Endeavour Mining increases and extends debt facility to strengthen financial flexibility and is on track to significantly lower operating costs
Published : July 24, 2013
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Endeavour Mining increases and extends debt facility to strengthen financial flexibility and is on track to significantly lower operating costs

VANCOUVER, July 24, 2013 /CNW/ - Endeavour Mining Corporation ("Endeavour" or the "Corporation") (TSX:EDV, ASX:EVR, OTCQX:EDVMF) announces it has implemented a number of steps to significantly lower its operating cost profile and to focus on EBITDA and cash flow generation.  Endeavour has also enhanced its financial flexibility by increasing its revolving corporate loan facility from $200 million to $350 million, with the term extended to five years.

(All dollar amount in U.S. dollars unless otherwise indicated)

Highlights - Q2/2013 results and cost savings

  • Based on operating results to June 30, 2013 Endeavour reiterates its full year 2013 production and cost guidance of between 310,000 and 345,000 ounces at a cash cost (excluding royalties) of between $840 to $880 per ounce
    • During the six month period to June 30, 2013, Endeavour produced 149,075 ounces, and the second half of 2013 is forecast to produce between 165,000 and 180,000 ounces as a result of the recent completion of the mill expansion at Tabakoto and the scheduled processed grade improvement at Nzema
    • Cash cost per ounce produced in Q1/2013 was $899.  During Q2/2013, cash costs are expected to be in the same range as Q1 and during the second half of 2013 are forecast to be between $790 and $820 per ounce for an approximate 10% unit cost reduction during the year
  • Endeavour's 2013 capital programs remain on time and on budget, with the Tabakoto mill expansion complete and now operating in excess of design capacity and Agbaou remaining on schedule for production in Q1/2014
  • A comprehensive review of each operation's long-term plans with the goal of targeting significant and sustainable cost savings is on-going. These targets will be achieved by:
    • Continued cost savings: Endeavour has reduced corporate overhead by 25% and exploration has been restricted to programs with potential to enhance the cash flow from its existing mines.  Other optimizations include significant reductions in ex-pat and casual labour work force at the mine sites
    • Reduced use of contractors and sub-contractors at all mines
    • Successful conversion to owner-mining for the open pit at the Tabakoto mine has achieved the planned cost savings.  Additional opportunities to convert contractor-mining into owner-mining in other areas of its operations are now being evaluated
    • Working capital reductions:  Endeavour is actively reducing working capital levels through supplier renegotiations; implementing group purchasing, inventory management and consignment stocks; and the run-down of non-essential stockpiles


Neil Woodyer, CEO, stated

"We are very pleased with the strong support for our operations and development projects which we have received from five of the top global mining banks; UniCredit Bank AG, BNP Paribas, ING Bank NV, Société Générale and Deutsche Bank AG.  Even in these volatile gold price and challenging  capital markets we will be able to finance our current construction plans and also take advantage of additional capital projects to improve the cash generation and value of our current operations.

In parallel we have a sharp focus on improving the generation of cash flow and EBITDA from our current three mines.  Agbaou, with its access to grid power and free-dig ore, is positioned to become a strong cash flow generating operation for us

The expansion of Tabakoto, the completion of Agbaou, our cost reduction programs and increased owner mining will help us achieve our 2014 planning targets which include (A) producing over 400,000 ounces, (B) cash costs in the range of $800 per ounce,  and (C) all-in sustaining costs - including underground mine development of operating mines - in the range of $1,000 per ounce."


2013 Gold Production and Cash Cost Outlook

Mine   Q1/2013
3 months
Actual
Q2/2013
3 months
Actual
H1/2013
6 months
Actual
H2/2013
6 months
Forecast
2013
12 month
Forecast
Tabakoto ozs 28,159 27,405 55,564 70-75,000 126-131,000
Nzema ozs 22,456 24,053 46,509 55-60,000 102-107,000
Youga ozs 23,039 23,963 47,002 40-45,000 87-92,000
Total
Production
ozs 73,654 75,421 149,075 165-180,000 315-330,000
Cash cost per
ounce
$/oz Actual
$899
Forecast
Similar to Q1
  Forecast
$790-820
Forecast
$840-880

  • The approximate 15% increase in gold production in the second half of 2013, as compared to the first half of 2013, is primarily generated by:
    • The expanded mill at the Tabakoto Gold mine, which achieved design capacity during June 2013 with throughput now in excess of name plate.  The mill processing rate is scheduled to increase from approximately 2,200 tpd during Q1/2013 to 4,000 tpd during H2/2013.
    • Improving processed grade at Nzema, which is scheduled to increase from 1.6 g/t during H1/2013 to 1.9 g/t during H2/2013

Endeavour will provide additional information regarding operating margins, cash costs, and all-in sustaining cash costs in the upcoming Q2/2013 financial report scheduled for release in mid-August 2013.

Increased and Extended Corporate Debt Facility

Endeavour has signed a $350 million Senior Secured Revolving Corporate Loan Facility.  Up to $300 million of the facility can be used for general corporate purposes including working capital and capital expenditures.  As Endeavour had previously drawn $200 million under the original facility provided by UniCredit, the new facility now provides $100 million of additional credit.  The remaining $50 million of the facility will be available after the construction of the Agbaou Mine and can be used to fund expansions and other capital projects.

The key terms of the facility include:

  • Maturity date is five years from signing or July 24, 2018, and the available facility amount declines with six equal semi-annual reductions of $58.3 million commencing January 1, 2016
  • The facility requires standard corporate financial covenants, including
    • Interest Cover shall not be less than 3 to 1, calculated on a rolling 12 month basis
    • Net Debt to EBITDA shall not exceed 3.25 times, calculated on a rolling 12 month basis
    • Minimum tangible net worth of $600 million
  • The Facility is in US dollars, and interest is based on LIBOR plus a margin ranging between 3.75% and 5.5% per annum (sliding scale based on the actual Net Debt to EBITDA ratio)

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 FasoEndeavour'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 ounces 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).trades on the OTCQX (symbol EDVMF).

On behalf of Endeavour Mining Corporation

Neil Woodyer
Chief Executive Officer

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 www.sedar.com for further information respecting the risks affecting Endeavour and its business.

 

SOURCE Endeavour Mining Corporation

For further information:

Marla Gale
Vice President - Investor Relations

+1 604 609 6117
mgale@endeavourmining.com 

UK/Europe: Bobby Morse
Buchanan

+44 20 7466 5000
bobbym@buchanan.uk.com

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

www.endeavourmining.com

A Cayman Islands exempted company with limited liability.

ARBN 153 067 639

Data and Statistics for these countries : Burkina Faso | Cayman Islands | Ghana | Mali | All
Gold and Silver Prices for these countries : Burkina Faso | Cayman Islands | Ghana | Mali | All

Endeavour Financial Corporation

EXPLORATION STAGE
CODE : EDV.TO
ISIN : KYG3040R1092
CUSIP : G3040R109
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Endeavour Financial is a producing gold and cobalt company based in Cayman islands.

Its main exploration property is FYRE LAKE (KONA) in Canada.

Endeavour Financial is listed in Canada and in United States of America. Its market capitalisation is CA$ 2.4 billions as of today (US$ 1.8 billions, € 1.6 billions).

Its stock quote reached its lowest recent point on January 15, 1999 at CA$ 10.02, and its highest recent level on August 10, 2007 at CA$ 97.43.

Endeavour Financial has 96 450 000 shares outstanding.

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