Mining in Ghana: A partnership - Endeavour Mining

GOLD PRODUCER WEST AFRICA CASH FLOW

Mining In Ghana : A partnership25 June 2014

Disclaimer & Forward Looking Statements

GOLD PRODUCER WEST AFRICA CASH FLOW 2

This presentation 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 relatedto 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.


Endeavour Delivers

• West African gold producer with four operating mines producing between 400,000 and 440,000 oz in 2014

• AISC guidance of $985 to 1,070 per oz for 2014

• Q1 2014 record gold production:

− Produced 105,912 ozs

− Revenue of $137 million

− Cash cost of $879/oz and AISC of $1,059/oz

− All-in sustaining margin of $25 million

• Potential to add ~180,000 oz/yr and expand low-AISC cost production base by advancing Houndé project – now in permitting

• Reserves of 4 million ounces and Measured and Indicated Resources over 6 million ounces in the Inferred category


West African Projects

• Multiple operations, both open-pit and underground

• West African focus, diversified jurisdictions

• Accra-based operations management


Tabakoto Underground Mining

• Record gold revenue and production in 2013:

− Produced 324,275 ozs

− AISC of $1,174/oz

− Revenue of $443 million

− All-in sustaining margin of $93 million

• Key achievements:

− Agbaou mine completed ahead of schedule and under budget

− Changed to owner mining in Tabakoto underground

− Developing Segala underground mine

− Kofi permitted and contributes to Tabakoto production schedule in 2015

− Houndé Project feasibility study completed and now in permitting

Record Production and Key Achievements

Gold Bar at Tabakoto

6

Q1 2014 Highlights


• Good cost profiles at three of our mines and, as expected, a high cost during transitional phase of optimization at Tabakoto

• Q1 2014 AISC/oz of $1,059 is 10% lower than $1,174 in Q1 2013 (on a comparable basis)

Agbaou1 Tabakoto Nzema YougaTotal /

Average

Production (oz) 24,086 33,472 28,487 19,867 105,912

Cash cost / oz $594 $1,157 $890 $680 $879

AISC / oz $647 $1,320 $1,046 $758 $1,059

1 Agbaou production for 3 months of Q1 2014, cash cost and AISC only for Feb and March as commercial production was declared at the end of Jan 2014


2014 Production Guidance

Gold Production (ozs)1

2011 2012 2013 2014

Actual Actual Actual Guidance range

Tabakoto, Mali 91,200 110,301 125,231 140,000 - 155,000

Nzema, Ghana 90,026 109,447 103,464 110,000 - 120,000

Agbaou, Côte d'Ivoire2 - - 6,132 85,000 - 95,000

Youga, Burkina Faso 87,264 91,030 89,448 65,000 - 70,000

TOTAL 268,490 310,778 324,275 400,000 - 440,000

1

2

On a 100% basis1 On a 100% basis2 Agbaou presented on a full 12 month basis in 2014; commercial production was declared on January 27, 2014


Nzema Gold Mine: Ghana

Nzema Gold Mine (90% Endeavour, 10% Ghana)

Resources(incl. of Reserves, 100%)

M&I: 38.4Mt @ 1.4 g/t for 1.7MozInferred: 7.7Mt @ 1.3 g/t for 0.313Moz

Reserves (100%) 9.9Mt @ 2.1 g/t for 0.602Moz

Strip Ratio 3 to 1 (2013)

Processing Rate 1.6 to 2.1Mtpa Gravity/CIL plant

Met. Recovery 91% to 75% depending on ore type

Production

2012 – 109,447 ozs2013 – 103,464 ozs2014 Q1 – 28,487 ozs2014e – 110,000 to 120,000 ozs

Cash Costs ($/oz)2013 - $9172014 Q1 - $8902014e – $780 to $830

Expected Mine Life 6 years from current Reserves

Royalty 5% (+1% third-party at Adamus pits)

Corporate Tax 35%

9GOLD PRODUCER WEST AFRICA CASH FLOW

Regional Geology

Nzema Gold Mine

10

Nzema and the Community


Nzema CSR projects

• Focus on education and youth training. Scholarship programs and partnership with Australian High Commission to train youth in skills development

• Provide good drinking water, sanitation access and partnership with healthcare NGO

• Alternative Livelihood Program for 30 vulnerable Salman households: poultry, pig-rearing, bakery training

• Phase II Livelihood Restoration Program for 60 farmers

• Salman Village: resettlement of 2,200 villagers completed in March 2012

• May 2014 completed 325 houses 1200 people in the Anwia Teleko Bokaso village at a cost of $25m

• Bokrobo village will be affected by mining but no resettlement is contemplated – work with community to overcome the challenges

11

Positive Aspects of Operating in Ghana


• Highly skilled workforce

– Committed– Mining experience – 3 expats of a total of 224

• Clear regulatory framework

– Tax– Mining Code– Environmental regulations

• Ability to build relationships with government agencies

• Infrastructure

– Ports– Roads– Airports– Requires upgrading soon as Ghana

expands rapidly

12

Challenges of Ghana


Power

• Reliability

• Increasing cost

Artisanal Mining

• Resource depletion

• Safety and security of employees

• Reputational risks

• Associated environmental impacts

Land Access

• Increasing difficult

• Source of conflict with communities

13

Avrebo deposit


2012

Reserves2013

reserves

Oz 10,054

8,790

Au, g/t 1.5 1.4

14

Artisanal Workings


15

Critical Success Factors


• Strong relationships with:

– Minerals Commission– EPA– Local communities

• Artisanal Mining Strategy

– Protects the resource– Maintains the company reputation


Neil WoodyerCEO

[email protected]+377 97 98 7161

SVP Business Development


Richard ThomasEVP Technical Services


Doug Reddy

Mining in Ghana: A partnership - Endeavour Mining

Business

Transcript of Mining in Ghana: A partnership - Endeavour Mining