GEORGE TOWN, Jan. 14, 2016 /CNW/ - Endeavour Mining
Corporation ("Endeavour Mining") (TSX:EDV) (OTCQX:EDVMF) announces
2015 gold production of 517,948 ounces, which includes 5,689 ounces
from the newly acquired Ity Mine, to exceed the 2015 production
guidance range. The 2015 AISC/oz is expected to be slightly
below the $930 to $980 guidance
range.
At December 31, 2015 the cash
balance was $110 million and net debt
was reduced to $143 million.
For 2016, Endeavour Mining is providing gold production
guidance of 575,000 to 600,000 ounces and AISC/oz is expected to
decrease to $875 to $925.
2015 Production and AISC Highlights
- 2015 production exceeded guidance of 475,000 to 500,000 ounces
with 512,259 ounces from the Agbaou, Nzema, Tabakoto and Youga
mines.
- Endeavour Mining's five mines, which now includes the Ity Mine,
produced 593,066 ounces during 2015.
- The Ity Mine was acquired November 27,
2015 so the consolidated financial statements will only
include Ity's post-acquisition results of 5,689 ounces for total
gold production of 517,948 ounces during 2015, an increase of 11%
over 2014.
Table 1: 2015 Gold
Production and Guidance by Mine (in ounces, 100%
basis1)
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Mine
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2014
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Q4 2015
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2015
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2015
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Full
year
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3 months
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Full
year
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Guidance Range, by
Mine
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Agbaou
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146,757
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51,732
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181,365
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150,000
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-
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155,000
|
|
Nzema
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|
115,129
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23,076
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|
110,302
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110,000
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-
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115,000
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|
Tabakoto
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127,323
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42,665
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152,185
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155,000
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-
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165,000
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Youga
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76,561
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14,985
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68,407
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60,000
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-
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65,000
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Sub-Total
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465,770
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132,458
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512,259
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475,000
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-
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500,000
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Ity2
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5,689
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5,689
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Grand-Total
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465,770
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138,147
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517,948
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11% year-over-year
growth
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1 Gold production is on a 100% consolidated
basis. Actual mine ownership is Agbaou – 85%, Nzema – 90%,
Tabakoto – 80%, Youga – 90%, Ity – 55%
2 Ity Mine is included for the post-acquisition
period of November 28 to December 31,
2015. During 2015, the Ity Mine produced 80,807
ounces.
- The 2015 AISC/oz is expected to be slightly below the
$930 to $980 guidance range,
representing a cost improvement of at least 8% compared to
2014.
- At December 31, 2015, the net
debt position has been reduced by 44% to $143 million, which compares to $254 million at the start of the year.
- The net debt to Operating EBITDA ratio has improved to 0.7
times, which compares to 1.8 times at the start of the year.
- The December 31, 2015 balance
sheet includes $110 million of cash
and $240 million of debt drawn from
the $350 million revolving credit
facility ("RCF"). During 2015, the RCF drawings were reduced
by $60 million including $20 million in each of Q2, Q3 and Q4.
- Endeavour Mining has a sound balance sheet with strong
liquidity including its cash position of $110 million, undrawn RCF capacity of
$110 million, and its 2016 cash flow
generation which is projected at $100
million, as shown in Table 5. The group is also
supported by a $75 million
in-principle commitment from La Mancha (Naguib Sawiris) to finance its development and
growth projects.
Table 2 – Net Debt reduction during 2015 (US$
million)
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As of
December 31
2014
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As of
December 31
2015
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Estimates**
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Cash
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$62
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$110
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Less: Equipment
finance lease
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$16
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$13
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Less: Drawn portion
of $350 million RCF
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$300
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$240
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Net
debt
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$254
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$143
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Operating EBITDA*
(2014 MD&A)
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$143
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Consolidated
financial statements (2015 estimated)
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$170
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Add: Ity Mine EBITDA
(Jan-Nov 2015 estimated)
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$45
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Operating EBITDA
(adjusted to full year basis)
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$143
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$215
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Net debt to
Operating EBITDA ratio
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1.8
times
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0.7
times
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* Operating EBITDA is all-in sustaining margin
and operating earnings before interest and finance costs, tax,
depreciation and amortization
** The preliminary Q4 2015 production and other financial
information provided in this news release are approximate
figures
and may differ from the final results included in the 2015 annual
audited statements and MD&A
Neil Woodyer, CEO,
stated
"We are very pleased to report our above-guidance production
performance for the group which was achieved with an outstanding
health and safety record for the year. In addition to
increasing production by 11% compared to 2014, we have reduced our
costs by at least 8% as the group AISC/oz for 2015 is anticipated
to remain below our 2015 guidance range of $930 to $980.
During 2015, the strong performance of our mining operations,
the creation of a strategic partnership with Naguib Sawiris, the significant reduction in our
net debt from $254 million to $143
million, our continued growth with the addition of Ity as
our fifth gold mine, and the advancement of our strong project
development pipeline have all been important contributors to the
80% increase in our share price, in an environment where the
S&P TSX Global Gold Index declined by 10%.
For 2016, we are expecting continued cost improvements with
an AISC/oz guidance range of $875 to
$925 while our gold production is forecast to increase to
575,000 to 600,000 ounces. We are benefiting from our five
mine platform that facilitates the sharing of costs, knowledge and
risks. In addition, we are well positioned to continue our
growth strategy at this low point in the gold price cycle with our
reconstituted balance sheet giving us good downside
protection."
