Endeavour Mining Q1 2025 Earnings Report

Endeavour Mining EPS Results

• Actual EPS: GBX 71
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Endeavour Mining Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Endeavour Mining Announcement Details

• Quarter: Q1 2025
• Date: 5/1/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 1, 2025
• Conference Call Time: 8:30AM ET

Endeavour is one of the world’s senior gold producers and the largest in West Africa, with operating assets across Senegal, Cote d’Ivoire and Burkina Faso and a strong portfolio of advanced development projects and exploration assets in the highly prospective Birimian Greenstone Belt across West Africa. A member of the World Gold Council, Endeavour is committed to the principles of responsible mining and delivering sustainable value to its employees, stakeholders and the communities where it operates. Endeavour is listed on the London and Toronto Stock Exchange, under the symbol EDV.

Endeavour Mining Q1 2025 Earnings Call Transcript

Key Takeaways

• Q1 2025 operational performance: Produced 341,000 ounces of gold at an all-in sustaining cost of $1,129/oz, keeping the company on track for full-year guidance despite a planned second-half production dip.
• Record free cash flow: Generated $409 million in Q1 and $775 million since Q3 2024 (average $795/oz), reducing net debt by $354 million to $378 million and leverage to 0.22× EBITDA versus a 0.5× target.
• Increased shareholder returns: Paid $240 million in dividends and $37 million in buybacks in 2024 (5.9% yield), committed $225 million minimum in dividends plus $52 million buybacks so far in 2025 and aims to exceed a $277 million return envelope.
• Tier 1 Asafu project advancing: On track to underpin a 35% production increase to 1.5 Moz by 2030, with ongoing drilling, a late 2025 resource update, and a definitive feasibility study targeted for completion in late ’25/early ’26.
• Emissions and operational efficiency: Commissioned a solar plant at Sabodala-Massawa in Q1 to cut fuel consumption, lower power costs and reduce emissions intensity, while continuing social programs like a local content accelerator and maintaining a group LTIFR of 0.05.

Presentation

[Operator]

Welcome to Endeavour Mining's First Quarter twenty twenty five Results Webcast. At this time, all participants are in a listen only mode. After management presentation, there will be a question and answer session. So for those who wish to ask a question, please dial into the phone line. Please note that due to time constraints, we will be prioritizing questions from covering analysts.

[Operator]

Today's conference call is being recorded, and a transcript of the call will be available on Endeavor's Web site tomorrow. I would now like to hand the conference over to Endeavor's Vice President of Investor Relations, Jack Garman. Please go ahead.

[Jack Garman, VP - IR at Endeavour Mining]

Hello, everyone, and welcome to Endeavor's Q1 twenty twenty five results webcast. Before we start, please note our usual disclaimer. On the call today, I'm joined by Ian Cockrell, Chief Executive Officer Guy Young, Chief Financial Officer and Jariatreyore, Executive Vice President of Operations and ESG, who's joining us from Dhaka in Senegal. Today's call will follow our usual format. Ian will first go through the highlights, Guy will present the financials, and Jariat will present our operating results by mine before handing back to Ian for his closing remarks.

[Jack Garman, VP - IR at Endeavour Mining]

We'll then open the line up for questions. With that, I'll hand over to Iain.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Thank you, Jack, and hello to everyone joining us on the call today. I'm proud to say that we've delivered another strong operational and financial quarter for the first quarter of twenty twenty five, building on the momentum from the second half of last year. Our operating performance combined with our disciplined cost management has enabled us to capitalize on the rising gold price environment and generate record free cash flow. This has enabled us to significantly strengthen our financial position, surpassing our leverage target, and position the group to deliver higher shareholder returns through this particularly exciting phase. We produced 341,000 ounces of gold at an all in sustaining cost of $1,129 per ounce in the first quarter, placing us firmly on track to achieve our full year guidance.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

As we move through the year, we are planning for slightly lower production in the second half, but we will focus on keeping our cost discipline and improving productivity and operational efficiencies to maintain our class leading cost and maximize free cash flow generation. Since the end of our organic growth growth phase, in q three twenty twenty four, our operations have generated $775,000,000 in free cash flow, and that represents over $795 for every single ounce that we've produced over that period. More importantly, our free cash flow generation has continued to grow in each quarter since the beginning of 2024, demonstrating the quality of our improved portfolio and the benefits of bringing low cost production online in a rising gold price environment. As a result, we're able to reduce our net debt by $354,000,000 and we reduced our leverage significantly down to 0.22 times net debt to adjusted EBITDA and well below our long term target of 0.5 times. We significantly strengthened our balance sheet and improved our financial flexibility, which allows us to focus on increasing shareholder returns and our longer term organic growth pipeline.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

