Endeavour Reports Q3-2024 Results
ENDEAVOUR REPORTS Q3-2024 RESULTSAdjusted EBITDA of $317m • Free Cash Flow of $97m • Shareholder returns paid of $229m
OPERATIONAL AND FINANCIAL HIGHLIGHTS
Strongest quarterly production this year of 270koz at AISC of $1,287/oz; YTD-2024 production of 741koz at AISC of $1,256/oz with FY-2024 production expected at or around the low end of guidance with AISC above the top end
YTD-2024 AISC impact of $149/oz by higher royalty costs driven by higher gold prices, low grid power availability in H1-2024 and underperformance at the Sabodala-Massawa CIL
Adj. EBITDA of $317m for Q3-2024, up 27% over Q2-2024, and Adj. Net Earnings of $74m (or $0.30/sh) for Q3-2024
Operating cash flow before changes in working capital of $245m (or $1.00/sh), up 15% over Q2-2024
Free Cash Flow of $97m (or $0.40/sh) for Q3-2024, up 20% over Q2-2024
Healthy financial position with improved net debt of $834m and leverage of 0.77x tracking towards 0.5x target following completion of growth phase
Shareholder returns paid of $229m; H1-2024 dividend of $100m (or $0.41/sh) and $29m of share buybacks year to date
ORGANIC GROWTH
Commercial production achieved on budget and on schedule at both Sabodala-Massawa BIOX® Expansion and Lafigué on 1 August 2024; both project ramp-ups tracking in line with expectations
Strong exploration efforts with $74m spent YTD-2024; high priority Tanda-Iguela exploration programme has identified continuous shallow mineralisation at the Pala Trend 3 target within close proximity to the Assafou project
London, 7 November 2024, Endeavour Mining plc ((LSE:EDV, TSX:EDV, OTCQX:EDVMF) ("Endeavour", the "Group" or the "Company") is pleased to announce its operating and financial results for Q3-2024 and YTD-2024, with highlights provided in Table 1 below.
Table 1: Q3-2024 and YTD-2024 Highlights from continuing operations1
All amounts in US$ million unless otherwise specified
THREE MONTHS ENDED
NINE MONTHS ENDED
30 September 2024
30 June 2024
30 September 2023
30 September 2024
30 September 2023
Δ Q3-2024 vs. Q2-2024
OPERATING DATA
Gold Production, koz
270
251
281
741
792
+8%
Gold sold, koz
280
238
278
743
799
+18%
All-in Sustaining Cost2,3, $/oz
1,287
1,287
967
1,256
974
, %
Realised Gold Price4, $/oz
2,342
2,287
1,903
2,233
1,910
+2%
CASH FLOW
Operating Cash Flow before changes in working capital
245
213
121
595
500
+15%
Operating Cash Flow before changes in working capital2, $/sh
1.00
0.87
0.49
2.43
2.02
+15%
Operating Cash Flow
255
258
115
568
453
(1)%
Operating Cash Flow2, $/sh
1.04
1.05
0.47
2.32
1.83
(1)%
Free Cash Flow2,5
97
81
(80)
45
(130)
+20%
Free Cash Flow2,5, $/sh
0.40
0.33
(0.32)
0.18
(0.53)
+21%
PROFITABILITY
Net Earnings Attributable to Shareholders
(95)
(60)
60
(175)
137
n.a.
Net Earnings, $/sh
(0.39)
(0.24)
0.24
(0.71)
0.55
n.a.
Adj. Net Earnings Attributable to Shareholders2
74
3
70
117
188
+2367%
Adj. Net Earnings2, $/sh
0.30
0.01
0.28
0.48
0.76
+2900%
EBITDA2
128
193
262
477
704
(34)%
Adj. EBITDA2
317
249
263
779
755
+27%
SHAREHOLDER RETURNS2
Shareholder dividends paid
,
,
100
100
200
n.a.