2016 Production and AISC/oz Guidance
- Endeavour Mining is providing 2016 production guidance of
575,000 to 600,000 ounces at an all-in sustaining cost per ounce of
$875 to $925.
- While the mine production forecasts are largely in line with
2015 production rates: Agbaou production is expected to decline
modestly due to changing ore feed; Nzema production is expected to
increase with additional deliveries of high grade third-party ore
during the Adamus pit push-back period; and Tabakoto production is
expected to increase as the operating improvements of Q4 2015 are
sustained in 2016.
Table 3: 2016 Production guidance by mine (ounces, 100%
basis1)
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Mine
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2013
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2014
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2015
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2016
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Actual
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Actual
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Actual
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Guidance
Range
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Agbaou
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6,132
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146,757
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181,365
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165,000
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-
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175,000
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Nzema
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103,464
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115,129
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110,302
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110,000
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-
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130,000
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Tabakoto
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125,231
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127,323
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152,186
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155,000
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-
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175,000
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Youga
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89,448
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76,561
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68,407
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40,000
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-
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45,000
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Ity
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80,807
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65,000
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-
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75,000
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Total
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324,275
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465,770
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593,066
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535,000
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-
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600,000
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Selected 2016
guidance range
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575,000
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-
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600,000
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1 Gold production is on a 100% consolidated
basis. Actual mine ownership is Agbaou – 85%, Nzema – 90%,
Tabakoto – 80%, Youga – 90%, Ity – 55%
Table 4: 2016 AISC/oz guidance by mine ($/oz)
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2016 Guidance Range
($/oz)
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Agbaou
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$650
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-
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$700
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Nzema
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$970
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-
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$1,020
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Tabakoto
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$920
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-
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$970
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Youga
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$980
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-
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$1,030
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Ity
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$800
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-
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$850
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Mine-level
AISC/oz
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$830
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-
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$880
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Plus Corporate
G&A
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$35
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Plus Sustaining
exploration
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$10
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AISC/oz
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$875
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-
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$925
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Figure 1: 2016 AISC Guidance Range and Historical
Trend
Please click on link below:
http://files.newswire.ca/910/Endeavour_Fig1n.pdf
2016 Derived AISC Margin and Free Cash Flow
- At a gold price of $1,150 per
ounce and using the mid-point of 2016 production and AISC/oz
guidance ranges, Endeavour Mining is projecting an AISC margin of
approximately $148 million in 2016,
or $250 per ounce.
- Exploration has been allocated $20
million toward programs focused on reserve replacement and
mine life extensions, with $6 million
or approximately $10 per 2016
production ounce toward sustaining exploration programs and
$14 million toward non-sustaining
exploration programs.
- Non-sustaining project capital has been allocated $48 million, which includes installation of a
secondary crusher at the Agbaou Mine, a pit wall push-back at the
Nzema Mine, non-sustaining exploration programs ($14 million mentioned earlier), and
project-related investments at both Houndé and Ity CIL
projects.
- Endeavour Mining is continuing to prepare the Houndé Project
for a construction decision in the first half of 2016 and expects
to complete the Ity CIL feasibility study by mid-year 2016.
Table 5: Derived 2016 AISC margin and Free Cash Flow
(before working capital movement, tax and financing)
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2016 Production
(ounces, guidance range mid-point)
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587,500
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2016 AISC/oz ($/oz,
guidance range mid-point)
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$900
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US$
million
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$ / ounce
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$1,150
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gold price
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Revenue
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676
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$1,150
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Less: AISC costs
(includes Corporate G&A, sustaining capital
and sustaining exploration costs)
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528
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$900
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All-in sustaining
margin
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148
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$250
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Non-sustaining
capital
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Current allocations
include:
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48
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$80
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Agbaou Mine secondary crusher - $12 million
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Nzema Mine push-back - $12 million
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Houndé Project - $5 million
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Ity
CIL Project - $5 million
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Non-sustaining exploration - $14 million
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Free cash
flow (before working capital movement, tax and financing
costs)
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100
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$170
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- At $1,150 gold price, and with
the current allocations to non-sustaining capital, the free cash
flow (before working capital movement, tax and financing costs) is
projected to be $100 million or
$170 per ounce, with a $30 million sensitivity for a $50 per ounce gold price movement.
Qualified Persons
Adriaan "Attie" Roux, Pr.Sci.Nat,
Endeavour Mining's Chief Operating Officer, is a Qualified Person
under NI 43-101, and has reviewed and approved the technical
information in this news release.
About Endeavour Mining Corporation
Endeavour Mining is a TSX-listed intermediate gold mining
company producing approximately 600,000 ounces per year from five
mines in West Africa. 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.
On behalf of Endeavour Mining Corporation
Neil Woodyer
Chief Executive Officer
Cash cost per ounce and all-in sustaining cash cost per ounce,
all-in sustaining margin, operating EBITDA, free cash flow, and net
debt are non-GAAP performance measures with no standard meaning
under IFRS. This news release contains "forward-looking statements"
including but not limited to, statements with respect to Endeavour
Mining'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 Mining operates. Although Endeavour Mining 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 Mining's most recent Annual Information Form filed under
its profile at www.sedar.com for further information respecting the
risks affecting Endeavour Mining and its business.
SOURCE Endeavour Mining Corporation