We paid record dividends for 2024 of $240,000,000 and total return of $277,000,000 equivalent to a 5.9% indicative yield or $251 for every ounce that we produced. We expect to exceed that total returns envelope in 2025 as we seek to supplement a 225,000,000 minimum, dividend commitment with additional dividends and buybacks. And you've seen that we've already supplemented returns with $52,000,000 of share buybacks the year to date already, which brings minimum commitment for 2025 already to $277,000,000. That's exactly what we delivered for the whole of 2024. And as such, we're clearly well positioned to deliver on an increased shareholder returns profile for the third consecutive year.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

While shareholder returns remain the near term focus, we are keeping one eye on the future by enhancing, organic growth pipeline. Our Tier one Asafu project, which will underpin our 35% production growth to one and a half million ounces by 02/1930 is on track, and we're confident that our exploration program will continue to increase the endowment of this already world class complex. We expect to provide a resource update, in the second half of this year as we advance the definitive feasibility study, towards completion. Finally, during q one, we were delighted to complete the commissioning of our solar plant at Sabodala Massawa, which will support our continued improvement in emissions intensity and importantly, help reduce fuel consumption and power costs at that mining complex. As you can see from the snapshot, Endeavor has entered 2025 with a great deal of momentum, and I'm confident this will continue through the rest of the year and to the benefit of all of our stakeholders.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Let's dive into a little bit more detail, and I think this particular slide really is a snapshot of what's happened in Endeavor over the past year or so. As we look at the operating performance on slide seven, you can see in the first quarter of twenty twenty five, group production of 341,000 ounces was slightly lower compared to q four twenty four, but in line with our mining sequence. But importantly, it was up a 22,000 ounces over the corresponding period in 2024. Despite this, we improved our all in sustaining cost, which improved by $12 per ounce quarter over quarter as we improved mining, processing, and capital costs across the group. With lower costs and higher realized gold price of $2,783 during the quarter, we generated a strong all in sustaining margin of nearly 60% or translated to $1,654 for every ounce that we produced.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Overall, our safety performance has remained strong with the group LTIFR of only 0.05 during the quarter. Gerard is going to touch on our safety performance in a little more detail later. And the strong first quarter performance has certainly positioned us well to achieve our full year guidance as you can see on Slide eight. Our Q1 group production was more than 30% of the lower end of the guidance range and our all in sustaining costs was well below the lower end of our guidance. This operational performance translated into record quarterly free cash flow generation for the group, as you can see on this slide.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

We generated $4.00 $9,000,000 of free cash flow during the quarter or equivalent to $11.99 dollars for every ounce of gold we produced. And our free cash flow margin also increased to 39%. Free cash flow has been supported by strong production, improving costs, seasonally lower taxes, and significantly lower capital following the completion of our growth capital phase. Over the past three quarters, since the end of this organic growth phase, we've increased free cash flow generation every quarter. And cumulatively, we've generated $775,000,000 of free cash flow.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

That's equivalent to $795 for every ounce of gold we've produced over that period. With our major growth projects now fully ramped up and our cost base stabilized, we're focusing on maximizing the free cash flow generation for every ounce of gold we produce to capitalize on this strong gold price environment. On the next slide, I want to highlight just how strong free cash flow generation has helped improve our balance sheet this quarter. We significantly reduced our leverage from 0.55 times net debt to adjusted EBITDA to just 0.22, comfortably below our long term target of 0.5 times. And looking forward, we certainly want to maintain our leverage below 0.5, and Guy will discuss our balance sheet in a little bit more detail later as well.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Given our free cash flow growth, and that we have now deleveraged our financial position, we're well positioned to prioritize shareholder returns. We want to build on the record dividends of $240,000,000 an attractive total return of $251 for every ounce that we produced last year. We committed to exceeding our minimum commitment of $2.02 $5,000,000 this year, and we've already completed the $52,000,000 of buybacks. So that means a total return so far guaranteed for 2025 of $277,000,000. And we're we're well positioned now to deliver, an increased envelope to our shareholders.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