Share buybacks
9
8
20
29
40
+13%
FINANCIAL POSITION HIGHLIGHTS2
Net Debt
834
835
445
834
445
, %
Net Debt / LTM Trailing adj. EBITDA6
0.77x
0.81x
0.40x
0.77x
0.40x
(5)%
1 Continuing Operations excludes the non-core Boungou and Wahgnion mines which were divested on 30 June 2023. 2This is a non-GAAP measure, refer to the non-GAAP Measures section for further details. 3Excludes pre-commercial costs and ounces sold. 4Realised gold prices are inclusive of the Sabodala-Massawa stream and the realised gains/losses from the Group's revenue protection programme.5From all operations; calculated as Operating Cash Flow less Cash used in investing activities 6Last Twelve Months ("LTM") Trailing EBITDA adj includes EBITDA generated by discontinued operations.
Management will host a conference call and webcast today, 7 November 2024, at 8:30 am EST / 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. A copy of the Management Report and Financial Statements have been submitted to the National Storage Mechanism and will be 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.
Ian Cockerill, Chief Executive Officer, commented: "During Q3-2024 we continued to deliver against our strategic objectives as we successfully completed our growth phase, achieving commercial production at our two organic growth projects, which supported our strongest quarter of production this year and underpinned our transition to a phase focused on free cash flow generation.
On the operational front, we expect full-year production to be at or around the low end of the guidance range, while our all-in sustaining cost is expected to be above the top end of the range, due to higher royalty and power costs as well as lower production at the Sabodala-Massawa CIL operation. Despite above average rainfall early in the Q4, our performance is expected to be significantly stronger than Q3, supported by the ramp ups of our growth projects as well as increased production at the Houndé and Mana mines, in line with their mine sequences.
During the quarter, we completed construction and achieved commercial production at the Sabodala-Massawa BIOX Expansion and the Lafigué mine, with both projects ramping up in line with expectations and achieving nameplate throughput capacity during the quarter. At the top tier Assafou project, where the preliminary feasibility study is on track for completion in Q4, we continue to see significant exploration upside, both at the Assafou project, and on the wider Tanda-Iguela property.
We achieved a significant free cash inflection during the quarter, generating approximately $100 million of free cash flow, and given our strong outlook, we are now focused on shareholder returns and our balance sheet. We repaid $160 million of our revolving credit facility during the quarter, while our stronger earnings supported an improvement in our leverage, as we advanced towards our 0.5x leverage target. On shareholder returns, we paid our H1-2024 dividend of $100 million and we have now returned $229 million to shareholders this year through dividends and share buybacks. We will increase our focus on supplemental shareholder returns over the coming quarters.
Looking forward, we have visibility to organically grow the production profile to our 1.5 million ounce portfolio objective by the end of the decade, while maintaining best in class margins. We expect to outline our new outlook next year, which will underpin our continued commitments to disciplined capital allocation and delivering attractive shareholder returns."
SHAREHOLDER RETURNS PROGRAMME
Endeavour implemented a shareholder returns programme for the 2021 - 2023 period that was comprised of three annual minimum dividends totalling $450.0 million, supplemented by additional dividends and share buybacks. Over the shareholder returns programme period, Endeavour returned $903.0 million to shareholders comprised of $600.0 million of dividends and $303.0 million of share buybacks; more than double the minimum commitment and equivalent to $211 returned for every ounce produced over the 2021-2023 period.
During Q3-2024, Endeavour implemented a new shareholder returns programme to reflect its transition from a phase focused on investment to one focused on free cash flow generation. The new programme is comprised of minimum dividends of $435.0 million over the 2024-2025 period, that are expected to be supplemented with additional dividends and share buybacks.
Dividends are expected to be paid semi-annually, provided that the prevailing gold price for the dividend period is at or above $1,850/oz and the Company has a healthy financial position. Supplemental returns are expected to be paid in the form of dividends and opportunistic share buybacks, if the gold price exceeds $1,850/oz and if the Company has a healthy financial position.
Since the beginning of the year, Endeavour has paid $200.0 million in dividends including the H2-2023 dividend of $100.0 million ($0.41/sh) paid on 25 March 2024 (within the 2021 - 2023 programme) and the H1-2024 dividend of $100.0 million ($0.41/sh) paid on 10 October 2024 and returned an additional $28.9 million or 1.46 million shares through opportunistic share buybacks, of which $8.8 million or 0.42 million shares were repurchased during Q3-2024.
