Endeavour Mining : Quarterly Reporting Document

NEWS RELEASE - LSE & TSX: EDV

All amounts in US$

ENDEAVOUR REPORTS Q3-2022 RESULTS

WELL POSITIONED TO ACHIEVE TOP-END PRODUCTION GUIDANCE, WITHIN AISC GUIDANCE

OPERATIONAL AND FINANCIAL HIGHLIGHTS (for continuing operations)

• Q3-2022production of 343koz at an AISC of $960/oz; year-to-date production of 1,045koz at an AISC of $920/oz
• Group is well positioned to achieve top-end of FY-2022 production guidance of 1,315-1,400koz at an AISC within the guided $880-930/oz range
• Net Earnings of $58m (or $0.23/sh) for Q3-2022 and $190m (or $0.77/sh) year-to-date.
• Operating Cash Flow before changes in WC of $195m (or $0.79/sh) for Q3-2022 and $828m (or $3.34/sh) year-to-date
• Strong financial position with $833m cash position at quarter-end, well positioned to reimburse the $330m convertible bond, due Feb 2023, in cash to limit shareholder dilution, in addition to $500m in available sources of financing

ROBUST SHAREHOLDER RETURNS

• H1-2022dividend of $100m paid in Q3-2022, totalling $170m paid year-to-date
• Share buyback programme continued with $37m worth of shares repurchased in Q3-2022, totalling $75m year-to-date

ORGANIC GROWTH

• Sabodala-Massawaexpansion on track; 46% of the capital committed with pricing inline with expectations and construction of the Lafigué greenfield project launched with 12% of the capital committed
• Strong exploration effort with $23m spent in Q3-2022, totalling $68m year to date; maiden resource for Tanda-Iguela greenfield discovery expected to be published in Q4-2022

London, 10 November 2022 - 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 Q3-2022 and year to date, with highlights provided in Table 1 below.

Table 1: Highlights for Continuing Operations1
	THREE MONTHS ENDED	NINE MONTHS ENDED
All amounts in US$ million unless otherwise specified	30 September	30 June	30 September	30 September	30 September	YTD-2022 vs.
2022	2022	2021	2022	2021	YTD-2021
OPERATING DATA
Gold Production, koz	343	345	362	1,045	1,058	(1)%
All-in Sustaining Cost2, $/oz	960	954	885	920	854	+8%
Realised Gold Price, $/oz	1,679	1,832	1,768	1,810	1,776	+2%
CASH FLOW
Operating Cash Flow before Changes in WC	195	253	317	828	816	+1%
Operating Cash Flow before Changes in WC2, $/sh	0.79	1.02	1.27	3.34	3.44	(3)%
Operating Cash Flow	154	253	309	706	797	(11)%
Operating Cash Flow2, $/sh	0.62	1.02	1.24	2.85	3.37	(15)%
PROFITABILITY
Net Earnings/(Loss) Attributable to Shareholders	58	189	122	190	332	(43)%
Net Earnings/(Loss), $/sh	0.23	0.76	0.49	0.77	1.40	(45)%
Adj. Net Earnings Attributable to Shareholders2	37	111	168	281	449	(37)%
Adj. Net Earnings2, $/sh	0.15	0.45	0.67	1.13	1.90	(41)%
EBITDA2	302	417	339	937	985	(5)%
Adj. EBITDA2	256	329	370	982	1,090	(10)%
SHAREHOLDER RETURNS
Shareholder dividends paid	100	-	70	170	130	+31%
Share buybacks	37	7	35	75	94	(20)%
ORGANIC GROWTH	(30)	(34)	(11)	(72)	(51)	+41%
Growth capital spend
FINANCIAL POSITION HIGHLIGHTS
Cash	833	1,097	760	833	760	+10%
Principal debt	(830)	(880)	(830)	(830)	(830)	-%
Net Cash, (Net Debt)2	3	217	(70)	3	(70)	(104)%

1From Continuing Operations excludes the Karma mine which was divested on 10 March 2022 and the Agbaou mine which was divested on 1 March 2021. 2This is a non-GAAP measure. Refer to the non-GAAP measure section in this press release and in the Management Report.

