OREANDA-NEWS. Endeavour Mining is pleased to announce its financial and operating results for the quarter ended June 30, 2016, with highlights provided in the table below.

Table  1: Key Operational and Financial Highlights

(in US$) Quarter ended,   Six months ended,
Q2-2016 Q1-2016 Q2-2015   June 30, 2016 June 30, 2015 Variance
Gold Production, oz* 138,487 123,388 112,924   261,875 218,800 +20%
Realized Gold Price, $/oz 1,257 1,192 1,193   1,225 1,206 +2%
AISC, $/oz 901 889 902   896 931 (5%)
All-in Sustaining Margin, $/oz 356 303 291   330 275 +20%
All-in Sustaining Margin, $m 45 37 32   82 59 +39%
Free Cash Flow, $m 
(befORE WC, tax & financing costs, Hound? and Karma)		 29 30 29   59 47 +26%
Net Debt At Period End, $m** (21) 136 242   (21) 242 n.a.

NB: All amounts exclude discontinued Youga operation. *Includes Karma's pre-commercial production. Karma's revenue, costs, and operating cash flow is netted against its capital costs for its pre-commercial production period. **End of June 2016 amount presented is pro-forma inclusive of Bought Deal financing which closed on July 11, 2016. Before Bought Deal proceeds, the net debt amounted to $82 million.

S?bastien de Montessus, President & CEO, stated: "Our results for the first half of the year demonstrate the benefits of a diverse portfolio of mines, where impressive out-performance at the Agbaou and Ity mines compensated for lower production at Nzema and Tabakoto. We expect Nzema and Tabakoto performance to improve in H2, as we continue to deliver against our group-level objectives, remaining on-track to meet all our guidance metrics for 2016.

Following the La Mancha transaction in November, we have steadily deleveraged our balance sheet and are now in a strong position to execute our growth strategy with nearly $440 million in liquidity and financing sources to fund our developments.  

Moving forward, we will continue to build on our track record of being efficient operators and project builders in West Africa. In addition, we will also focus on increasing investment in exploration across our portfolio to extend mine life and unlock further value for shareholders, while implementing a new management culture that is focused on operational excellence, increased transparency, improved governance and engagement with stakeholders."

Gold production and AISC on-track to meet initial full-year guidance  

  • Q2-2016 production from continuing operations (excluding Youga) increased by 6% over the previous quarter, with continued strong performance from Agbaou and Ity compensating for lower purchased ore production at Nzema.
  • Endeavour is on-track to meet its initial full-year guidance as production is expected to increase in H2-2016 with stronger performance expected from the Tabakoto and Nzema mines.
  • Endeavour's AISC for its continuing operations averaged $896/oz during H1-2016, remaining in-line with guidance while improvements are expected at both Nzema and Tabakoto in H2-2016.

Table  2: Gold Production by mine, koz

  Quarter ended,   Six months ended June 30,
(All amounts in koz, on a 100% basis) Q2-2016 Q1-2016 Q2-2015   2016 2015 Variance
Agbaou 46 43 41   89 86 +4%
Tabakoto 39 39 40   78 73 +7%
Nzema 20 20 33   40 60 (34%)
Ity 21 22 n.a.   43 n.a. n.a.
Subtotal 126 123 113   250 219 +14%
Youga (discountinued operation) 0 8 18   8 36 n.a.
Karma (pre-commerical production) 12 - -   12 - n.a.
Total 138 132 131   270 255 +6%


Table 3: Group All-In Sustaining Costs, US$/oz

  Quarter ended,   Six months ended June 30,
(All amounts in US$/oz, on a 100% basis) Q2-2016 Q1-2016 Q2-2015   2016 2015 Variance 
Agbaou 525 525 619   525 597 (12%)
Tabakoto 1,061 1,071 990   1,066 1,055 +1%
Nzema 1,266 1,158 953   1,212 1,062 +14%
Ity 775 710 n.a.   742 n.a. n.a.
Mine-level AISC 845 837 846   842 877 (4%)
  Corporate  G&A 44 40 40   42 39 +8%
  Sustaining exploration 12 12 16   12 16 (16%)
Group AISC/oz 901 889 902   896 931 (4%)

Agbaou Mine

H1-2016 Insights:

  • Agbaou continued its strong performance in Q2-2016, with an increase in tonnes milled which contributed to overall higher production of gold. The optimized mill throughput is currently running significantly above nameplate capacity.
  • AISC for Q2-2016 was in line with the prior quarter at $525 per ounce. This reflects the benefit of a full quarter of savings associated with the revision of rates under the mining contract, offset slightly by the scheduled maintenance at the processing facility.
  • The secondary crusher was commissioned in July on-time and under-budget, providing improved processing flexibility.

H2-2016 Outlook

  • Agbaou is expected to benefit in the second half of 2016 from continued higher mill throughput and higher expected recoveries, and the introduction of higher grade transitional ore in Q4-2016.
  • In light of the strong performance in H1-2016 and the positive outlook on the remainder of the year, Agbaou's FY2016 production guidance has been increased from 165-175koz to 180-195koz while its AISC guidance has been lowered from $650-700/oz to $550-600/oz.

Exploration Activities

  • In 2016, exploration is focused on the North pit and South pit extensions, the Agbaou South target, and on generating targets beyond the current resource boundaries.
  • Following resolution of ground reclamation and compensation issues with local communities, drilling based on previous geophysics surveys and soil geochemistry results commenced in April 2016.
  • At the end of June 2016, over 8,000 meters of Reverse Circulation (RC) and Diamond Drilling (DD) had already been drilled (representing approximately 20% of the initial program).
  • Initial results suggest the extension of mineralized zones, which will be further investigated.
  • Additional studies include an infill geochemical program, a resistivity survey and a magnetic survey.

Tabakoto Mine

H1-2016 Insights:

  • Production remained stable in Q2-2016 compared to the previous quarter -- despite an 8 day general strike against the State -- due to good performance at both Segala and Kofi, which positively impacted grade milled.
  • AISC decreased slightly in Q2-2016 compared to the previous quarter, however remained above the guidance range, as mining at Tabakoto underground was restricted to low grade areas due to slow development.

H2-2016 Outlook

  • Production and AISC are expected to improve in the second half of 2016 due to anticipated higher levels of production at Tabakoto underground and Kofi. Segala should continue to perform in-line with expectations. The focus remains on continued optimization of the operation by increasing equipment availability and improving underground mining efficiency, and reducing the number of expatriates.
  • Tabakoto's FY2016 production guidance has remained unchanged at 155-175koz, as the mine is currently producing in-line with the low end of its guidance with further improvement expected in the second half of the year. AISC guidance has been increased from $920-970/oz to $970-1,050/oz to take into account the issues experienced in H1-2016.

Exploration Activities

  • An exploration program was launched in early 2016 to extend the mine lives of the current underground mines, to test the potential extension of the Kofi B deposit and to generate new open pit targets on the Kofi trend, which lies immediately north of Randgold's Loulo property.
  • At Kofi B North (an open-pit target) a 244 hole RC drilling program and a 1,311 hole auger drilling program have been completed since the beginning of the year with drill results currently being received and analyzed.
  • Near the Tabakoto underground mine, a shallow 334 hole RC program was completed on the Fougala and Kreko open-pit targets, with drill results currently being analyzed. Results to date suggest that the Fougala program confirmed two mineralized trends that will be evaluated in the second half of 2016 and the Kreko program successfully targeted a structural intercept model below laterite.