground development, Cement Rock Fill plant, and
equipment purchase). In 2015, the $37 million non-sustaining
capital consisted of $19 million for Tabakoto underground
development, $8 million in non-sustaining exploration, $7 million
at the Houndé project, $2 million for Ity, and $1 million at
Nzema.
- Free cash flow shifted from an outflow of $11
million to a positive $34 million generated in 2015, as a result of
reduced non-sustaining capital.
Table
4: Simplified Cash Flow
Statement
|
Year Ended December 31 |
Var |
In US$ million |
2015 |
2014 |
Gold Sales, oz |
519,812 |
467,887 |
+11% |
Realized gold price, $/oz |
1,157 |
1,264 |
(8%) |
Revenue |
601 |
584 |
+3% |
Cash cost for
ounces sold |
(374) |
(382) |
(2%) |
Royalties |
(29) |
(28) |
+4% |
Corporate
G&A |
(21) |
(22) |
(5%) |
Sustaining
capital |
(48) |
(31) |
+55% |
Sustaining exploration |
(7) |
(4) |
+75% |
AISC Margin |
122 |
117 |
+4% |
Non-sustaining exploration |
(9) |
(20) |
(55%) |
Non-sustaining capital |
(28) |
(62) |
(55%) |
Free cash flow (before working capital, tax
& financing costs) |
85 |
35 |
+143% |
Working capital |
6 |
21 |
(71%) |
Taxes paid |
(7) |
(12) |
(42%) |
Interest paid |
(16) |
(13) |
(23%) |
Other items* |
(34) |
(42) |
(24%) |
Free Cash Flow |
34 |
(11) |
n.a |
Cash received from La Mancha acquisition** |
73 |
- |
- |
Revolving credit facility payments |
(60) |
- |
- |
Year over year change in cash |
47 |
(11) |
n.a |
*Includes financial fees, lease
repayments, hedge settlements, realized loss on derivative
financial instruments, unrealized foreign exchange loss on cash,
and other non-operating cash adjustments. **Includes $63m of cash
received from La Mancha and minority cash interest in Ity operating
entity, net of transaction fees
Decreased Net
Debt by 43%, improving debt ratio to 0.9x
- Endeavour voluntarily repaid $60 million of its
drawn down debt against the revolving credit facility ("RCF")
during the year, reducing its net debt by 43% to $144 million.
- The net debt to operating EBITDA ratio has
improved to 0.9 times, a 50% decrease from the prior year's
position.
- Endeavour finished the year with a sound balance
sheet with strong liquidity sources including its cash position of
$110 million undrawn RCF capacity of $110 million, and its 2016
cash flow generation. The group also has a $75 million in-principle
commitment from La Mancha (Naguib Sawiris) to help finance its
growth strategy.
Table
5: Net Debt Reduction
In US$ million |
Year ended December 31 |
Var |
2015 |
2014 |
Cash |
110 |
62 |
+77% |
Less: Equipment finance lease |
13 |
16 |
(19%) |
Less: Drawn portion of $350 million RCF |
240 |
300 |
(20%) |
Net Debt |
144 |
254 |
(43%) |
Operating EBITDA |
164 |
143 |
+15% |
Net Debt to Operating EBITDA ratio |
0.9x |
1.8x |
(50%) |
Adjusted Net
Earnings per Share increased by 191%
- Earnings from mine operations were $107 million
in 2015 compared with $76 million for the previous year, further
illustrating Endeavour's improvement in both operating and cost
management areas.
- Net earnings attributable to shareholders were
$18 million, or $0.42 per share, compared with net losses of $274
million, or ($6.62) per share, in the same period in 2014. For the
year ended December 31, 2014 the company incurred an impairment
expense on mining interests and related assets of $366 million,
while no such expenses were incurred in the year ended December 31,
2015.
- Adjusted earnings attributable to shareholders
were $42 million, or $0.99 per share, in 2015, an increase of 191%
compared with $14 million, or $0.34 per share, in the previous
year.
Table
6: Net Earnings
($ in millions except per share
amounts) |
Year Ended December 31, |
2015 |
2014 |
Earnings from mine operations |
107 |
76 |
Net earnings (loss) and total comprehensive
earnings (loss) |
36 |
(328) |
Portion attributable to shareholders |
18 |
(274) |
Basic loss per share, US$/share |
0.42 |
(6.62) |
Adjusted net earnings (loss) attributable to
shareholders* |
42 |
14 |
Adjusted earnings per share, $/share |
0.99 |
0.34 |
*Mainly adjusted for impairment
charges, transaction fees, FX gain and losses. For more details,
see Company MD&A.