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Management will host a conference call and webcast today, Thursday 10 November, 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.

Sebastien de Montessus, President and CEO, commented: "Our strong operating performance for the first nine months of the year positions us well to deliver full year production at the top end of our guided range and costs within the guided range. This will mark our 10th consecutive year of achieving or exceeding our guidance; a record that we are extremely proud of, and a strong reflection of the resilience of our business.

As we enter our next growth phase, our high-margin production, sustained free cash flow generation, and strong financial position leave us well placed to continue to deliver strong shareholder returns. This year we have already increased our minimum dividend commitment by $50 million to $200 million and we have completed an additional $75 million in share buybacks. Moreover, in order to limit shareholder dilution, we have upstreamed sufficient cash in order to provide the financial flexibility to reimburse our $330 million convertible bond due Q1-2023 in cash.

Our growth projects are progressing well with the expansion of our flagship Sabodala-Massawa mine on schedule and on budget as work starts to ramp up. Furthermore, we recently launched the construction of our next cornerstone asset, the Lafigué project on the Fetekro property, where early works are gathering pace. Our growth projects will increase gold production by approximately 30% from 2024 and further enhance our geographic diversification, whilst solidifying our position as a leading high-margin and low cost producer.

Over recent years, our exploration programme has discovered the Lafigué project for a modest investment of $31 million at an industry leading discovery cost of $12/oz, and it continues to deliver new low-cost ounces, notably through our greenfield success at the Tanda-Iguela property in Côte d'Ivoire, where we expect to publish a maiden resource in the coming weeks. In addition, we are enjoying significant near mine exploration success at several other cornerstone assets, with resource additions expected by year-end. As such, we are pleased to be on track to achieve our previously disclosed target of discovering 15-20 million ounces of Indicated resources over the 2021 to 2025 timeframe.

In summary, we are very pleased with the progress made so far this year and with the wet season over, we expect the final quarter to be strong as we remain focused on continuing to deliver strong operating results which underpin our ability to fund our growth and shareholder return programme.

UPCOMING CATALYSTS

The key upcoming expected catalysts are summarised in the table below.

		Table 2: Key Upcoming Catalysts
TIMING	CATALYST
Q4-2022	Mana	Wona underground first stope production
Q4-2022	Tanda-Iguela	Maiden resource
Q4-2022	Ity	Resource update
Q4-2022	Sabodala-Massawa	Expansion project progress update
Q1-2023	Shareholder Returns	Payment of H2-2022 dividend
Q1-2023	Exploration	Year-end resource update following exploration success

OPERATING SUMMARY

• As published in the press release dated 28 October 2022, regrettably, a fatal accident occurred at the Ity mine in Côte d'Ivoire on 27 October 2022. A contractor passed away as a result of injuries sustained in an incident that occurred during blasting activities. Endeavour is conducting a comprehensive internal investigation into the incident and is working closely with the relevant local authorities.
• While the Group's Lost Time Injury Frequency Rate ("LTIFR") for continuing operations improved from 0.13 to 0.07 for the trailing twelve months ending 30 September 2022, compared to equivalent period ending 30 June 2022, Endeavour will continue to prioritise safety in accordance with its Zero-harm target.
• Strong Q3-2022 performance, despite the seasonal impact of the wet season, as production and all-in sustaining cost ("AISC") remained stable over Q2-2022.
• • Q3-2022production from continuing operations amounted to 343koz, stable over Q2-2022 as the scheduled lower production at Houndé and Mana was offset by higher production at Ity, Sabodala-Massawa, Wahgnion and Boungou.
  • Q3-2022AISC amounted to $960 per ounce sold, stable over Q2-2022 due to a higher volume of gold produced compared to gold sold and cost increases at Boungou and Mana, which were offset by cost decreases at Houndé and Ity.
• The Group is well positioned to achieve the top-end of FY-2022 group production guidance of 1,315-1,400koz at an AISC guidance of $880-930 per ounce for continuing operations.