As you can see on this chart, since we started paying shareholder returns with our first payment in q one twenty twenty one, four years ago, we've returned more than $1,200,000,000 to our shareholders. That's equivalent to a third of our market cap at the start of the program and reflects our sustained commitment to delivering shareholder returns both through phases of growth and phases of cash flow generation and reiterates the quality and the resilience of this business. Looking at our supplemental share buybacks in a bit more detail on this slide, you can see that we've accelerated buyback activity in Q1 by four times that of the previous quarter. We delivered $52,000,000 in share buybacks through the purchase or repurchase of 2,400,000.0 shares. As we've advanced into our cash flow phase, we still see significant valuation upside by repurchasing our own stock.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

We'll be continuing to be opportunistic with buybacks and maintain flexibility to allocate supplemental cash towards buybacks or dividends depending upon where we see the best return. To put our shareholder returns in context, it is clear that in the gold mining sector, our returns are consistently amongst the highest both on a yield basis and a dollar per ounce basis. When we compare our shareholder return indicative yield against other sectors, it's equally attractive, and that comparison for 2024 doesn't capture the recent improvement in the gold price. While gold has performed well, generous portfolios do still remain underweight with gold equities. But we believe the consistent operating performance, disciplined capital allocation, stable and transparent returns, and a sustained high gold price environment are key drivers for these investors to pivot towards gold equities.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

And I genuinely believe Endeavor is amongst the best positioned gold equities to capitalize, on that on that trend. While shareholders, shareholder returns continue to be the major focus, we're also progressing our longer term organic growth to ensure that we can continue to grow production and maintain our first cost quartile position. This year, with a $75,000,000 budget, our exploration program is focused on adding near mine resources across the portfolio to improve optionality at each of our mines. At our development project at Sarsu, we're expanding resources as well as delineating new resources at the surrounding satellite deposits. We're also building out our early stage exploration pipeline with our greenfields new ventures program to ensure that we have visibility of future organic growth beyond SAFU.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

On the next slide, nothing better exemplifies Endeavor's ability to unlock value through the drill bit than the Asafu project. This tier one project is advancing on track, and we're excited with the progress we've seen on the exploration front. We are continuing to drill at this, this deposit to further delineate the known mineralization and extend that mineralization both along strike and at depth. We're also drilling nearby satellite targets, notably Parla, which is only about one kilometer west of Asafu. We expect to increase the Asafu endowment in a resource update, in the second half of this year that will incorporate up to a 90,000 meters of additional drilling over and above the existing resource.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Last year, we signed a joint venture agreement with Kulu Gold, who have an option to earn up to a 90% interest in the Asefrae, permit, which is due East of Ossefrae. Ossefrae shares a similar structural and geological setting to Ossefrae with golden soil anomalies highlighting multiple prospective structural contacts that are yet to be extensively explored. We're excited by this potential, to further expand the endowment of the Esafu complex, potentially advancing it into a truly world class system. For Esafu, we're on track to deliver the DFS by late twenty five going possibly even into early twenty six and could start construction in the latter half of twenty six permits, permitting with first production expected in the second half of twenty eight. On the next slide, we're certainly building on a strong ESG performance in 2024, and we've kicked off 2025 with a continued focus on delivering tangible outcomes across all pillars of sustainability.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

We remain committed to producing gold responsibly and sustainably so we can create meaningful value for all of our stakeholders. Building on our first quartile emissions performance in '24, we're targeting an even lower emissions intensity in '25 as we continue to implement our decarbonization roadmap, which will be supported by the introduction of solar solar plant at Sabodala Massawa. On the social side for '25, we continue to strengthen our commitment to local content. Although we're already spending about 80% of our annual procurement budget in country, which over the past two years equates to approximately $3,600,000,000. There's more that we can do, particularly for those smaller suppliers around our mine sites.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

We recently launched their local content accelerator, which is a key initiative led by Endeavor to boost the local economic ecosystems around our minds. With regards to local talent management, we're strengthening our West African leadership teams by building succession programs and developing female talent, and we look forward to providing more detail on these initiatives, towards the year end. In terms of health and safety, we're really pleased with our current performance, and we set robust targets for 2025 linked to group wide compensation to ensure that we maintain a safe workplace for all of our employees. And with that, let me hand you over to Guy, who will walk you through the financial results in detail. Guy, over to you.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Thanks, Ian. Hi, everyone. I'll now walk you through our financial results for the quarter. As Ian mentioned, we finished 2024 with a strong performance both operationally and financially. That momentum has continued into the first quarter of twenty twenty five with strong production and improved costs, which coupled with a higher gold prices underpinned record margins, EBITDA and free cash flow generation.