2016 Guidance -
Updated following the Youga Sale
- Subsequent to the Youga mine sale on February 29,
2016, Endeavour has updated its 2016 production guidance to 535,000
to 560,000 ounces at an AISC of $870 to $920/oz.
- At a gold price of $1,150/oz and using the
mid-point of 2016 production and AISC/oz guidance ranges, Endeavour
is projecting an AISC margin of approximately $140 million in 2016,
or $255/oz.
- In 2016, non-sustaining project capital is
expected to be $48 million, up from $37 million in 2015, with
details by mine provided in the Table 8 below.
- Free cash flow (before working capital movement,
tax and financing costs) is projected to be $90 million,
representing $175 per ounce, with approximately $30 million
sensitivity per $50 per ounce gold price movement.
- Exploration costs of $20 million have been
allocated towards programs focused on reserve replacement and mine
life extensions, with $6 million toward sustaining exploration
programs and $14 million toward non-sustaining exploration
programs.
Table
7: 2016 Production and
AISC/oz Guidance by mine
Production
Guidance1,
ounces |
|
AISC Guidance,
$/oz |
Agbaou |
165,000 |
- |
175,000 |
|
Agbaou |
650 |
- |
700 |
Tabakoto |
155,000 |
- |
175,000 |
|
Tabakoto |
920 |
- |
970 |
Nzema |
110,000 |
- |
130,000 |
|
Nzema |
970 |
- |
1,020 |
Ity |
65,000 |
- |
75,000 |
|
Ity |
800 |
- |
850 |
Youga
(pre-disposal²) |
7,000 |
- |
8,000 |
|
Youga
(pre-disposal²) |
980 |
- |
1,030 |
Total |
502,000 |
- |
563,000 |
|
Mine-level AISC/oz |
820 |
- |
870 |
Group Guidance Range |
535,000 |
- |
560,000 |
|
Corporate G&A |
38 |
|
|
|
|
|
Sustaining exploration |
11 |
|
|
|
|
|
Group All-In Sustaining costs |
870 |
- |
920 |
1Gold
production is on a 100% consolidated basis. Actual mine ownership
is Agbaou - 85%, Nzema - 90%, Tabakoto - 80%, Youga - 90%, Ity -
55%. ²Estimate for the pre-sale period ended February
29, 2016.
Table
8: 2016 Free Cash Flow before
Working Capital, Tax and Financing Costs
assuming a gold price of 1,150 $/oz 2016
|
$ million |
$/ounce |
Revenue (based on production
guidance range mid-point) |
630 |
1,150 |
AISC
costs (based on AISC guidance range mid-point) |
(492) |
895 |
All-in sustaining
margin |
138 |
255 |
Non-sustaining capital: |
(48) |
80 |
Agbaou secondary crusher: |
12 |
Nzema pit
wall push-back: |
12 |
Non-sustaining exploration: |
14 |
Houndé and
the Ity CIL projects: |
10 |
Free cash flow (before working capital
movement, tax and financing costs) |
90 |
175 |
Project and
Exploration Update
- The Houndé project construction decision is
scheduled for the second quarter of 2016
- The Ity CIL feasibility study is expected to be
completed in the third quarter of 2016
- A strategic review of our exploration portfolio
is underway to establish our long-term exploration strategy and to
prioritize targets
Conference call
and live webcast
Management will host a conference
call and live webcast on Friday, March 4, 2016, at
9:00 am Toronto time (EST), 2.00pm London time (GMT); 3.00pm Paris
time (CET), to discuss the Company's financial
results.
The live webcast
can be accessed through the following link:
http://edge.media-server.com/m/p/p944mzru
Analysts and
interested investors are also invited to participate and ask
questions using the dial-in numbers below:
International:
+1 212 444 0412
North American toll-free:
1 877 280 2342
UK toll-free:
0800 279 5004
Australian toll-free:
1
800 027 830
Confirmation code:
4692288
A replay of the conference call
and webcast will be available on Endeavour's website.