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• YTD-2022production amounted to 1,045koz, roughly in-line with the prior year, due to stronger production from Houndé (due to improved mining flexibility and mill throughput with the addition of the Kari mining areas), Ity (due to improved processed grades and recoveries with the addition of increased ore from Le Plaque), and Sabodala-Massawa (due to a full nine months of consolidated production following its acquisition in February 2021) while Mana remained stable (where throughput was inline with the prior year, despite the transition of the Wona deposit from an open pit to an underground operation). This offset lower production from Boungou (due to less high grade ore availability in the East pit coupled with supply chain delays) and Wahgnion (due to mining lower grade zones of the Nogbele and Fourkoura pits).
• YTD-2022AISC from continuing operations amounted to $920 per ounce, within the full year guided $880-930 per ounce range, albeit an increase of $66 per ounce over YTD-2021 with higher AISC at Boungou, Wahgnion and Sabodala- Massawa, which have been partially offset by lower AISC at Houndé and Ity while Mana was stable.

Table 3: Group Production and FY-2022 Guidance

	THREE MONTHS ENDED	NINE MONTHS ENDED
	30 September	30 June	30 September	30 September	30 September	2022 FULL-YEAR
All amounts in koz, on a 100% basis	2022	2022	2021	2022	2021	GUIDANCE
Boungou	29	27	41	90	139	130	-	140
Houndé	72	87	70	232	216	260	-	275
Ity	81	77	61	230	212	255	-	270
Mana	42	55	49	149	151	170	-	190
Sabodala-Massawa1	86	73	106	256	241	360	-	375
Wahgnion1	32	27	34	88	100	140	-	150
PRODUCTION FROM CONTINUING	343	345	362	1,045	1,058	1,315	-	1,400
OPERATIONS
Karma2	-	-	21	10	67
Agbaou3	-	-	-	-	13
GROUP PRODUCTION	343	345	382	1,055	1,138

1Included for the post acquisition period commencing 10 February 2021. 2Divested on 10 March 2022. 3Divested on 1 March 2021.

Table 4: Group All-In Sustaining Costs and FY-2022 Guidance

	THREE MONTHS ENDED	NINE MONTHS ENDED
	30 September	30 June	30 September	30 September	30 September	2022 FULL-YEAR
All amounts in US$/oz	2022	2022	2021	2022	2021	GUIDANCE
Boungou	1,219	1,062	800	1,051	795	900	-	1,000
Houndé	716	807	921	767	833	875	-	925
Ity	773	895	915	799	830	850	-	900
Mana	1,098	905	1,029	993	996	1,000	-	1,100
Sabodala-Massawa1	779	779	655	703	667	675	-	725
Wahgnion1	1,647	1,788	1,097	1,590	964	1,050	-	1,150
Corporate G&A	37	20	24	32	28		30
AISC FROM CONTINUING OPERATIONS	960	954	885	920	854	880	-	930
Karma2	-	-	1,256	1,504	1,162
Agbaou3	-	-	-	-	1,131
GROUP AISC	960	954	904	925	875

1Included for the post acquisition period commencing 10 February 2021. 2Divested on 10 March 2022. 3Divested on 1 March 2021.