[Guy Young, Executive VP & CFO at Endeavour Mining]

In Q1, our adjusted EBITDA grew 12% quarter over quarter to $613,000,000 free cash flow grew 53% to $4.00 $9,000,000 and all profitability and cash flow metrics were materially improved. Whilst our peers are likely also seeing some improvement in profitability due to the strong gold price, we believe that our transition from a phase of growth to a phase of free cash flow generation has us very well positioned to take advantage of the current gold price environment and maximize free cash flow generation for our shareholders. We will achieve this by delivering against our operational guidance, maintaining our class leading costs and our capital discipline. If we turn to Slide 19, you can see the pleasing improvement in our nominal EBITDA generation as well as EBITDA margin over the last three quarters. In Q1, we achieved a new record adjusted EBITDA increasing 12% quarter over quarter.

[Guy Young, Executive VP & CFO at Endeavour Mining]

This was driven by the support of gold price as well as continued cost discipline as cash costs and all in sustaining costs both improved. Turning to our operating cash flow on Slide 20, we delivered another quarterly record for the group. We generated $494,000,000 in operating cash flow, an increase of 30% over Q4. This continued growth reflects the benefits of our fully ramped up projects, additional production at low cost as well as high realized gold prices. Looking ahead, as we've already highlighted, we expect production to be slightly first half weighted this year, resulting in slightly higher costs through the remainder of the year.

[Guy Young, Executive VP & CFO at Endeavour Mining]

In addition, as I outlined in our full year results, we expect to pay significantly higher cash taxes in Q2 and Q3, as detailed in our tax guidance, due to the timing of income tax payments in each of the jurisdictions and the timing of withholding tax payments associated with cash up streaming in the middle of the year. On Slide 21 and looking at the quarter over quarter change in our operating cash flow in a little bit more detail. The average realized gold price for continuing operations rose by $193 per ounce to $2,783 per ounce, inclusive of losses realized on hedges and our LBMA averaging strategy under the revenue protection program. Gold sales volumes were slightly lower quarter over quarter, decreasing by 3,000 ounces to 353,000 ounces. However, this was more than offset by lower cash operating expenses and the effect of the $150,000,000 prepayment, which was settled in the prior period.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Income taxes paid increased by $22,000,000 to $39,000,000 this quarter due to the timing of tax payments predominantly at Sabodala Massawa. Finally, we had a larger working capital outflow this quarter. This is driven by a catch up in supplier payables invoiced late last year, an inventory outflow related to an increase in Goldman circuit and stockpile builds at Hounde and Eti, and a smaller receivables outflow related to the buildup in VAT receivables in Burkina Faso. We expect that supplier payments and inventories will start to normalize over the remaining quarters, and we continue to look at ways of recovering the greater proportion of our VAT receivables in Burkina. So we expect changes in the working capital to be smaller in the coming quarters.

[Guy Young, Executive VP & CFO at Endeavour Mining]

On Slide 22 and our free cash flow. As mentioned, Q1 marked the fourth consecutive quarter of free cash flow growth, continuing the momentum we've generated following the completion of our growth phase. In Q1, free cash flow increased by $141,000,000 or 53% over Q4. This change was underpinned by a strong production, low operating capital costs, high realized gold prices and seasonally lower taxes. This level of free cash flow has further strengthened our balance sheet and supports our ongoing priority to return capital to shareholders.

[Guy Young, Executive VP & CFO at Endeavour Mining]

In terms of our change in net debt, Ian highlighted the rapid deleveraging following our growth phase. On Slide 23, you can see the Q1 improvement in our leverage from 0.55 to 0.22 times as our net debt decreased by $354,000,000 to $378,000,000 at the end of Q1. The largest driver of this deleveraging was obviously our strong operating cash flow. Investing activities included $56,000,000 in sustaining capital, dollars 38,000,000 in non sustaining capital and $6,000,000 in growth capital, which is partially offset by a one off $17,000,000 inflow related to the release of restricted cash at Ity. On the financing side, we purchased $40,000,000 in shares through the buyback program, with the remainder related to debt drawdown and leasing finance fees.