Contact Information
Vincent
Benoit
EVP - Strategy & Business
Development
+33 (0)1 70 38 36 96
vbenoit@endeavourmining.com
Martino De
Ciccio
VP - Strategy & Investor
Relations
+33 (0)1 70 38 36 95
mdeciccio@endeavourmining.com
Brunswick Group
LLP
Carole Cable, Partner
+44 7974 982 458
ccable@brunswickgroup.com
Qualified Persons
Adriaan "Attie"
Roux, Pr.Sci.Nat, Endeavour's Chief Operating Officer, is a
Qualified Person under NI 43-101, and has reviewed and approved the
technical information related to mining operations in this news
release.
About Endeavour Mining Corporation
Endeavour Mining is a TSX-listed
intermediate gold mining company which operates 4 West African
mines in Côte d'Ivoire, Mali, and Ghana. In 2016, it expects to
produce between 535,000 and 560,000 ounces at an all-in sustaining
cost of US$870 to US$920 per ounce, after adjustment of the recent
Youga sale. Endeavour Mining is focused on effectively managing its
existing assets to maximize cash flow as well as pursuing organic
and strategic growth opportunities that benefit from its management
and operational expertise.
Endeavour Mining | Executive Office | Bureau 76, 7 Boulevard
des Moulins, Monaco 98000
This news release contains
"forward-looking statements" including but not limited to,
statements with respect to Endeavour's plans and operating
performance, the estimation of mineral reserves and resources, the
timing and amount of estimated future production, costs of future
production, future capital expenditures, and the success of
exploration activities. Generally, these forward-looking statements
can be identified by the use of forward-looking terminology such as
"expects", "expected", "budgeted", "forecasts" and "anticipates".
Forward-looking statements, while based on management's best
estimates and assumptions, are subject to risks and uncertainties
that may cause actual results to be materially different from those
expressed or implied by such forward-looking statements, including
but not limited to: risks related to the successful integration of
acquisitions; risks related to international operations; risks
related to general economic conditions and credit availability,
actual results of current exploration activities, unanticipated
reclamation expenses; changes in project parameters as plans
continue to be refined; fluctuations in prices of metals including
gold; fluctuations in foreign currency exchange rates, increases in
market prices of mining consumables, possible variations in ore
reserves, grade or recovery rates; failure of plant, equipment or
processes to operate as anticipated; accidents, labour disputes,
title disputes, claims and limitations on insurance coverage and
other risks of the mining industry; delays in the completion of
development or construction activities, changes in national and
local government regulation of mining operations, tax rules and
regulations, and political and economic developments in countries
in which Endeavour operates. Although Endeavour has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Please refer to Endeavour's
most recent Annual Information Form filed under its profile at
www.sedar.com for further information respecting the risks
affecting Endeavour and its business. AISC, all-in sustaining costs
at the mine level, cash costs, operating EBITDA, all-in sustaining
margin, free cash flow, net free cash flow, free cash flow per
share, net debt, and adjusted earnings are non-GAAP financial
performance measures with no standard meaning under IFRS, further
discussed in the section Non-GAAP Measures in the most recently
filed Management Discussion and Analysis for the year ended
December 31, 2015.
