Endeavour Mining

Thank you. Good afternoon, everybody, and welcome. Today, I want to talk about, uh, Endeavour, Endeavour Mining. Um, I'm sure that you're all familiar with this, uh, this, this disclaimer, so I won't bother reading it, but there will be a test at the end of the presentation.

Let's look at the overview about Endeavour. What is Endeavour? Endeavour is strategically positioned in West Africa. We've been there since our inception. Uh, we are the world-- in the world sort of top ten of producers. We have five currently operating mines. Uh, this year we'll be doing about one point one, uh, million ounces, uh, of gold.

And we've been in this area a long time. Why? It's highly prospective. It's, um, it-it's been very good to us. We've built mines there over the years. We've got short lead times to, to construction. Uh, it has a lot of favorable factors, uh, in terms of quickly turning an asset into a cash-producing, uh, entity.

It's also been the opportunity for us to, um, to do quite a lot of things. We have sharpened our skills in terms of, of exploration. We have-- I, I said earlier that this is a, a place where you get permitting done very quickly. Uh, our Toukoula mine, for instance, was from discovery to actually bringing it online on-- into production, eight years. That's a key advantage of operating, uh, in this part of the, uh, the world.

It's also, uh, a place that has produced a lot of gold over the last sort of fifteen-odd years, well over seventy million ounces, so it's highly prospective. And today is arguably one of, uh, the most prospective, um... Sorry, it is one of the largest, uh, producers of gold, uh, in the, in the world. So how-- Sorry, what happened there? [inaudible] Yeah. Beg your pardon.

So let's talk a little bit about our value creation, uh, model. Our value creation model, which has helped us hone, uh, our strengths, the first one, exploration, discovery. Uh, we found twenty-two-- over twenty-two million ounces of gold over the last, uh, ten years at twenty-five dollars an ounce. Let's say, if you think about what you can sell that ounce for today, massive upside opportunity in terms of value creation. But not only do we discover it, we're also developing. We are-- we're able to, um, build mines quickly. Uh, we've developed five mines on time, on budget over the last decade. Those mines, because of the high-grade nature, are strongly cash generative.

The cash that we produce in terms of what we do with the capital allocation goes into the virtuous circle of being able to reinvest in our business and, most importantly, creating shareholder returns. I believe for a long time the gold industry has only focused on so-called growth, but not given investors something today. Investors deserve something today as well as something into the, uh, the future. And this model is certainly a model that we're gonna be using to make sure that by the end of this decade, we're gonna be at one and a half million ounces of, uh, of production.

And the strong cash generation has put us into a position where over the last five years, where we've had a k-- a, um, sort of a shareholder return program, we've returned just under two billion dollars to, to shareholders. And from the time that we actually, uh, started that program, that one point nine billion dollars represents almost about sixty percent of the market cap of the business at the time that we started with that program. That cash flow there, I think you can see how strong it has been. The red line is not our unit cost. That is the free cash margin per ounce that we have actually produced. And certainly over the last twelve months, we've seen our free cash flow grow by over sixty percent. H1 of this year, we delivered seven hundred and sixty-one million dollars or about thirteen fifty dollars for each ounce that we produced.

It's put us in a very healthy financial position with regard to our balance sheet. You can see H1 '24, when we were virtually, uh, at the point of, uh, the, the, the big build in, in our capital program for, uh, Toukoula, as well as for the Souventouala biox plant. That was our peak leverage, and over the time, we've brought that back down to today, we're in a net sort of modest, uh, cash position. And it's our objective that through the cycle, we wanna be at a leverage of around about zero point five, uh, peaking perhaps at about just under one. That we think is ideal. That's the way we try and manage our business, and we have the underlying quality in our asset base that allows us to, uh, to be able to do that.

This year, 2026, we're on track, uh, to produce, uh, uh, at our guidance. Uh, we're certainly slightly ahead, uh, at the moment. And on the assumption that we conclude the year and there's no, uh, banana skins in front of us, certainly it'll be the 12th year out of 13 that we have delivered or beaten, uh, our guidance. I think, um, a great tribute to the, uh, the people who work, uh, in the business.

Now, I mentioned before about shareholder returns. This program started in 2021, and, uh, we take a slightly different view to, to shareholder returns. We talk a forward outlook about what we're going to pay. So we provide a sort of a minimum, and that's the dark blue line, a minimum shareholder return, uh, at a given gold price. And then subject to performance, uh, gold price, whatever, we then start looking at supplemental increases over the minimum, which includes both cash dividends as well as, as buybacks.