Since payment of the first dividend in FY-2021, Endeavour has returned more than $1,032.0 million to shareholders, including $700.0 million of dividends and $332.0 million of share buybacks.
Table 2: Cumulative Shareholder Returns
(All amounts in US$m)
MINIMUM DIVIDEND COMMITMENT
SUPPLEMENTAL DIVIDENDS
BUYBACKS COMPLETED
TOTAL RETURN
△ ABOVE MINIMUM COMMITMENT
FY-2020
,
60
,
60
+60
2021-2023 Shareholder Returns Programme (completed)
FY-2021
125
15
138
278
+153
FY-2022
150
50
99
299
+149
FY-2023
175
25
66
266
+91
2024-2025 Shareholder Returns Programme (ongoing)
H1-2024
100
,
20
120
+20
H2-2024 (Minimum)
110
,
9
119
+9
FY-2025 (Minimum)
225
,
,
225
,
TOTAL
885
150
332
1,367
+482
OPERATING SUMMARY
Strong safety performance for the Group, with a Lost Time Injury Frequency Rate ("LTIFR") from continuing operations of 0.12 for the trailing twelve months ended 30 September 2024.
Q3-2024 production amounted to 270koz, an increase of 19koz over Q2-2024, due to the ramp up of the Sabodala-Massawa BIOX and Lafigué operations to commercial production, both of which were achieved on 1 August 2024, as well as higher production at Houndé, which was partially offset by lower production at Ity, Mana and the Sabodala-Massawa CIL operation. Production increased at Houndé due to higher average grades processed and at Lafigué due to the ramp-up of the mine towards nameplate capacity, which was achieved late in Q3. Production decreased at Ity due to lower average grades processed in line with the mine sequence, at Mana due to lower tonnes milled following the depletion of the Maoula open pit, and at Sabodala-Massawa CIL due to the continued lower grade mill feed as well as strike action, maintenance activity and significantly above average rainfall lowering throughput levels.
Q3-2024 AISC was stable quarter on quarter at $1,287/oz as commercial production commenced at the low cost Lafigué mine coupled with lower AISC at Houndé, which was offset by higher AISC at Ity, Sabodala-Massawa and Mana. Lower AISC at Houndé was due to higher grades processed and lower power costs as grid power availability improved significantly compared to Q2-2024. Higher AISC at Ity, Sabodala-Massawa and Mana were largely due to lower volumes of gold sold and higher royalty costs due to higher gold prices, as well as higher sustaining capital at Ity and Sabodala-Massawa.
Table 3: Group Production
THREE MONTHS ENDED
NINE MONTHS ENDED
All amounts in koz, on a 100% basis
30 September2024
30 June2024
30 September2023
30 September2024
30 September2023
Houndé
74
64
109
179
228
Ity
77
96
73
259
250
Mana
30
35
30
107
106
Sabodala-Massawa1
54
57
69
159
209
Lafigué1
36
,
,
36
,
PRODUCTION FROM CONTINUING OPERATIONS
270
251
281
741
793
Boungou2
,
,
,
,
33
Wahgnion2
,
,
,
,
68
GROUP PRODUCTION
270
251
281
741
893
1Includes pre-commercial ounces that are not included in the calculation of All-In Sustaining Costs.2The Boungou and Wahgnion mines were divested on 30 June 2023.
Table 4: Group All-In Sustaining Costs
All amounts in US$/oz
THREE MONTHS ENDED
NINE MONTHS ENDED
30 September2024
30 June2024
30 September2023
30 September2024
30 September2023
Houndé
1,379
1,472
787
1,457
959
Ity
928
885
864
898
793
Mana
1,987
1,927
1,734
1,756
1,408
Sabodala-Massawa1
1,219
1,164
840
1,112
795
Lafigué1
938
,
,
938
,
Corporate G&A
45
48
40
47
50
AISC FROM CONTINUING OPERATIONS
1,287
1,287
967
1,256
974
Boungou2
,
,
,
,
1,639
Wahgnion2
,
,
,
,
1,566
GROUP AISC3
1,287
1,287
967
1,256
1,045
1Excludes pre-commercial costs associated with ounces from the BIOX expansion project and the Lafigué mine. 2The Boungou and Wahgnion mines were divested on 30 June 2023. 3This is a non-GAAP measure, refer to the non-GAAP Measures section for further details.