[Guy Young, Executive VP & CFO at Endeavour Mining]

We also recognized $10,000,000 foreign exchange gain on cash balances during the quarter as the dollar weakened compared to the euro. We will look to maintain our leverage below our 0.5 times target for now. Being below our mid term leverage target ahead of the potential build allows us to increase shareholder returns through supplemental dividends and share buybacks, while continuing to fund our longer term organic growth pipeline. On Slide 24, earnings per share increased by from $0.45 to $0.90 In summary, the growth in net and adjusted net earnings has come from the improved gross earnings along with lower impairment charges this quarter compared to last, partially offset by higher realized losses on our hedges as a result of the higher gold price. With that, I'd like to hand over to Charya, who will provide a more detailed review of our operating performance. Charya?

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Thank you, Guy, and hello to everyone from the Doctor office. As always, I would like to start with our continued strong safety performance. Our group lost time injury frequency rate has decreased to just 0.05, which is well below the industry average as Ian mentioned earlier. Safety remains, of course, our top priority. And this year, we will be concentrating on behavioral based safety training as well as safety leadership, trending to reinforce again our strong safety culture.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Looking at portfolio performance starting from Slide '27, I am pleased to report that we're off to a really strong start for 2025. Production of 341,000 ounces in the first quarter was slightly better than planned and represent over 30% of the lower end of our 2025 guidance range. This, of course, put us firmly on track to meet our full year production guidance range. Our all in sustaining costs improved due to the strong production and even stronger gold sales, coupled with cost improvement across Hounde, Ity as well as Sabodala Massawa. During quarter one, the production was stronger than expected at Hounde as we have prioritized the high grade ore from the Karipom deposit ahead of the wet season.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

But as we move through the year, we expect progressively lower grades at Hounde and slightly lower grade at Ity and Sabadola Massawa. As a result, we expect the group production to be weighted towards the first half of year with slightly lower production and higher cost in the latter half. Now turning to mine by mine performance, and I will start with Sabodala Massawa on Slide 28. I am pleased with the progressive bottom line improvement that we've seen from Sabodala Massawa since the start up of the BIOX plant in quarter three of twenty twenty four. We've had a strong start to 2025 with a quarter one production coming in slightly higher than quarter four twenty twenty four, which is driven by increased throughput and higher recovery rate at both the CIL and BIOX plant, which was partially offset by slightly lower average grades.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

But most importantly, the recovery rates in both plants increased significantly over quarter four twenty twenty four. All in sustaining costs decreased quarter over quarter due to improved load and haul efficiency and increased gold sales. At the CIL plant, we now have greater availability of high quality non refractory ores, following our extensive grid control drilling effort that we started since last year, which is giving us more optionality in mining and processing, then ensuring grades and recovery remain in line with the expectations. At the biocs plant, mining has advanced into largely fresh ore in the Massawa Central Zone, which is the main source of refractory ore, and we are currently feeding over 80% fresh ore into the biocs plant. The flotation performance has significantly improved because of this higher fresh ore feed, driving higher overall recoveries.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

We expect this trend of increasing the BIOX recovery to continue improving as we move towards a higher proportion of fresh ore in the feed. We are also advancing our three optimizations initiatives at Sabadola Massawa that we expect to support performance improvement as well as production growth from the second half of this year. As I've detailed in our full year result, we are also looking to optimize and increase the throughput in the BIOX plant to advance exploration for higher grade non refractory deposit for the CIL plant, as well as to accelerate the underground expansion to provide higher grade non refractory ores in the coming years. We expect to provide an update on the ongoing technical review with our quarter two results. And now looking ahead to the rest of this year, we expect an improvement in the BIOX recoveries and throughput, but really on overall throughput and recovery should be largely stable.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

The grades are expected to decrease slightly due to lower grade ore blend expected through the CIL plant. Even so, we believe that Sabadola remains on track to achieve its annual production and all in sustaining cost guidance. Let's now turn to Hounde mine on Slide 29. Hounde has another very strong quarter as we continue to prioritize the high grade ore from the Karri Pump Pit ahead of the wet season. All in sustaining costs have also improved, driven by operational excellence initiatives to optimize drill and blast efficiency and increase mining fleet productivity.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