As I said, $1.9 billion has been returned to shareholders, uh, to date. Uh, for 2006, we're going to the next three-year program, which sees us through the, uh, the Asafu build, and we've guaranteed a billion-dollar return to shareholders. This year was $300 million. In H1, based on our performance and the, uh, the, you know, the, the good cash that we generated, we actually paid out $301 million for H1. So we've actually given already back that which we said we were going to give back. And you can see over the track record of this program, we've given back more, over 85% more than the guaranteed, uh, minimum. And that flows through into these numbers here, as you can see, you know, some very, very strong returns. The cumulative yield of 37% and a total shareholder return since 2021, you can see there, 263%. You know, very much class-leading, indicative of the intrinsic quality that exists in, uh, our asset base.

Let's looking at growth. Clearly gro- growth is important. Historically, Endeavour has, uh, developed its current portfolio from a, uh, a series of, uh, M&A activities and also getting rid of the, the poorer quality, short life, higher cost assets. You can see in this little magic box thing, the pink, uh, circles are those mines that we have sold off. As you move to the right, uh, longer life, and down to the bottom, lower cost. And you can see now the vast majority of our operations are either in that box or actually are going to move even more. Asafu, clearly a very strong performer of being, uh, in the right place, uh, in that, uh, in that portfolio. And over the five years, see how we've improved the ge- geographic diversification, uh, of this business here in, uh, in West Africa.

Looking forward to the, the, uh, the growth that we're talking about, you can see here, starting at this year's sort of production, uh, estimate, how do we get to the 1.5? You can see Asafu is a major contributor to that, but it's not the only contributor. You've also got the Savadao Massawa underground. So this is now beginning a phase for, uh, Endeavour, where we're not just gonna have one underground mine, but we'll probably have a series of projects across the group that we can get in underground, higher grade opportunities, um, much deeper extraction, um, far less, uh, earth moving.

But even beyond those two, there's even more organic growth in the pipeline. Vindaloo Deeps, I'll talk a little bit about later on, and importantly at our Savadao Massawa complex, the Cassara, uh, deposit. And then as part of our initiative of looking broader than, than West Africa, our new ventures looking further afield into places like Kazakhstan as well as, uh, Guyana. So a very, very strong organic growth pipeline. So whilst we're certainly not averse to inorganic, uh, uh, growth or M&A, we are not under the perhaps the same level of pressure that other people are, simply because we've got so much that we can do, uh, on our own site.

Let's talk first of all about, uh, Asafu, our flagship project. It's the largest project that we, um, uh, have-- will be producing. 5 million ton a year. Uh, it's about a billion-dollar, uh, project. At least a 16-year life. A 5 million ounce, uh, resource, of which 4.3 million of that, uh, reports, uh, to... Sorry, 4.4 million of it reports to, uh, reserve. Low cash cost. Um, it's, it's the biggest project that we've built, but it's very much based upon what we've learnt, uh, and the experience that we've gained from our other five projects. So the same project team that we have in-house. We're also gonna use the same EPCM, uh, like a podium to get us there.

But this mine is being built specifically with a view that it's not going to stick at 5 million tons a year. It will grow. The prospectivity in this area is great, and we believe, uh, that, uh, very shortly, once we're up and running, this will quickly grow. Uh, and the mine has been specifically designed to very easily accommodate growth and, you know, I will be very disappointed if in very short term we're not back up to somewhere, say like seven, seven and a half million tons a year coming through. Which will be dependent upon the, the asset base that we will, uh, be exploiting. And the prospectivity around this mine is extremely good, extremely good.

The second project, the Savada-Masawa underground, a key component in helping us, uh, get up towards, uh, aspirational three hundred and fifty, um, uh, thousand ounces. Uh, it- it's-- I'm pleased to, to say that, uh, we have already taken, uh, our first blast, uh, in this project. We're gonna be looking at exploiting a half a million ounce, uh, deposit, uh, here. Um, and very importantly, we'll pro- be providing high grade, uh, fresh, uh, material for our CIL plant, which in fairness for the last few years has been fairly sort of starved of, um, o- of, uh, of feed. So these two, these two projects are, are key to our future, getting up to the one point five.

As far as getting back to Asufu is concerned, you know, we only paid or we, we spent about thirteen million dollars exploring it. Take a billion dollars for the capital cost. So let's be generous, one point one billion dollars, we've created an asset worth well over five billion dollars at four thousand dollars an ounce. It's a five-bagger. It's a, a great value accretion, uh, to, uh, to shareholders. And we will-- We're still on track to declare FID, uh, for this project, uh, by the end of the year.

