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Press release from CNW Group

Endeavour Mining reports Q2 all-in sustaining cost of $1,038/oz

Wednesday, August 14, 2013

Endeavour Mining reports Q2 all-in sustaining cost of $1,038/oz

17:00 EDT Wednesday, August 14, 2013

VANCOUVER, Aug. 14, 2013 /CNW/ - Endeavour Mining Corporation ("Endeavour" or the "Corporation") (TSX:EDV, ASX:EVR, OTCQX:EDVMF) announces Q2/2013 gold production of 75,421 ounces and an all-in sustaining margin of $25.4 million.  The all-in sustaining cost was $1,038 per ounce sold, down from $1,083 per ounce in Q1, as cost reduction measures began to take effect.

(All amounts in US dollars unless otherwise indicated)

Q2/2013 Financial and Operating Highlights

  • Gold production was 75,421 ounces

  • Gold sold was 73,004 ounces for a mine cash margin of $30.7 million (equivalent to 22,157 ounces of gold), and after corporate costs, sustaining capital and near-mine exploration expenses generated an all-in sustaining margin of $25.4 million (equivalent to 18,307 ounces of gold or a 25% margin). See Table 1 for details

  • Total cash cost per ounce sold was $890. See Table 2 for details

  • Including royalties, corporate costs, sustaining capital and near-mine exploration, the all-in sustaining cost per ounce sold was $1,038.  See Table 3 for details

  • Endeavour invested $59.0 million in new mine construction, development and exploration, as detailed in Table 4, which included $40.4 million for Agbaou construction

  • Adjusted net loss of $11.6 million or $0.03 per share

  • The reported net loss for Q2/2013 included an after-tax non-cash impairment charge of $225.4 million, largely as a result of recording a $141.8 million charge associated with the Nzema Mine.  Earlier in the year, a PEA study on the Nzema Sulphides indicated that additional sulphide resources needed to be identified before proceeding with any further studies.  The decision to defer further sulphides exploration, combined with the recent decline in gold price, has led to this impairment charge at Nzema.  The drop in the gold price has also led to an after-tax, non-cash impairment charge of $24.7 million at the Youga Mine and $5.6 million associated with non-core exploration properties. The impairment charge also included $53.3 million of goodwill.

  • As of June 30, 2013, Endeavour had cash and cash equivalents of $62.2 million with long-term debt of $200 million drawn from a corporate facility

  • Subsequent to quarter end, Endeavour increased its corporate facility to $300 million, with an additional $50 million available on completion of Agbaou. As of July 31, Endeavour had drawn down the incremental $100 million for a cash balance of over $150 million

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

In order to access the Corporation's MD&A and financial statements directly, please click the following URL:

Neil Woodyer, CEO, stated

"We have responded vigorously to the more challenging gold price environment and put your Company on a much stronger footing to withstand lower long-term gold prices.

Firstly, we have focused on prudent growth, with projects that bring our operating costs down. During the second quarter we completed ramp-up of the Tabakoto mill expansion, which will increase production and lower costs in the second half of the year. We're over 80% complete on our construction of Agbaou, which is on-track to begin production in Q1 of 2014 and is expected to be our lowest cost mine.

Secondly, we are cutting costs at all of our existing operations, including employee reductions in the first six months of 23% at Nzema, 8% at Youga and 25% at Tabakoto. A specialist consulting firm has been appointed to assist in identifying opportunities to decrease working capital at all of our operations. We are also reviewing major longer term changes to our operating cost structure such as increasing owner mining.

Thirdly, we have increased our debt facility to provide greater financial flexibility and ensure we have the resources we need to complete Agbaou.

We expect a stronger second half for 2013, with higher production and lower costs, and we are on-plan to achieve our production and cost guidance for the year. In addition, we anticipate good year-over-year growth in 2014, with further cost reductions. We are targeting all-in sustaining costs, including underground development expense at operating mines, of approximately $1,000 per ounce for the group."

Q2/2013 Operational Results

Tabakoto Gold Mine, Mali

  • Gold production in the second quarter was 27,405 ounces at a cash cost of $946 per ounce produced.  Production was slightly lower than expected as ramp up of the mill expansion was not completed until June.  Improved costs and production levels are expected in H2/2013 as the mill operates at its expanded capacity.  July gold poured was over 15,000 ounces
  • Mill throughput reached a high of 5,000 tpd during the last few weeks of June and averaged 4,220 tpd for the month of July, above nameplate capacity of 4,000 tpd
  • The Segala main decline is progressing well and now extends over 1,004 metres from the portal, with over 589 metres completed in Q2.  Segala underground development ore production is scheduled to begin during Q4/2013 with stoping ore commencing to increase production towards the end of Q2/2014