Appendix 1: Production and Cost Details by
Mine
For the year
ended December 31, 2015 |
Unit |
Agbaou |
Nzema |
Tabakoto |
Youga |
Ity |
Total |
Mining Physicals |
|
|
|
|
|
|
|
Total
tonnes mined - Open pit |
000t |
20,447 |
8,144 |
9,333 |
8,026 |
368 |
0 |
Total ore
tonnes - Open pit |
000t |
2,818 |
1,310 |
520 |
1,335 |
63 |
0 |
Total ore
tonnes - Underground |
000t |
0 |
0 |
1,009 |
0 |
0 |
0 |
Total
tonnes milled |
000t |
2,665 |
1,783 |
1,588 |
1,064 |
102 |
0 |
Gold sold |
oz |
182,219 |
110,404 |
151,345 |
67,927 |
7,917 |
519,812 |
Unit cost analysis |
|
|
|
|
|
|
|
Mining
costs - Open pit |
$/t
mined |
2.63 |
4.73 |
2.59 |
3.86 |
2.38 |
|
Mining
costs - Underground |
$/t
ore |
- |
- |
40.02 |
- |
- |
|
Processing
and maintenance |
$/t
milled |
6.88 |
14.28 |
22.90 |
20.10 |
16.26 |
|
Site
G&A |
$/t
milled |
5.39 |
7.14 |
20.21 |
8.95 |
11.86 |
|
Cash cost details |
|
|
|
|
|
|
|
Mining
costs - Open pit |
$000s |
48,685 |
31,125 |
17,651 |
31,013 |
892 |
129,366 |
Mining
costs -Underground |
$000s |
0 |
0 |
40,366 |
0 |
0 |
40,366 |
Processing
and maintenance |
$000s |
18,330 |
25,454 |
36,357 |
21,388 |
1,653 |
103,182 |
Site
G&A |
$000s |
14,372 |
12,727 |
32,095 |
9,519 |
1,205 |
69,918 |
Purchased
ore at Nzema |
$000s |
|
29,447 |
|
|
|
29,447 |
Inventory
adjustments |
$000s |
2,785 |
594 |
1,572 |
(3,793) |
602 |
1,760 |
Cash costs
for ounces sold |
$000s |
84,172 |
99,347 |
128,041 |
58,127 |
4,352 |
374,039 |
Royalties |
$000s |
7,575 |
7,234 |
10,438 |
3,038 |
535 |
28,820 |
Sustaining
capital |
$000s |
13,191 |
10,839 |
23,048 |
854 |
519 |
48,451 |
Cash cost
per ounce sold |
$/oz |
462 |
900 |
846 |
856 |
550 |
720 |
Mine-level AISC per ounce sold |
$/oz |
576 |
1,064 |
1,067 |
913 |
683 |
868 |
For the year ended December 31,
2014 |
Unit |
Agbaou |
Nzema |
Tabakoto |
Youga |
Ity |
Total |
Mining Physicals |
|
|
|
|
|
|
|
Total
tonnes mined - Open pit |
000t |
19,560 |
8,769 |
7,046 |
4,993 |
|
|
Total ore
tonnes - Open pit |
000t |
2,741 |
1,366 |
638 |
1,161 |
|
|
Total ore
tonnes - Underground |
000t |
0 |
0 |
807 |
0 |
|
|
Total
tonnes milled |
000t |
2,241 |
1,587 |
1,485 |
991 |
|
|
Gold sold |
oz |
143,772 |
114,044 |
127,357 |
76,582 |
|
461,755 |
Unit cost analysis |
|
|
|
|
|
|
|
Mining
costs - Open pit |
$/t
mined |
2.61 |
4.56 |
4.55 |
4.98 |
|
|
Mining
costs - Underground |
$/t
ore |
- |
- |
50.77 |
- |
|
|
Processing
and maintenance |
$/t
milled |
7.66 |
17.90 |
30.11 |
24.24 |
|
|
Site
G&A |
$/t
milled |
3.84 |
7.87 |
17.62 |
10.88 |
|
|
Cash cost details |
|
|
|
|
|
|
|
Mining
costs - Open pit |
$000s |
46,395 |
34,821 |
32,035 |
24,887 |
|
138,138 |
Mining
costs -Underground |
$000s |
0 |
0 |
40,956 |
0 |
|
40,956 |
Processing
and maintenance |
$000s |
17,175 |
28,410 |
44,696 |
24,022 |
|
114,303 |
Site
G&A |
$000s |
8,601 |
12,491 |
26,164 |
10,783 |
|
58,039 |
Purchased
ore at Nzema |
$000s |
0 |
24,409 |
0 |
0 |
|
24,409 |
Inventory
adjustments |
$000s |
2,999 |
231 |
5,376 |
-2,882 |
|
5,725 |
Cash costs
for ounces sold |
$000s |
75,170 |
100,362 |
149,227 |
56,810 |
|
381,570 |
Royalties |
$000s |
6,399 |
8,014 |
9,665 |
4,229 |
|
28,307 |
Sustaining
capital |
$000s |
7,650 |
9,795 |
11,078 |
2,057 |
|
30,580 |
Cash cost
per ounce sold |
$/oz |
523 |
880 |
1,172 |
742 |
|
826 |
Mine-level AISC per ounce sold |
$/oz |
621 |
1,036 |
1,335 |
824 |
|
954 |
[1] Rebased
with realized gold price of $1,157/oz, using mid-point production
guidance
View News Release in PDF
Format
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Endeavour Mining Corporation via
Globenewswire
HUG#1991774
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