Endeavour Mining Reports Strong Q4 Results

Beat upper-end of full-year production guidance and bottom-end of AISC guidance

• Q4-2018 production up 25% over Q3-2018 to 174koz and AISC down 13% to ~$715/oz
• FY-2018 production up 52% over the prior year to 612koz, beating the top end of the 555-590koz guidance
• FY-2018 AISC down ~$30/oz over the prior year to ~$745/oz, well below the guidance range of $760 - 810/oz
• FY-2019 production expected to increase to 615 - 695koz and AISC expected to remain low at $760 - 810/oz
• Ity CIL construction progressing on-budget and ahead of schedule with the dry plant commissioning completed, and first gold pour expected in early Q2-2019
• Following the strong success achieved in 2018, exploration will continue to be a strong focus in 2019 with a company-wide exploration program of $45-50m

George Town, January 24, 2019 - Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) is pleased to announce its preliminary financial and operating results for the fourth quarter and full year 2018, with highlights provided in the table below.


Table 1: Preliminary Key Operational and Financial Highlights

(for continuing operations)	QUARTER ENDED			YEAR ENDED
	Dec. 31,	Sep. 30,	Dec. 31,	Dec. 31,	Dec. 31,	FY-18
	2018	2018	2017	2018	2017	vs. FY-17
Gold Production, koz	174	139	151	612	403	+52%
All-in Sustaining Cost1, $/oz	~715	820	674	~745	774	(4%)

¹This is a non-GAAP measure.

Sébastien de Montessus, President & CEO, stated: "Our strong performance across all of our mines in Q4 capped a successful year for Endeavour during which we beat our production guidance and ended with AISC lower than the guided range while maintaining a strong safety record. The first full-year contribution from Houndé, coupled with the successful management of our portfolio, have sustainably decreased our all-in sustaining costs to below our strategic target of $800/oz.

2019 is expected to be another strong year as we look forward to the first gold pour at the Ity CIL plant in early Q2, where construction continues to progress ahead of schedule and on budget. Meanwhile, we will maintain an aggressive exploration program to build on the significant success achieved thus far.

Over the past two years, we have diligently worked to transform our portfolio, investing nearly $1 billion into the business. Once Ity CIL commences production, we expect to enter a period of sustained strong free cash flow generation with a continued focus on return on capital employed. In line with this approach, we have optimized our business plans with a greater emphasis on free cash flow metrics and intend to release working capital from the available low-grade stockpiles.

2019 is a pivotal year as the efforts we have made thus far are expected to generate significant growth in 2020 and beyond - Ity CIL will benefit from a full-year's production and Houndé from the newly discovered high-grade Kari Pump deposit."

STRONG Q4-2018 PERFORMANCE; BEATING FULL-YEAR GUIDANCE

Table 2: Group Production, koz

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

HOUNDÉ MINE

Q4 vs Q3-2018 Insights

• Tonnes of ore mined increased as mining activities ramped up following the end of the rainy season. Mining continued to focus on the Vindaloo Main and Vindaloo Central pits. The strip ratio was lower than initially planned due to a shift in the mine plan which delayed stripping to 2019.
• Tonnes milled increased slightly, continuing to perform nearly 30% above nameplate capacity. The ore blend continued to be mainly transitional/fresh ore. Oxide ore represented 34% of the mill feed, up from 32% in Q3-2018.
• Processed grades markedly improved as higher-grade areas of both the Vindaloo Main and Vindaloo Central pits became accessible following the end of the rainy season. In addition, the higher-grade ore mined was selectively processed while the lower-grade ore was stockpiled.
• Recovery rates decreased slightly, however remaining at the level assumed in the Optimized Study.

Table 4: Houndé Quarterly Performance Indicators

FY-2018 vs FY-2017 Insights

2018 Performance vs Guidance

Table 5: Houndé Yearly Performance Indicator

2019 Outlook

• Mining is expected to continue in the Vindaloo deposit, while ore extraction at the Bouere deposit is expected to start in late H1-2019. The strip ratio is expected to increase in 2019, due to both the mine plan sequence and to the carry-over of stripping delayed from 2018.
• Throughput is expected to remain above nameplate capacity while the ore blend is expected to shift from the current mix of ~30% oxide ore and ~70 % transitional/fresh ore feed to mainly fresh ore by year-end, resulting in higher operating costs. 
• Despite the expected higher grades mined, the average processed grade is expected to decline due to the use of lower-grade stockpiles. This marks a change compared to the previous mine plan due to the company's strategic focus on reducing working capital.
• Sustaining costs are expected to increase from $6 million to circa $35 million mainly due to the increased strip ratio, a TSF raise and components to be purchased for fleet maintenance.