FY-2024 OUTLOOK
Group production is expected to be at or around the low end of the FY-2024 production guidance of 1,130, 1,270koz as outperformance at Ity coupled with strong performances at Houndé and Lafigué are expected to be partially offset by the lower performance at the Sabodala-Massawa CIL operation
Group AISC is expected to be above the top end of the $955, 1,035/oz guided range, due to underperformance at the Sabodala-Massawa CIL operation driving lower production and higher AISC, compounded by higher royalty costs associated with the prevailing higher gold prices and low grid power availability during H1-2024 affecting assets in Burkina Faso and Côte d'Ivoire.
Table 5: FY-2024 Production Outlook
YTD-2024 ACTUALS
FY-2024 GUIDANCE
FY-2024 OUTLOOK
(All amounts in koz, on a 100% basis)
Houndé
179
260 - 290
ON TRACK
Ity
259
270 - 300
ABOVE TOP END
Mana
107
150 - 170
ON TRACK
Sabodala-Massawa1
159
360 - 400
BELOW LOWER END
Lafigué1
36
90 - 110
ON TRACK
Group Production
741
1,130 - 1,270
NEAR LOW END
1Includes pre-commercial production ounces
As previously guided, FY-2024 operational performance is weighted towards Q4-2024, which is expected to be the strongest quarter year to date. Q4-2024 production is predicated on expected improvements at the Houndé, Mana, Sabodala-Massawa and Lafigué mines in Q4-2024. Houndé is expected to benefit from higher grade ore from the Kari Pump pit in the mill feed, which historically has had slightly lower recoveries. At Mana, improved access to higher grade undergound stopes should support higher grade and volumes of throughput, if the above average rainfall seen in Q3-2024 decreases. The Sabodala-Massawa CIL operation will be supported by new non-refractory higher-grade ore sources, where pre-stripping activity is largely complete. The Sabodala-Massawa BIOX and Lafigué operations are expected to continue to improve as they complete a full quarter at nameplate production. Conversely at Ity average grades processed are expected to decrease as a lower proportion of Ity and Bakatouo ore will be in the mill feed.
At Sabodala-Massawa, FY-2024 production is expected to be below the guided range due to lower availability of high-grade non-refractory ore, particularly from the Sabodala pit as mining activities focused on depleting the pit ahead of the potential commencement of in-pit tailings deposition in 2025. To supplement the mill feed at the Sabodala-Massawa CIL plant, the Kiesta C and Niakafiri East deposits have been accelerated into the mine plan, adding higher-grade non-refractory oxide ores into the FY-2024 mine plan, that were previously in the plan for FY-2025, resulting in a decrease in availability of higher-grade non-refractory oxide ores in the FY-2025 mine plan. The Sabodala-Massawa exploration programme is prioritising the delineation of potential high-grade non-refractory oxide targets Sekoto, Mamassato and Koulouqwinde, that could be incorporated into the near term mine plan.