• The Group sustaining capital expenditure for FY-2022 is expected to be below the guidance of $169.0 million, of which $97.6 million has been incurred year to date and $28.8 million was incurred in Q3-2022. Mining activities prioritised non-sustainingpre-stripping activities to accelerate the opening of new deposits and mining areas, in order to provide more mining flexibility to sustain a better than forecasted production profile in Q4-2022 and into 2023, in addition to improvements in fleet maintenance condition monitoring which reduced mining equipment capital requirements. Further information by mine is provided in the section below.
• The Group non-sustaining capital expenditure for FY-2022 is expected to be above the guidance of $204.0 million, with $174.6 million incurred year to date and $79.5 million incurred in Q3-2022, due to higher non-sustaining capital at Boungou, Houndé, Mana, Sabodala-Massawa and Wahgnion mainly due to accelerated pre-stripping and mining infrastructure activities at certain pits this year, which will be slightly offset by lower non-sustaining capital at Ity due to less pre-stripping

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requirements and the timing of payments related to the Recyanidation project. Further information by mine is provided in the section below.

• The Group growth capital expenditure outlook for FY-2022 has been updated following the launch of construction at the Lafigué development project. The growth capital expenditure guidance for FY-2022 is $181.0 million, of which $71.9 million has been incurred year to date. During Q3-2022, $29.7 million was incurred, mainly related to the Sabodala-Massawa expansion project and the Lafigué project Definitive Feasibility Study ("DFS") and its associated establishment works.

SHAREHOLDER RETURNS PROGRAMME

• Endeavour paid its H1-2022 dividend of $100.0 million, or $0.40 per share, on 28 September 2022, to shareholders of record on 2 September 2022. The H1-2022 dividend represents a 43% increase over the H1-2021 dividend.
• In line with its strong commitment to shareholder returns, as previously disclosed, Endeavour increased its dividend commitment for FY-2022 by $50.0 million to $200.0 million, which is to be supplemented with additional dividends and/or share buybacks provided the gold price remains above $1,500 per ounce and the Group's leverage remains below 0.5x Net Debt/adjusted EBITDA.
• A total of $74.5 million or 3.4 million shares were repurchased in the first nine months of the year, of which $36.7 million or 1.7 million shares were repurchased in Q3-2022. Since the commencement of the buyback programme on 9 April 2021, a total of $212.7 million, or 9.4 million shares have been repurchased.
• As shown in the table below, Endeavour will have returned more than $613.0 million to shareholders in the form of dividends and buybacks since its shareholder returns programme began in late 2020, inclusive of the H2-2022 dividend commitment of $100.0 million, which represents approximately $278.0 million more than its minimum commitment for the period.

	Table 5: Actual Shareholder Returns vs. Minimum Commitment
		MINIMUM	ACTUAL SHAREHOLDER RETURNS	SUPPLEMENTAL
		DIVIDEND	DIVIDENDS	BUYBACKS	TOTAL	SHAREHOLDER
All amounts in US$ million		COMMITMENT	DECLARED	COMPLETED	RETURNS	RETURNS
FY-2020		60	60	-	60	-
FY-2021		125	140	138	278	+153
FY-2022		150	200	75	275	+125
H1-2022		75	100	38	138	+63
H2-20221		75	100	37	137	+62
TOTAL		335	400	213	613	+278

• $100 million dividend for H2-2022 represents the committed amount that is expected to be paid to shareholders in Q1-2023, while the $37 million of buybacks represents amount completed in Q3-2022.

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CASH FLOW AND LIQUIDITY SUMMARY

The table below presents the cash flow and net cash position for Endeavour for the three month periods ended 30 September 2022, 30 June 2022, and 30 September 2021 and the nine month periods ending 30 September 2022 and 30 September 2021, with accompanying explanations below.