AGBAOU MINE

Q4 vs Q3-2018 Insights

• Ore mined increased due to greater extraction at the South Pit as less stripping was necessary. Waste extraction efforts continued in the West pit, resulting in an increase in the overall strip ratio.
• Mill throughput increased as the proportion of fresh ore processed decreased from 15% to 12%.
• Processed grades increased due to the change in mining sequence giving access to higher grade ore.
• Recovery rates improved slightly due to a lower proportion of fresh ore processed.

Table 6: Agbaou Quarterly Performance Indicators

FY-2018 vs FY-2017 Insights

2018 Performance vs Guidance

Table 7: Agbaou Yearly Performance Indicators

2019 Outlook

• Mining is expected to focus mainly in the West pit, with some contribution from the North and South pits. The strip ratio is expected to remain at a high-level as a portion of the planned 2018 waste capitalization was shifted to 2019.
• The plant throughput is expected to decline as the oxide ore blend is expected to reduce from approximately 80% in 2018 to 60%, with the remainder of the feed comprised of fresh and transitional ore.
• Despite expecting to mine higher grade ore, the average processed grade is expected to remain fairly flat over 2018 due to the use of lower-grade stockpiles. This marks a change compared to the previous mine plan due to the company's strategic focus on maximizing free cash flow generation and reducing working capital.
• Sustaining costs are expected to increase from $13 million to circa $24 million mainly due to increased waste capitalization.

KARMA MINE

Q4 vs Q3-2018 Insights

• Tonnes of ore mined increased as mining activities ramped up following the end of the rainy season. Activities focused exclusively on mining oxide ore from the Kao pit.
• Mill throughput increased as operating conditions improved, with increased stacker utilization.
• Recovery rates remained high due to the improved leach characteristics of the oxide ore stacked.

Table 8: Karma Quarterly Performance Indicators

FY-2018 vs FY-2017 Insights

2018 Performance vs Guidance

Table 9: Karma Yearly Performance Indicators

2019 Outlook

• Mining is expected to focus mainly on oxide and transitional ore from the Kao pit, which is expected to be mined out by mid-year, and on oxide ore from the North Kao pit where pre-stripping will begin in Q1-2019 and ore extraction in Q2-2019. The strip ratio is expected to increase in 2019 due to North Kao.
• Tonnes stacked and recovery rates are expected to remain fairly flat over 2018.
• The mine's performance is expected to be better in the second of the year as the first half is expected to be impacted by the Kao pit transitional ore.
• Sustaining costs are expected to decrease from $7 million to circa $5 million with the main spending related to the waste capitalization at North Kao pit.

ITY MINE: HEAP LEACH OPERATION

Q4 vs Q3-2018 Insights

• Production remained flat as a decrease in stacked grade was offset by a higher recovery rate.
• Tonnes of ore mined decreased, in line with the plan, as mining activity for the heap leach decreased to prioritize the construction of the CIL plant. Mining for the heap leach operation ceased mid-December.
• Ore stacked decreased as the quantity of ore mined decreased with lower-grade stockpiles supplementing the stacked feed. Stacking at the heap leach operation ceased mid-December.
• The stacked grade decreased as mining activity at the high-grade Bakatouo pit ceased for heap leach operations and low grade ore stockpiles were used.
• Recovery rates increased due to improved leach characteristics associated with the ore stacked from the Bakatouo pit.

Table 10: Ity Quarterly Performance Indicators

FY-2018 vs FY-2017 Insights

2018 Performance vs Guidance

Table 11: Ity Yearly Performance Indicators

2019 Outlook

TABAKOTO MINE (DISCONTINUED OPERATION)

Tabakoto Sale Insights

Q4 vs Q3-2018 Insights

• Open pit production significantly decreased as the Tabakoto North pit neared its end of life.
• Underground tonnes mined increased due to the end of the rainy season, allowing for improved stope access and productivity. 
• Despite a decrease in total milled tonnage, processing activities continued to perform well with throughput rates remaining flat.
• The overall average grade processed increased as per the mine sequence.
• The recovery rate remained flat.