Table 6: FY-2024 All-In Sustaining Cost Outlook
YTD-2024 ACTUALS
FY-2024 GUIDANCE
FY-2024 OUTLOOK
(All amounts in US$/oz)
Houndé
1,457
1,000 - 1,100
ABOVE TOP END
Ity
898
850 - 925
ON TRACK
Mana
1,756
1,200 - 1,300
ABOVE TOP END
Sabodala-Massawa1
1,112
750 - 850
ABOVE TOP END
Lafigué1
938
900 - 975
ON TRACK
Corporate G&A
47
40
ON TRACK
Group AISC
1,256
955 - 1,035
ABOVE TOP END
1Excludes pre-commercial production costs and ounces
Group AISC guidance is expected to be above the top end of the guided range due to higher gold prices increasing royalty costs (realised gold price exclusive of hedges of $2,321/oz in YTD-2024 above guidance gold price of $1,850/oz, resulting in a +$34/oz impact on YTD-2024 AISC), lower grid power availability in H1-2024 (+$35/oz impact on group AISC YTD-2024) impacting Houndé (approximately $58/oz YTD-2024 impact) and Mana (approximately +$117/oz YTD-2024 impact) and lower levels of production at higher costs at Sabodala-Massawa (+$80/oz impact on YTD-2024) due to lower availability of high grade non-refractory ore as mining activities focussed on depleting the Sabodala pit.
Table 7: YTD-2024 All-In Sustaining Cost Impacts
YTD-2024ACTUALS
FY-2024OUTLOOK
(All amounts in US$/oz)
Group AISC at $1,850/oz1
955 - 1,035
Royalties at $2,321/oz2realised gold price
+34
(+) Increase expected in Q4-2024 given high gold price
Low grid power availability in H1-20243
+35
(-) Availability largely improved in early Q3-2024
Sabodala-Massawa CIL performance
+80
(-) Significantly stronger performance expected in Q4-2024
Group AISC at $2,321/oz2(actual)
1,256
(-) Stronger production at lower AISC improving FY-2024 AISC
1FY-2024 group AISC guidance was issued at a $1,850/oz gold price 2The realised YTD-2024 gold price, exclusive of the Sabodala-Massawa stream and the realised gains/losses from the Group's revenue protection programme, amounted to $2,321/oz. 3As previously disclosed, grid availability issues increased self-generated power costs across Burkina Faso and Côte d'Ivoire assets during the YTD-2024 period.
The impact of higher gold prices on royalty costs, low grid power availability in H1-2024 and Sabodala-Massawa CIL underperformance on YTD-2024 AISC has been approximately $149/oz, while Q4-2024 AISC is expected to be significantly lower than YTD-2024 AISC due to higher levels of production and gold sales, which is expected to be partially offset by higher royalty costs due to the higher prevailing gold prices quarter to date.
Group sustaining capital expenditure outlook for FY-2024 has been lowered by $5.0 million to $120.0 million, with $80.5 million incurred in YTD-2024 (net of YTD-2024 corporate sustaining capital of $2.1 million), and $30.2 million incurred in Q3-2024 (net of Q3-2024 corporate sustaining capital of $1.1 million). The decrease is due to the lower sustaining capital outlook expected at Sabodala-Massawa due to lower levels of production and a decrease in planned waste development, and at Lafigué due to the redesign of the main pit pushback, which was partially offset by higher sustaining capital at Mana due to increased underground development and leasing payments to contractors.
Group non-sustaining capital expenditure outlook for FY-2024 has been increased by $35.0 million to $225.0 million, with $162.0 million incurred in YTD-2024, and $68.9 million incurred in Q3-2024. The increase is due to increased non-sustaining capital at Ity due to accelerated waste stripping and TSF 2 construction resulting from higher than guided levels of production, at Mana due to increased underground development to gain more access to underground stopes, and at Lafigué due to the main pit pushback redesign.
Growth capital expenditure outlook for FY-2024 remains unchanged at $245.0 million, with $227.4 million incurred in YTD-2024, primarily related to construction activities at the Sabodala-Massawa BIOX® expansion project ($62.4 million incurred in YTD-2024 compared to FY-2024 guidance of $75.0 million), the Lafigué mine ($157.2 million incurred in YTD-2024 compared to guidance of $170.0 million) and additional spend related to the Kalana project.
Exploration expenditure outlook for FY-2024 is expected to be slightly above the $77.0 million guidance, of which $74.4 million was incurred in YTD-2024, due to the accelerated exploration activity at Sabodala-Massawa focused on delineating near-term non-refractory targets. Exploration expenditure is expected to decrease into Q4-2024 as the programmes focus on compilation and desktop work for reserve and resource updates as well as targeting ...
