VANCOUVER, May 12, 2014 /CNW/ - Endeavour Mining Corporation ("Endeavour" or the "Corporation") (TSX:EDV) (ASX:EVR) (OTCQX:EDVMF) announces record quarterly gold production of 105,912 ounces resulting in gold revenue of $137 million in Q1 2014 that generated an all-in sustaining margin of $25 million. Agbaou, which achieved commercial production in Q1 2014, continues to demonstrate strong sustained performance by running above plan on mined grade, throughput and recoveries.
(All amounts in US dollars unless otherwise indicated)
Q1 2014 Financial and Operating Highlights
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Neil Woodyer, CEO, stated
"We are very pleased to have achieved record quarterly gold production of 106,000 ounces with the increase coming from the successful start-up and subsequent strong operating performance at Agbaou along with the 10% reduction in AISC per ounce compared to Q1 2013.
Agbaou continues to outperform on all of our key metrics and we expect the mine to be a strong cash flow generator for the group going forward.
The transition to owner mining at Tabakoto, which will lower mine-level AISC costs and improve cash flows, is progressing well with all underground mining contractors now off-site and all underground mining activities being completed by Endeavour employees. We are pleased to have retained over 300 employees who previously worked for the contractor, which provides a high level of workforce continuity with site experience.
Houndé continues to progress through the permitting phase with the granting of the mining permit expected later this year. The Projects Team, which built Agbaou, has taken control of the Houndé project and are evaluating the approach to construction. Endeavour is now producing gold at a rate of over 400,000 ounces per year at an AISC of $1,059/oz in Q1 which includes the low cost production - less than $650/oz AISC - from the newly-constructed Agbaou mine. The Houndé Project has the potential to expand Endeavour's low cost production base.
Q1 2014 Operational Results by Mine
Agbaou Gold Mine, Côte d'Ivoire
- Gold production of 24,086 ounces in Q1 2014 (includes 9,148 pre-production ounces from January 2014)
- Cash cost in Q1 of $594/oz sold
- Mine-level AISC of $647/oz sold (references to mine-level AISC includes cash costs, royalties, and sustaining capital)
- Agbaou has been performing above plan since commissioning due to higher than planned mined grades, good recoveries and a relatively quick and successful ramp up
Tabakoto Gold Mine, Mali
- Gold production of 33,472 ounces in Q1 2014
- Cash cost of $1,157/oz sold
- Mine-level AISC of $1,320/oz sold
- Cash costs in Q1 2014 were expected to be above the full-year cost guidance range of $790 to $840 due to:
- the transition to owner-mining which was budgeted to incur some overlapping-costs in preparation for the contractor departure on March 31, 2014
- the continued development of Segala, a second underground mine which is progressing to commercial ore production during the second half of 2014
- processing of lower grade stockpiles during the first half of 2014, which will gradually be replaced by ore from Segala during the second half of 2014
- Cash costs are then expected to improve in the second half of the year with the ramp up of Segala
- Segala development is progressing well and by April 30, 2014 the decline extended over 1,271 metres and 3,038 metres of lateral development has been completed on four levels to provide access to the ore body. Mining of underground stoping ore commenced during Q2 2014
Nzema Gold Mine, Ghana
- Gold production of 28,487 ounces in Q1 2014
- Cash cost of $890/oz sold
- Mine-level AISC of $1,046/oz sold
- Mined grade of 2.05 g/t in Q1 2014 is significantly above 1.30 g/t mined in Q1 2013 as mining has progressed to deeper levels