But it doesn't stop just at the, the brownfields, and the brownfields is very important to us. But you-- I mentioned that over the last decade we've done twenty-two, um, point four million ounces for twenty-five dollars an ounce very consistently. But what is also important, just hidden away at the bottom a little bit in the smaller script, you can see the quality of that, uh, of that, those ounces. High, you know, decent grade material. And I think we-- We're only really focused on that high quality, 'cause it's that high quality that we exploit that actually helps us generate the cash flows that keeps the whole thing, the whole thing going.

Again, rather like our shareholder returns, we're very keen on giving outlook on what we're going to discover, not just what we have discovered. And we have a five-year program, and our five-year program says that we are going to discover between twelve and fifteen million ounces, uh, of gold, uh, in and around, uh, our operations. That's made up partly in, from brownfields, between six and nine million ounces. So effectively what we're saying here is it's our objective to make sure that over this period we will replace those ounces that we have depleted to keep ourselves in a steady state. And then the cream on the cappuccino comes out of our greenfields, you know, wider afield, away from our mine sites and into the, uh, the new venture, uh, territories, uh, there as well. It's an ambitious target. When we-- when my head of exploration came to me and said, "This is what I want to do," I thought it was a bit chunky. But I have to say, after a couple of in-depth reviews with her and her team, I feel very, very comfortable that this is gonna be achieved and actually, uh, surpassed.

Of some of these-- I mentioned before about some of the other assets we've got. The Vindaloo Deeps. This is based on our, uh, Hunday mine. You can see here Vindaloo Deeps is actually on the, the main Hunday, uh, pit. It's gonna come down out from the, uh, the pit. Uh, it's an underground operation. This will be over a, uh, over a million ounces. Uh, we'll be announcing, uh, the maiden reserve by the, uh, the end of the year. But it goes even a little bit further and deeper to the, the, uh, the Vindaloo Deeps southeast as well as, uh, the, the southeast extension as well. But that's outside of the current, uh, mining permit. It will be subject to a new permit that we're busy negotiating, uh, with government at the moment. But high grade, wide ore bodies, very amenable to, uh, to underground, good quality, highly productive, minimal dilution, uh, operation. So a, a very exciting prospect for the future of Hunday.

And here, the, um, one of the most exciting developments I think in the last year that we've had, uh, we've got a, a very, a new, a fresh set of eyes, um, on, on Savadaala mine. The new team came on board. Uh, they've looked at this from a very sort of fundamental mineral systems approach. And from that they said, "Well, we've got all these existing pits. How do they all join up? Why are they there? What's in between?" And on the basis of that, and running these systems through some of our magic software, we've identified an additional twenty-two targets in this area. This is a thir- eleven hundred square kilometer, uh, permit, but, uh, underexplored- Uh, I'm very, very, uh, excited. And Kossara is gonna be a multimillion-ounce deposit. It's on a 10-kilometer strike. It's within 30 kilometers, uh, of the mill. You know, it's a decent grade. Um, we- again, by the end of this year, we'll be talking, uh, about a maiden, uh, resource coming out, uh, from there.

The new ventures, um, you know that our aspiration to grow off our base in West Africa. Why? We've shown that we can explore, discover, exploit, and develop mines. It's time for us to, to continue doing that in West Africa, but to do it, to play away from home as well and be successful. We're looking at the three key particular areas where we believe we can be successful for an immature, uh, explore- exploration area, under, uh, explored, but with a high potential for, you know, proper tier one assets in Kazakhstan, uh, in, in South America, and in the, uh, the Western Tethyan Belt, uh, in Eastern Europe. We've already got three joint ventures. Um, and I would, uh, I'm very comfortable, uh, and very hopeful that over the, the next sort of, uh, three to five years, you know, we're gonna get some very exciting, uh, discoveries coming out from, uh, from these areas.

So in conclusion, why Endeavour? I always say Endeavour is a business that makes money. We just happen to make money by mining gold. I think you've seen that we have a very simple formula. There's nothing sort of fancy. Uh, there's no, um, major financial engineering. It's just good, solid, uh, discovery, execution, and completion, and making sure that we have the right assets that throw the right amount of cash off that we can return to our shareholders and make sure that we are class-leading in terms of, of yields. And also, despite all the work that we've done, w- as you can see on these slides, we're still very much undervalued. And I think that is it. Thank you very much. [audience applauding]

Uh, unfortunately, we're out of time, but if you have questions for Ian and the team, please find them at the conference. And Ian, thank you very much. That was excellent.

Thanks, Ron.