Endeavour Mining reports 2023 guidance on track

Endeavour Mining has announced its Q2-2023 results, reporting that its 2023 guidance is on track, with US$100 million dividend declared for H1-2023, and growth projects are on budget and on schedule.

Sebastien de Montessus, President and CEO, said, “We are pleased with our achievements over the first half of the year. We have continued to deliver against our strategic objectives, leaving us well positioned to unlock near-term value for all of our stakeholders.

“In line with our strategy of actively managing our portfolio to focus on higher quality assets, we closed the sale of our non-core Boungou and Wahgnion mines during the period. This focus on quality will be further enhanced by the brownfield expansion of Sabodala-Massawa and the Lafigué greenfield project, both of which remain on budget and on track to be commissioned next year, and will deliver significant growth.

“Alongside this year’s investments in our organic pipeline, we are pleased to continue to deliver attractive shareholder returns and have declared a H1-2023 dividend of US$100 million, which on an annualized basis represents US$25 million more than the minimum dividend commitment for the year. Looking ahead, our goal is to increase our shareholder returns programme further once our organic growth projects are complete, to ensure that our efforts to unlock growth benefit all stakeholders.

“On the operational front, we are on track to meet our full year guidance for the eleventh consecutive year with our performance expected to increase into the second half of the year in light of the efforts over the past six months.

“Our relentless focus on cost and efficiency improvements has continued to identify optimization opportunities across the portfolio leading to our decision to move forward with the 37 MWp PV solar facility at our Sabodala-Massawa mine, thereby redeploying a portion of the proceeds obtained from the sale of our non-core mines. This will significantly lower fuel consumption and power costs while reducing greenhouse gas emissions once commissioned in early 2025.

“Looking further ahead, our exploration programme continues to provide a strong platform for organic growth. Further drilling at last year’s Tanda-Iguela discovery in Côte d’Ivoire has exceeded expectations. With over 95,000 meters already drilling during the first half of the year, we have decided to increase the full year drill programme to 180,000 meters and remain on track to publish a resource update later this year.

“I’d like to thank our team for their continued strong contributions over the first half of the year and look forward to progressing our strategy for the remainder of 2023.”

A total sustaining capital expenditure of US$49.3 million was incurred in H1-2023, of which US$21.6 million has been incurred in Q2-2023, primarily related to waste development and mining equipment upgrades at Houndé and Sabodala-Massawa.

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The FY-2023 sustaining capital expenditure outlook for continuing operations has been reduced from US$135 million to US$110 million due to a US$15 million reduction at Ity due to lower required plant maintenance, and a US$10 million reduction at Mana as the ramp up of the new mining contractor at Wona underground is progressing slower than expected.

A total non-sustaining capital expenditure of US$143.3 million was incurred in H1-2023, of which, US$60.6 million has been incurred in Q2-2023, primarily related to pre-stripping activity at Houndé and Sabodala-Massawa, underground development at Mana and TSF construction, embankment raises and the Recyn project at Ity.

The FY-2023 non-sustaining capital expenditure outlook for continuing operations has been increased from US$160 million to US$210 million due to a US$40 million increase at Ity as its sustained strong performance and above nameplate throughput requires bringing forward and accelerating the TSF embankment raise and the construction of a new TSF.

In addition, to further optimize Ity’s processing plant and support an increase in mill-feed, the construction of the mineral sizer has been launched. The increase in non-sustaining capital spend also includes US$10 million for the construction of the solar power plant at Sabodala-Massawa, which was recently launched and is expected to be commissioned in early 2025.

A total growth capital expenditure of US$176.3 million was incurred as of H1-2023, of which US$104.1 million has been incurred in Q2-2023, with US$37.6 million incurred at Sabodala-Massawa, US$53.8 million incurred at Lafigué, US$7.9 million incurred for exploration permits and US$4.8 million incurred at the Kalana project. Growth capital expenditure outlook for FY-2023 remains unchanged at US$400.0 million.

The Group reported strong safety performance, with a LTIFR from continuing operations of 0.06 for the trailing twelve months ending 30 June 2023.

Following the sale of the Boungou and Wahgnion mines, as announced on the 30 June 2023 and detailed below in the Asset Divestment of Non-Core Boungou and Wahgnion Mines section, Endeavour updated its 2023 full year production and all in sustaining cost (AISC) guidance to account for the removal of guided production from the Boungou mine of 115 – 125koz at an AISC of US$985 – 1,075/oz and from the Wahgnion mine of 150 – 165koz at an AISC of US$1,250 – 1,350/oz. As a result, the full year 2023 production guidance for continuing operations decreased from 1,325 – 1,425koz to 1,060 – 1,135koz, while AISC guidance from continuing operations improved by US$45/oz to US$895 – 950/oz.

The Group remains on track to achieve its updated FY-2023 production guidance from continuing operations, with performance weighted towards H2-2023 as previously guided.

Q2-2023 production from continuing operations amounted to 268koz, an increase of 24koz or 10% over Q1-2023 due to increased production from Houndé and Sabodala-Massawa as higher-grade ore was mined and processed, which was partially offset by a decrease in production at Ity, due to slightly lower grade, throughput and recovery rates, and at Mana due to the increased focus on underground development.

Q2-2023 AISC from continuing operations amounted to US$1,000/oz, an increase of US$45/oz or 5% over Q1-2023 due to higher costs at Ity due to the increased use of self-generated power, and at Mana due to the higher open pit strip ratio and an increased focus on underground development, which was partially offset by lower costs at Houndé and Sabodala-Massawa.

H1-2023 production from continuing operations amounted to 511koz, a decrease of 75koz or 13% over H1-2022 due to decreased production at Houndé and Sabodala-Massawa as an increased focus on stripping activity resulted in lower grade ore being processed during the period, and at Mana due to an increased focus on underground development with supplemental ore being sourced from the lower grade Maoula open pit, which was partly offset by increased production at Ity due to improved throughput and recoveries. H1-2023 AISC from continuing operations amounted to US$978/oz, an increase of US$150/oz or 18% over H1-2022 due to higher AISC as a result of the lower production at Houndé, Mana and Sabodala-Massawa, which was partly offset by improved costs at Ity.