- Milled grade was 2.75 g/t in Q1 2014 compared to 1.58 g/t in Q1 2013 as a result of processing ore with improved mined grade and the inclusion of higher grade purchased ore from third parties
Youga Gold Mine, Burkina Faso
- Gold production of 19,867 ounces in Q1 2014
- Cash cost of $680/oz sold
- Mine-level AISC of $758/oz sold
- Continues to be low cost and to generate good cash flow with very low sustaining capital expenditure
Table 1: Q1 2014 Margin Generation and All-in Sustaining Cost
| 3 Months Ended | ||||||||
| Mar 31, 2014 | ||||||||
| US$ M | In Gold Ozs* | |||||||
| Gold revenue | $137.2 | 105,666 | ||||||
| Less: Royalties | 7.2 | 5,512 | ||||||
| Less: Cash costs for ounces sold | 92.9 | 71,508 | ||||||
| Mine cash margin | 37.2 | 28,645 | ||||||
| Less: Corporate G&A | 5.4 | 4,155 | ||||||
| Corporate EBITDA | 31.8 | 24,491 | ||||||
| Less: Sustaining capital | 5.8 | 4,443 | ||||||
| Less: Sustaining exploration | 0.8 | 588 | ||||||
| All-in sustaining margin | $25.3 | 19,460 | ||||||
| 3 Months Ended | ||||||||
| Mar 31, 2014 | ||||||||
| Gold sold (ozs)* | 105,666 | |||||||
| US$ M | $/oz | |||||||
| Royalties | $7.2 | $68 | ||||||
| Cash costs for ounces sold (see Table 2 for details) | 92.9 | 879 | ||||||
| Corporate G&A (attrib. to operations) | 5.4 | 51 | ||||||
| Sustaining capital | 5.8 | 55 | ||||||
| Sustaining exploration | 0.8 | 7 | ||||||
| All-in sustaining cost | $111.9 | $1,059 | ||||||
| Numbers may not add due to rounding | ||||||||
| *Gold ozs sold excludes 6,132 ozs from Agbaou prior to commercial production | ||||||||
Table 2: Q1 2014 Cash Costs and AISC by Mine
| Tabakoto | Nzema | Youga | Agbaou2 | Total | ||||
| Mining Physicals | ||||||||
| Total tonnes mined - Open pit | 000t | 1,740 | 1,943 | 1,112 | 2,878 | |||
| Total tonnes mined - Underground | 000t | 244 | - | - | - | |||
| Total ore tonnes - Open pit | 000t | 106 | 313 | 327 | 507 | |||
| Total ore tonnes - Underground | 000t | 121 | - | - | - | |||
| Total tonnes milled | 000t | 350 | 396 | 251 | 318 | |||
| Gold sold | ozs | 35,407 | 28,533 | 19,838 | 21,888 | 105,666 | ||
| Unit cost analysis | ||||||||
| Mining costs - Open pit1 | $/t mined | 4.81 | 4.89 | 5.24 | 2.61 | |||
| Mining costs - Underground1 | $/t ore | 95.53 | - | - | - | |||
| Processing and maintenance | $/t milled | 30.35 | 18.89 | 23.82 | 9.50 | |||
| Site G&A | $/t milled | 15.55 | 7.70 | 9.39 | 4.53 | |||
| Cash cost details | ||||||||
| Mining costs - Open pit | $000s | $8,379 | $7,977 | $5,828 | $7,525 | $29,709 | ||
| Mining costs - Underground | $000s | 8,824 | - | - | - | 8,824 | ||
| Processing and maintenance | $000s | 10,625 | 7,470 | 5,985 | 3,019 | 27,099 | ||
| Site G&A | $000s | 5,444 | 3,046 | 2,360 | 1,439 | 12,289 | ||
| Purchased ore at Nzema | $000s | - | 7,274 | - | - | 7,274 | ||
| Inventory adjustments | $000s | 7,711 | -385 | -674 | 1,009 | 7,661 | ||
| Cash costs for ounces sold | $000s | $40,983 | $25,381 | $13,499 | $12,993 | $92,856 | ||
| Royalties | $000s | $2,746 | $2,088 | $1,218 | $1,106 | $7,158 | ||
| Sustaining capital | $000s | $3,022 | $2,380 | $315 | $52 | $5,769 | ||
| Cash cost per ounce sold | $/oz | $1,157 | $890 | $680 | $594 | $879 | ||
| Mine-level AISC per ounce sold | $/oz | $1,320 | $1,046 | $758 | $647 | |||
| Other costs used to derive unit mining cost | ||||||||
| Capitalized mining costs | $000s | $2,760 | $1,515 | - | - | $4,275 | ||
| Numbers may not add due to rounding | ||||||||
| 1 | Includes capitalized mining costs | |||||||
| 2 | Agbaou is shown for 2 month period after commercial production declared in January 2014 | |||||||
Table 3: Q1 2014 Financing Activities and Reconciliation of Cash Position
| US$ M | |||
| Cash - Opening Balance (Dec 31, 2013) | $73.3 | ||
| All-in sustaining margin | 25.3 | ||
| Non-sustaining investments | |||
