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Endeavour Mining reports Q2 2011 Cash Flow from Mine Operations of $13.3 million and earnings of $32.8 million
August 10, 2011
(All figures are in US dollars unless otherwise indicated)
GEORGE TOWN, Grand Cayman - Endeavour Mining Corporation (TSX: EDV) today announces financial and operational results for the second quarter of 2011.
The Corporation's Youga Mine in Burkina Faso produced 21,575 ounces of gold during Q2 2011 at cash cost of $586 per ounce produced1. During the quarter, 24,697 ounces of gold were sold at a cash cost of $512 per ounce sold1 and operating cash flow from mine operations was $13.3 million. The combination of steady gold production, reducing inventory levels through higher gold sales, and continued strength in gold price resulted in strong financial results.
At June 30, 2011, the Corporation had cash & equivalents and marketable securities of $195 million and was debt-free. The Corporation also holds a 38.5% stake in Namibia Rare Earths Inc., a recent IPO on the TSX, with a market value of $17.7 million as at June 30, 2011.
Financial Highlights from Q2 2011
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Gold revenues of $36.0 million, which compares to $20.8 million in the same quarter of 2010;
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Gold production of 21,575 ounces, which compares to 20,292 ounces in the same quarter of 2010;
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Gold sales of 24,697 ounces, which compares to 17,566 ounces in the same quarter of 2010;
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Earnings from mine operations were $14.8 million, which compares to $7.2 million in the same quarter of 2010;
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Operating cash flow from mine operations was $13.3 million, which compares to $6.7 million in the same quarter of 2010;
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Net earnings attributable to shareholders of $32.8 million or $0.29 per share, which compares to $8.9 million or $0.09 per share in the same quarter of 2010. The significant increase in earnings during the current quarter is due to strong earnings from the mine operations and a one-off gain of $22.1 million associated with the Namibia Rare Earths Inc. IPO transaction.
Based on actual production results of 41,631 ounces at a cash cost of $608 per ounce produced1 for the first half of 2011 and the budgeted plan for the remainder of 2011, the Corporation anticipates achieving full year guidance of approximately 84,000 ounces. With recent fuel price and indirect tax increases in Burkina Faso, the Corporation's guidance for 2011 cash costs has been revised to $610 to $650 per ounce1, which compares to previous guidance of approximately $600 per ounce1.
Neil Woodyer, Chief Executive Officer commented: "Our strong Q2 2011 results were generated by our focus on optimizations and cost controls at the Youga Mine and with better management of gold inventory levels. As Youga's primary source of energy for processing operations is electric grid power from Ghana, and not diesel, the impact of recent increases in fuel surcharges in Burkina Faso will be modest as compared to some of our peers.
As discussed in our August 3, 2011 press release, we are excited by the discovery of new zones of mineralization at our Agbaou feasibility-stage project in C�te d'Ivoire. A mine construction decision for Agbaou is anticipated for Q1 2012 with gold production scheduled to commence in late 2013. In addition to engineering studies, we are now planning a drilling program to follow-up on this new mineralization. Our exploration activities on the Youga Gold Belt in Burkina Faso continue to be successful at identifying additional mineral resources, particularly around the operational pits and A2NE, Nanga, and Tail satellite deposits. Metallurgical testwork is being initiated at the Ouar� deposit, located 40km from the Youga Mine, in preparation for scoping studies to evaluate whether the deposit will be processed by agitation or heap leaching.
We anticipate extending the mine life at Youga with near-mine exploration programs and growing our gold production from Agbaou and Ouar� development projects and our additional exploration programs in West Africa."
Conference Call Details
Management's discussion of the financial results will be webcast by V-Call on Wednesday, August 10, 2011 at 11:00 am Eastern Time or 8:00 am Pacific Time and can be accessed from the Corporation's website at www.endeavourmining.com or by calling the operator at 201-689-8565 or toll-free 1-877-407-0778 prior to the scheduled start time. The call will be archived for later playback on Endeavour's website until August 10, 2012.
In order to access the Corporation's financial statements directly, please click the following URL: http://files.newswire.ca/910/EndeavourCall.pdf
Financial Statements and related Management Discussion and Analysis will also be available on SEDAR.
Qualified Person
K. Kirk Woodman, P. Geo, Head of Exploration is the Qualified Person overseeing Endeavour's exploration projects in West Africa and has review and approved this press release.
Adrian De Freitas, C.Eng., General Manager, Youga Mine is the Qualified Person overseeing production and development in West Africa and has reviewed and approved this press release.
About Endeavour Mining Corporation
Endeavour is a gold producer. Endeavour also holds an extensive exploration land position and various advanced-stage development gold projects in West Africa. Endeavour has a global strategy, supported by financial resources and management's company building expertise, to grow into an intermediate gold producer through strategic acquisitions.
The common shares of Endeavour Mining Corporation are traded on the Toronto Stock Exchange under the symbol "EDV".
On behalf of Endeavour Mining Corporation
"Christian Milau"
Christian Milau
Executive Vice President & Chief Financial Officer
1Cash Cost per Ounce is a non-GAAP financial performance measure with no standard meaning under IFRS. The amount presented is calculated on the basis of operating costs excluding royalties, refining, freight, and non-cash adjustments.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The foregoing information may contain forward-looking information relating to the future performance of Endeavour Mining Corporation. Forward-looking information, specifically, that concerning future performance, is subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Corporation's filings with the appropriate securities commissions.
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For further information, please contact:
Stephen Roberts, Senior Vice President - Investor Relations
Tel: 604.609.6130
sroberts@endeavourmining.com
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