Table 12: Tabakoto Quarterly Performance Indicators

FY-2018 vs FY-2017 Insights

2018 Performance vs Guidance

Table 13: Tabakoto Yearly Performance Indicators

ITY CIL PROJECT CONSTRUCTION: AHEAD OF SCHEDULE and on-budgeT

• More than 7 million man-hours worked with zero lost-time injuries.
• Overall project completion stands at more than 95%, tracking approximately 2 months ahead of schedule. 
• The project remains on-budget with the remaining cash outflow for 2019 amounting to $50 - $60 million. 
• The dry commissioning of the SAG and Ball mills was recently completed, and the wet plant mechanical, piping and electrical works are progressing well.
• Pre-stripping commenced at the Bakatouo and Ity Flat deposits. 
• Tailings storage facility earthworks are progressing well against schedule with over 90% completed. 
• The 91kv transmission line is 98% complete and the 29MW power station commissioning commenced with four gensets already available for operation.
• The employee permanent camp construction was completed, with all 312 rooms available for occupation.
• The resettlement of Daapleu was completed and the official ceremony of handing over the houses took place on December 10, 2018.
• A portion of the construction team has already started to demobilize.

Picture 1: Ball and SAG mills

KALANA PROJECT UPDATE

BALANCE SHEET, FINANCING & LIQUIDITY SOURCES

• Capital spend on the Ity CIL growth project which progressed ahead of schedule.
• Increase in equipment financing relating to the backup CAT power generators and the commissioning of the second batch of Komatsu mine fleet at Ity.
• Net cash impact from the Tabakoto disposal and the cash generated from the operating assets.

Table 14: Net Debt Position

2019 OUTLOOK

Table 15: Production Guidance from Continuing Operations, koz

Table 16: AISC Guidance from Continuing Operations, $/oz

Table 17: Capital Expenditure Guidance, $m

CONFERENCE CALL AND LIVE WEBCAST

Management will host a conference call and live webcast on Tuesday March 5^th at 8:30am Toronto time (EST) to discuss the Company's financial results.

The conference call and live webcast are scheduled at:
5:30am in Vancouver
8:30am in Toronto and New York
1:30pm in London
9:30pm in Hong Kong and Perth 

The live webcast can be accessed through the following link:
https://edge.media-server.com/m6/p/n759ggdv

Analysts and investors are also invited to participate and ask questions using the dial-in numbers below:
International: +16315107495
North American toll-free: + 18669661396
UK toll-free: 08003767922

Confirmation Code: 5693456

The conference call and webcast will be available for playback on Endeavour's website.

Click here to add Webcast reminder to Outlook Calendar

Access the live and On-Demand version of the webcast from mobile devices running iOS and Android:

QUALIFIED PERSONS

Jeremy Langford, Endeavour's Chief Operating Officer - Fellow of the Australasian Institute of Mining and Metallurgy - FAusIMM, is a Qualified Person under NI 43-101, and has reviewed and approved the technical information in this news release.

CONTACT INFORMATION

ABOUT ENDEAVOUR MINING CORPORATION

Endeavour Mining is a TSX listed intermediate African gold producer with a solid track record of operational excellence, project development and exploration in the highly prospective Birimian greenstone belt in West Africa. Endeavour is focused on offering both near-term and long-term growth opportunities with its project pipeline and its exploration strategy, while generating immediate cash flow from its operations.

Endeavour operates 4 mines across Côte d'Ivoire (Agbaou and Ity) and Burkina Faso (Houndé, Karma) which are expected to produce 615-695koz in 2019 at an AISC of $760-810/oz. 

For more information, please visit www.endeavourmining.com.

CAUTIONARY STATEMENTS REGARDING 2018 PRODUCTION AND AISC

Endeavour cautions that, whether or not expressly stated, all figures contained in this press release including production and AISC levels are preliminary, and reflect our expected 2018 results as of the date of this press release. Actual reported fourth quarter and 2018 results are subject to management's final review, as well as audit by the company's independent accounting firm, and may vary significantly from those expectations because of a number of factors, including, without limitation, additional or revised information, and changes in accounting standards or policies, or in how those standards are applied. Endeavour will provide additional discussion and analysis and other important information about its 2018 production and AISC levels when it reports actual results.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

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. AISC, all-in sustaining costs at the mine level, cash costs, operating EBITDA, all-in sustaining margin, free cash flow, net free cash flow, free cash flow per share, net debt, and adjusted earnings are non-GAAP financial performance measures with no standard meaning under IFRS, further discussed in the section Non-GAAP Measures in the most recently filed Management Discussion and Analysis.

Corporate Office: 5 Young St, Kensington, London W8 5EH, UK

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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Endeavour Mining Corporation via Globenewswire