Nzema Gold Mine, Ghana

  • Gold production of 24,053 ounces at a cash cost of $1,077 per ounce produced
  • Costs continued to be high during Q2 as the mined grade (1.31 g/t) was similar to the mined grade during Q1
  • Processed grades are scheduled to improve during H2/2013

Youga Gold Mine, Burkina Faso

  • Gold production of 23,963 ounces at a cash cost of $661 per ounce produced
  • Youga produced another quarter of strong operational performance and generated a mine cash margin (revenue less royalties and operating costs) of $16 million

Table 1: Q2 2013 Margin Generation

        3 Months Ended June 30/2013   6 Months Ended June 30/2013
        US$ M     In Gold Ozs*   US$ M   In Gold Ozs*  
  Net operating margin from Youga, Nzema & Tabakoto                  
    Gold revenue   101.1   73,004   218.0   144,930  
      Less: Royalties   5.4   3,931   11.7   7,787  
      Less: Cash Costs for ounces sold   65.0   46,916   129.4   86,031  
    Mine cash margin   30.7   22,157   76.9   51,112  
      Less: Corporate G&A (attrib. to operations) 4.0   2,911   7.4   4,915  
    Corporate EBITDA   26.7   19,246   69.5   46,197  
      Less: Sustaining capital   0.7   505   3.7   2,460  
      Less: Near-mine exploration   0.6   433   1.4   931  
    All-in sustaining margin   25.4   18,307   64.4   42,807  

 * Q2/2013 and H1/2013 USD amounts converted to gold ozs at gold prices of $1,385 and $1,504, respectively

Table 2: Q2 2013 Cash Costs by Mine

      Tabakoto Nzema Youga Total  
  Total tonnes mined - Open pit 000t 2,020 2,222 1,827 6,069  
  Total tonnes mined - Underground 000t 242 0 0 242  
  Total ore tonnes - Open pit 000t 155 505 291 951  
  Total ore tonnes - Underground 000t 121 0 0 121  
  Total tonnes milled 000t 265 501 268 1,034  
  Gold sold ozs 26,407 22,729 23,868 73,004  
  Royalties $000s $2,160 $1,582 $1,702 $5,444  
  Mining costs - Open pit $000s 6,060 8,794 6,691 21,545  
  Mining costs - Underground $000s 12,221 0 0 12,221  
  Processing, maintenance, and G&A costs $000s 6,568 15,571 9,086 31,225  
  Total costs $000s $27,009 $25,947 $17,479 $70,435  
  Unit cost analysis            
  Mining costs - Open pit $/t mined $3.00 $3.96 $3.66 $3.55  
  Mining costs - Underground $/t ore $101.00 0 0 $101.00  
  Processing, maintenance, and G&A costs $/t milled $24.78 $31.08 $33.90 $30.20  
  Cash cost per ounce sold (excl royalties) $/oz $941 $1,072 $661 $890  


Table 3: Q2 2013 All-in sustaining cost per ounce

  Gold sold (ozs)       73,004  
            $ Million   $/oz  
  Royalties         5.4   75  
  Cash costs for ounces sold     65.0   890  
  Corporate G&A (attrib. to ops)     4.0   55  
  Sustaining capital       0.7   10  
  Near-mine exploration     0.6   8  
    All-in sustaining cost per ounce sold             $1,038  


Agbaou Gold Mine Construction

  • To date, approximately 83% of the $160 million construction budget has been committed, with US$103 million spent and the project is approximately 81% physically complete
  • Ball mill and SAG mill installation is progressing well and should be completed shortly. Gearboxes have been installed and aligned and SAG and Ball Mill motors have been installed
  • All civil works in the processing plant and mine services areas completed
  • Electrical infrastructure for the 15km 91kV overhead power line is on target; tower installation is advancing well and sub-stations are advancing well
  • The Cyclone Cluster, Gravity Concentrator, and Mill lubrication systems have all been installed
  • All administration buildings have been completed along with the Reagents storage sheds, Heavy Vehicle and Maintenance Workshop sheds
  • The remaining structural steel has arrived on-site and is being erected, including for the gold room and conveyors
  • Mining equipment, including D9 bulldozers, has arrived on site, with additional deliveries expected shortly; preparations for mining commencement are in line with key milestone dates

Table 4: Investments in New Mine Development and Exploration

        3 Months Ended   6 Months Ended  
         June 30/2013    June 30/2013  
        US$ M   US$ M  
  Investments in new mine development and exploration        
    Agbaou construction   $40.4   $69.0  
    Nzema development    5.2   8.0  
    Tabakoto development (incl mill expansion) 10.5   25.9  
    Houndé FS, Kofi, Ouaré, Regional exploration 1.8   9.5  
    Corporate G&A ( new mines)   1.1   2.5  
        $59.0   $114.9  