	Table 6: Cash Flow and Net Cash
			THREE MONTHS ENDED	NINE MONTHS ENDED
			30	30 June	30	30	30
			September	September	September	September
			2022
All amounts in US$ million unless otherwise specified			2022	2021	2022	2021
Net cash from/(used in), as per cash flow statement:
Operating cash flows before changes in working capital from	195	253	317	828	816
continuing operations
Changes in working capital			(41)	1	(8)	(122)	(18)
Cash generated from discontinued operations			-	-	3	5	13
Cash generated from operating activities	[1]	154	253	312	711	810
Cash used in investing activities	[2]	(111)	(145)	(137)	(349)	(379)
Cash used in financing activities	[3]	(256)	(26)	(233)	(332)	(360)
Effect of exchange rate changes on cash			(52)	(33)	(15)	(104)	(25)
(DECREASE)/INCREASE IN CASH			(264)	50	(73)	(74)	46
Cash position at beginning of period			1,097	1,047	833	906	715
CASH POSITION AT END OF PERIOD		[4]	833	1,097	760	833	760
Principal amount of Senior Notes			(500)	(500)	(500)	(500)	(500)
Principal amount of Convertible Notes			(330)	(330)	(330)	(330)	(330)
Drawn portion of Revolving Credit Facility			-	(50)	-	-	-
Drawn portion of Corporate Loan Facility			-	-	-	-	-
NET CASH/(NET DEBT)		[5]	3	217	(70)	3	(70)
Net cash, (Net debt) / Adjusted EBITDA (LTM) ratio1	[5]	0.00 x	0.14 x	(0.05)x	0.00 x	(0.05)x

1Net debt, Adjusted EBITDA, and cash flow per share are Non-GAAP measures. Refer to the non-GAAP measure section in this press release and in the Management Report.

NOTES:

1. Operating cash flows decreased by $99.5 million from $253.2 million (or $1.02 per share) in Q2-2022 to $153.7 million (or $0.62 per share) in Q3-2022 largely due to a decrease in the realised gold price, an increase in the working capital outflow, a slight decrease in gold sales and higher income taxes paid.
   Operating cash flows decreased by $99.1 million from $810.3 million (or $3.42 per share) in YTD-2021 to $711.2 million (or $2.87 per share) in YTD-2022 largely due to higher working capital outflows and higher operating costs compared to the prior period.
   Notable variances are summarised below:
2. • Working capital was an outflow of $41.4 million in Q3-2022, an increase of $42.1 million over Q2-2022, largely due to an increase in outflows from prepayments and trade and other payables, partially offset by a decrease in outflows from inventories. Trade and other payables were an outflow of $29.8 million in Q3-2022 and primarily related to social development fund and royalty payments at Ity, Houndé and Mana as well as the timing of supplier payments. Prepaid expenses and other were an outflow of $12.7 million in Q3-2022 and primarily related to security prepayments at Mana and Boungou. Trade and other receivables were an outflow of $8.1 million for Q3-2022, mainly driven by quarterly movements in VAT and other receivables across the portfolio. Inventories were an inflow of $9.2 million in Q3-2022 related to a decrease in stockpiles at Mana, Boungou, Wahgnion and Sabodala-Massawa used to supplement process feed.
     Working capital was an outflow of $121.6 million in YTD-2022, an increase of $103.5 million over YTD-2021. Trade and other payables was an outflow of $43.1 million in YTD-2022 compared to an outflow of $77.2 million in YTD-2021 largely due to the prior period including payments related to the Teranga acquisition. Inventories were an outflow of $41.2 million in YTD-2022 compared to an inflow of $72.2 million in YTD-2021, mainly due to an increase in short-term stockpiles at Houndé, Ity and Wahgnion and an increase in consumables, partially offset by a decrease in gold-in circuit across the Group. Prepaid expenses and other was an outflow of $14.9 million in YTD-2022 compared to an outflow of $7.6 million in YTD-2021 mainly related to advance payments made in YTD-2022 compared to the prior period. Trade and other receivables was an outflow of $22.4 million in YTD-2022 compared to an outflow of $5.5 million in YTD-2021, mainly due to an increase in trade receivables at Sabodala-Massawa as VAT receivable increased following the expiry of the mines' VAT exemption status in May 2022, as well as increased advanced royalties at Houndé and Boungou, which was slightly offset by a decrease in receivables at Houndé and Boungou as a result of VAT received during YTD-2022.

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