As we advance through the year, we expect grades to decrease, which will be slightly offset by higher recovery as mining activity move away from the Kari Pump Pit and more into the lower grade of Kari West, Vindalumen and Vindalumnofit. Hyundai is well positioned to achieve its full year guidance, having already produced 40% of the lower end of the production guidance range. And all in sustaining costs are substantially below the lower end of the cost range. With regards to exploration, the program remains focused on delineating near mine resources at the Vandal Dips, Kari Deeps and Maricipant targets. And the ongoing drilling program at the Vandalu Deeps deposit is designed to confirm the potential for large high grade underground resource.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Turning to Ity on Slide 30. In the first quarter of twenty twenty five, the production has remained consistent with the prior quarter in 2024 with all in sustaining costs improved due to an increase in gold sales. This was a catch up in sales from the prior quarter due to the timing of shipment. But as we progress through the year, we will decrease the mining of high grade ore at the Le Plaque and Ity pits, though we expect this to be partially offset by higher recoveries as the ore blend changes that's for the mining sequence. Longer term, we were pleased with the full year reserve update at Ity, which has increased reserves by 50%, adding another 1,200,000 ounces.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

And following this update, we see scope for ET to maintain an annual production profile above 300,000 ounces over the longer term. But most importantly, we continue to see opportunities for further results growth on the wider ET trend, which remains largely underexplored. Moving to the Mana mine on Slide 31. The production increased for the quarter compared to quarter four twenty twenty four, driven by higher average grade processed. All in sustaining costs increased this quarter, primarily due to higher royalty payment linked to the improved gold price, increased sustaining capital development and elevated mining and processing unit cost.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

But looking forward, Mana is tracking well towards its full year guidance, and we expect grades to be slightly lower from the second quarter, but stable throughput and recovery rate throughout the year. Importantly at Mana, we have now achieved commercial stopping production across all three of the underground stops in the Wona deposit, namely Wona, Ganguna and Aviara. And we are now focused on ramping up stoping tonnage to sustain access to a higher grade to feed the plant. And on the exploration side, we also continue to work on delineating the deeper resources at the Wona deposit in order to support resource addition and conversion into reserves over the coming years. This is expected to support a longer mine life visibility at Mana.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Now turning to our fifth and newest mine, La Figue on Slide 32. In quarter one, production decreased compared to quarter four twenty twenty four as we processed lower average grades in line with the mine sequence. All in sustaining costs increased, which was driven by lower gold sales and higher processing costs, which were associated with scheduled maintenance activities. But looking ahead through the year, throughput and recovery rates at Lafiguille are expected to remain stable at slightly lower grades as the main source of ore moves to the eastern flank of the main pit. We have brought in additional mining contractors to help with grid control drilling and increase mining volume as we also look at initiatives to drive higher levels of throughput in the plant.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

But at the same time, our exploration program is targeting near mine opportunities that could provide some satellite oxide or FEED, which increase operating flexibility over the coming years. All in all, Lafigea remains firmly on track to also achieve its full year 2025 guidance. I'm now handing back to Iain for his closing remarks.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Thanks very much, Jerria. As you can see, Endeavor is off to a really strong start in 2025, building on the momentum from last year with Q1 laying a robust foundation to deliver on our strategic priorities this year and beyond. We are well positioned to take advantage of the recent gold price strength given our size, cost profile and our track record of delivering exploration, organic growth and low cost production. Now that we have a healthy balance sheet, we can prioritize shareholder returns in this high gold price environment and unlock more value for our shareholders. I think what is evident from this final slide is that despite the strong recent share price outperformance, Endeavor still offers a compelling valuation relative to both our gold peers and the broader market, an enviable position to be in as we start to see increased generalist interest returning to the sector.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Thank you once again for joining us. We look forward to keeping you updated on our progress. And with that, I'll open up the line for any questions. Thank you.