| Tabakoto | 16.5 | ||
| Nzema and other | 2.6 | ||
| Exploration | 0.4 | ||
| Houndé | 0.7 | ||
| -20.2 | |||
| Change in working capital and other | -3.9 | ||
| Taxes and interest paid | -4.1 | ||
| Gold hedge settlement * | -2.7 | ||
| Cash - Ending Balance (Mar 31, 2014) | $67.7 | ||
| Numbers may not add due to rounding | |||
| *5,150 ounces at Nzema and 3,033 ounces at Tabakoto | |||
Q1 2014 Adjusted Earnings
Net earnings / (loss) from continuing operations (attributable to Endeavour shareholders) have been adjusted for the impact of fair value change of certain financial instruments, including the gold price protection program. Other adjustments include deferred income tax expense, which relates to an increase in losses from a realized hedge loss, adjustments related to investments in associates, stock-based payments, foreign currency, and marketable securities.
Table 4: Adjusted Net Earnings Reconciliation for the Quarter Ended March 31, 2014
| 3 Months Ended Mar 31, 2014 |
|||
| US$ M | |||
| Net earnings attributable to shareholders of Endeavour | $5.0 | ||
| Change in unrealized loss - gold price protection program | 1.5 | ||
| Loss on derivative financial liabilities | 8.9 | ||
| Imputed interest on promissory note | -0.5 | ||
| Loss on foreign currency | -0.5 | ||
| Gain on sale of subsidiary | -1.2 | ||
| Stock-based payments | 0.2 | ||
| Deferred income tax expense | -8.6 | ||
| Adjusted net earnings after tax | $4.8 | ||
| Weighted average number of outstanding shares | 413,046,943 | ||
| Adjusted net earnings per share (basic, US$ per share) | $0.01 | ||
Financial Statements and related MD&A will be available on SEDAR, the ASX website, OTC Markets website, and in the Investor Relations section of Endeavour's website www.endeavourmining.com.
In order to access the Corporation's MD&A and financial statements directly, please click the following URL: http://files.newswire.ca/910/MDAEndvMrch31.pdf
Conference Call Details
Management will host a conference call to discuss the Q1 2014 results on May 12, 2014 as detailed below. The conference call will feature Neil Woodyer, Chief Executive Officer, Attie Roux, Chief Operating Officer, and Christian Milau, Chief Financial Officer.
Analysts and interested investors are invited to participate in the call using the dial in numbers below.
| International: | +1 201-689-8040 |
| North American toll-free: | +1 877-407-8133 |
| Australian toll-free: | +1 800-687-004 |
The conference call can also be accessed through the following link: http://www.endeavourmining.com/s/Webcasts.asp
The conference call will be held and webcast by Issuer Direct on Monday May 12, 2014 at:
| 8:00 am | in Vancouver |
| 11:00 am | in Toronto and New York |
| 4:00 pm | in London |
| 11:00 pm | in Hong Kong and Perth |
The call will be archived for later playback on Endeavour's website until May 12, 2015.
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 is a Canadian-based gold mining company producing over 400,000 ounces per year from four mines in West Africa. Endeavour 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, all-in sustaining cash cost per ounce, and adjusted net earnings 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'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.
PDF available at: http://stream1.newswire.ca/media/2014/05/12/20140512_C7748_DOC_EN_40191.pdf
SOURCE: Endeavour Mining Corporation
Doug Reddy
SVP Business Development
+1 604 609 6114
[email protected]
UK/Europe: Bobby Morse
Buchanan
+44 20 7466 5000
[email protected]
Endeavour Mining Corporation
Corporate Office
Suite 3123, 595 Burrard Street,
P.O. Box 49139
Vancouver, BC V7X 1J1 Canada
Tel: +1 604 685 4554
A Cayman Islands exempted company with limited liability.
ARBN 153 067 639
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