Table 5: Q2 2013 Financing Activities and Reconciliation of Cash Position

            US$ Million  
Cash, equivalents - Opening Balance (Mar 31, 2013)   $84.9  
  All-in sustaining margin     25.4  
  Proceeds from sale of gold bullion   37.7  
  Proceeds from sale of interest in Namibia Rare Earths   5.3  
  Proceeds from sale of marketable securities   0.7  
  Proceeds from fuel duty recoverable at Tabakoto   1.5  
  Investments in new mine and development   -59.0  
  Change in working capital at Tabakoto   -11.7  
  Other change in working capital   -6.5  
  Corporate tax paid       -10.4  
  Finance costs (e.g. interest)     -1.6  
  Mali humanitarian donation     -0.5  
  Other         -3.5  
Cash, equivalents - Ending Balance (June 30, 2013)   62.2  
  Marketable securities     0.7  
Cash, equivalents and mkt securities (June 30, 2013)   $62.9  


Q2 2013 Adjusted Earnings

Net earnings / (loss) from continuing operations (attributable to Endeavour shareholders) have been adjusted for the impact of impairments, fair value change of certain financial instruments, including the gold hedge liability and Endeavour's warrants that are denominated in Canadian dollars.  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, bullion, and marketable securities.

Table 6: Adjusted Net Earnings Reconciliation for the quarter ended June 30, 2013

    Quarter ended
June 30, 2013
    US$ Million  
  Net loss attributable to shareholders of Endeavour ($196.8)  
    Non-cash impairment charge, net DIT recovery and NCI 212.3  
    Change in unrealized loss / (gain) - gold price protection program (36.7)  
    Change in fair value of CAD currency share purchase warrants (4.0)  
    Loss on marketable securities 5.8  
    Imputed interest on promissory note (0.6)  
    Loss on foreign currency 2.0  
    Loss on gold bullion 5.5  
    Loss on change of ownership 0.6  
    Stock-based payments 0.4  
  Adjusted net loss after tax ($11.6)  
  Weighted average number of outstanding shares 412,827,190  
  Adjusted net loss per share (basic, US$ per share) ($0.03)  


Conference Call Details

Management will host two conference calls to discuss the Q2 results on August 19 and August 20, 2013 as detailed below. Both conference calls 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 using the dial in numbers below. The same dial in numbers will be used for both conference calls.

North American toll-free:  
Australian toll-free:    
+1 201-689-8040
+1 877-407-8133
The conference call can also be accessed through the following link:
To accommodate the North American/European market, the first conference call
will be held and webcast by V-Call on Monday August 19, 2013 at:

8:00 am  
11:00 am  
4:00 pm  
11:00 pm  
1:00 am  
in Vancouver
in Toronto and New York
in London
in Perth
in Sydney (August 20, 2013)
To accommodate the Australian market, the second conference call will
be held and webcast by V-Call on Tuesday August 20, 2013 at:

1:00 pm  
3:00 pm  
10:00 pm 
1:00 am 
6:00 am  
in Perth
in Sydney
in Vancouver (August 19, 2013)
in Toronto and New York
in London

The calls will be archived for later playback on Endeavour's website until August 14, 2014.

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 gold producer delivering growth. Endeavour owns three gold mines producing more than 300,000 ounces per year in Mali, Ghana and Burkina Faso.  Endeavour's annual gold production is forecast to exceed 400,000 ounces per year during 2014, including the start-up of production at the Agbaou Gold Mine in Cote d'Ivoire scheduled for Q1 2014. In addition, a January 2013 PEA shows potential for 160,000 ozs per year from the Houndé Project in Burkina Faso, which is being assessed by a feasibility study during 2013.

Endeavour Mining Corporation is listed on the TSX (symbol EDV) and ASX (symbol EVR), and also trades on the OTCQX (symbol EDVMF).

On behalf of Endeavour Mining Corporation

Neil Woodyer
Chief Executive Officer

Cash cost per ounce and All-in sustaining cost per ounce 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 for further information respecting the risks affecting Endeavour and its business.  


PDF available at:

SOURCE: Endeavour Mining Corporation

For further information:

Marla Gale
Vice President - Investor Relations

+1 604 609 6117

UK/Europe: Bobby Morse

+44 20 7466 5000

Endeavour Mining Corporation
Regatta Office Park
Windward 3, Suite 240, PO Box 1793
West Bay Road, Grand Cayman
KY1-1109, Cayman Islands

Tel: +1 345 769 7250
Fax: +1 345 769 7256

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