[Operator]

Thank you. We are now going to proceed with our first question. And the questions come from the line of Ruvees Habib from Scotiabank. Please ask your question.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Thanks, operator. Hi, Ian and our Endeavor team. Really congrats on a solid Q1. Great to see this kind of free cash flow, dollars 400,000,000 free cash flow generated in Q1. So congrats on that.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Couple of questions for me. You know, just starting off with Sabodala Musawah. You're currently conducting a technical review. Just wanted to see, you know, and and kind of understand, could this review impact Sabodala's twenty twenty five guidance? Or or this is more just kind of a general kind of a review for the overall mind plan? A little bit color on that would be great.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Yeah. Look, Avish, let let me ask, answer on behalf of Jerry. The the line is a little bit tricky in coming out of Senegal. The technical review is ongoing. We've already given our guidance, for the year.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

It's too early to say whether this will, increase output. You know, we put out previously a kind of an extended guidance over several years. And we did say that as a result of the review, if we saw more upside than it would be in addition to that which we've previously disclosed. But at this stage, I think it's too early. We're obviously, we're hopeful that we could improve.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

But irrespective of that, I think you can already see, that, Savodala is motoring strongly, towards achieving, even the upper end of its current guidance. Perfect.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Thanks for that, Ian. And then just, again, in terms of longer term, obviously, you know, discussions are to get, you know, Sabodala Masawa back up to that 350,000 ounces plus, you know, is this coming from just purely on additional source oxide, any sort of operational improvements? Any any kind of color on that would be great as well.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Yeah. Again, Ovis, you know, the the buildup to, you know, should we call it a a slightly higher but more sustainable level of performance is gonna be a combination of many factors. You know, one is general improvements, in recoveries, improved throughput, the identification of better quality material, as well as an increase, in underground mining activity, which enables us to source higher grade material. And obviously, you know, for the same throughput, you know, that gives us the advantage So it's not any one particular factor.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

It's a broad range of initiatives. And part of the the technical review that we're doing is to actually help us identify what is the optimal, balance of, of those initiatives that will give us, the right sustainable blend, and that's what we're doing.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Okay. Thanks for that, Ian. And and just kind of moving on, sorry. Go ahead.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Yeah. And and really, you know, what we'll do, we'll we will be in a position, at the the the q two results. We'll be in a much better position to give you, you know, a little bit more sort of granular detail. It's still a little bit too early yet.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Okay. Look forward to that. Just moving on to exploration then, Saith, then just, you know, obviously, you've had in your team, exploration teams had great success at, SAPU. Is the current focus in 2025, you know, kinda increasing the confidence, increasing the size of Asapo? Or, Ian, do you have another Asapo in in your back pocket that you can start talking about?

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

I wish.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

No. Look. I mean, all along, we said that, you know, we believe that this is a very, very, you know, interesting piece of of real estate. The focus, during this phase of the DFS, really is very much on firming up the initial, proposed mining area, to make sure that, the, you know, sort of the first couple of years of our mining profile for the project will deliver what we think it's going to deliver. So there is a lot of effort that's going into that.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

But running in parallel with that is looking at some of the the, should we call it slightly wider, exploration opportunities, including Parler. And we do believe that that will help us ultimately grow, the the global resource in and around this district, whilst the DFS at the moment is really just focused on the predefined pit that, you know, from previous presentations that we've made. But do I believe that there is more to come from this area? Unquestionably. It's a it's a target rich area.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

And over time, obviously, we'll we'll realize what it can what it can deliver.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Perfect. Thanks for that, Ian. And then and then, Ian, just, there were a couple of comments made by the, Burkina Faso, Prime Minister earlier this week. Any thoughts, color you can provide on the PM's comments and and kind of, you know, how you're looking at Burkina Faso as a as a whole?

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

I I I think in fairness, Obese, you know, the the comments that have been made are nothing other than a regurgitation of comments that have been made previously. They're not new. They're not not additional. So in in many respects, you know, there's no sort of real, real surprise there. You know, this is a country that needs to get as much cash in as it can.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

You know, we are supportive of the government to trying to, you know, to make sure that this is a a good operating environment. So the only change to the previously mentioned, mining code that was published in the middle of last year is that you will recall that previously, they said that they would allow existing mining conventions to roll out before they imposed, the additional 5% of free carry. What we have seen recently is suggestions that they will, they would like to accelerate that. We've looked at that. And to be honest with you, over and above, what we already know, you know, it's it's inconvenient.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

They bought it, they're talking about this, but the actual impact is not huge.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Got it. Thanks for the follow-up.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Probably somewhere in the order of about 1% of any group NAV would be the impact.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Okay. Appreciate that, Ian. And that's it for me. Thanks for taking my questions, and congrats on a solid quarter.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Thank you, Eves.

[Operator]

We are now going to proceed with our next question. The questions come from the line of Alain Gabriel from Morgan Stanley. Please ask your question.

[Alain Gabriel, Analyst at Morgan Stanley]

Yes. Thank you for taking my question. I have a couple of them. The first one is on capital returns. And if I take your capital returns run rate, dividends and buybacks and annualize it, I get close to $385,000,000 for 2025, which is yielding around 6%.

[Alain Gabriel, Analyst at Morgan Stanley]

Your free cash flow yield is close to triple that yield at the moment. And your net debt is far below the net debt target that you have set for the group. So given the room to maneuver, is it fair to expect some upside to these run rates, I. E, an accelerated buyback or more special dividends on a go forward basis in 2025 itself? Thank you. That's the first question.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

I'll ask our master of coin to answer that question. Guy?

[Guy Young, Executive VP & CFO at Endeavour Mining]

Perfect, Julian. I think your the structure of the question, we need to put a couple of things into perspective. You heard Ian a number of times during his presentation talking about the prioritization of shareholder returns. So I think it's important that we reemphasize that. I think I would also like to reemphasize as a management team, we like to do what we say we were going to do and that we have done. So we've seen the cash flow inflection points.

[Guy Young, Executive VP & CFO at Endeavour Mining]

We've seen the deleveraging of the balance sheet. And now we are in a position, as Ian said, to prioritize shareholder returns. I think if you look at what we've done historically, and probably more importantly from a data point perspective, what we've done year to date, the simple answer to your question is yes. Because if we've already returned at the end of Q1 in terms of both committed plus share buybacks, what we did during 2024. I think we are clearly trying to show that our full intention is to provide a higher degree of supplemental returns to shareholders in line with the results and the deleveraging that we're seeing.

[Guy Young, Executive VP & CFO at Endeavour Mining]

I do, though, come back to the point that I think I made at the last results presentation, and that is as long as we've got a supportive gold price environment, we are producing this kind of cash flow, And given now that we are in this debt delevered position, it would be at that point in time that we can come forward and start talking about a supplemental set of returns, which we still maintain will be a combination of increased dividends and opportunistic share buybacks. We're at 400% from a share buyback perspective of where we were last year. Indicatively, therefore, I think you can count on us ensuring that we make some superior and supplemental shareholder returns during the year.

[Alain Gabriel, Analyst at Morgan Stanley]

Thank you. Thank you, guys. That's very clear. And my second question is on the VAT receivables. You've done a small impairment of the receivables in Burkina Faso during the quarter.

[Alain Gabriel, Analyst at Morgan Stanley]

Can you give us some color on whether there are more problematic VAT receivables across the group? And how you are planning to resolve these challenges with the governments in the regions where you operate? Certainly.

[Guy Young, Executive VP & CFO at Endeavour Mining]

So Helane, it's a good point. There are kind of two things that have grown our VAT balances. The first, yes, is ongoing Burkina receivables and against which we've taken, as you say, a small increased provision. That increased provision is currently simply being done on a formulaic basis. So what we agreed with the Board is that we would take what we believe to be a fairly conservative position, given that the counterparty is the state. But we would take a relatively conservative position of where we saw aging of VAT receivable balances going beyond a certain period, we would take a provision against those. So what's happened is during the period, we've seen some further aging and we've done exactly the same as we did at the end of the year, applied a formulaic provision, and that's essentially what you've seen is that increase in aging. Got a number of things we're trying to do with Burkina in order to try and get the receivables in. It is a broader conversation with the state, but something that I think we'd be able to report back on with a degree of success during the year. The second element of the VAT increase is slightly easier to talk through, and that's at Lafiguet.

[Guy Young, Executive VP & CFO at Endeavour Mining]

So because Lafiguet is still relatively new, we've registered with the state, we are a VAT entity, and it is a buildup that has taken place, and it's roughly $21,000,000 at the end of the quarter. We haven't seen reimbursement yet, but that's fundamentally just a part of the time cycle. So that Lafiguet VAT balance will inevitably come down as we move through the rest of 2025.

[Alain Gabriel, Analyst at Morgan Stanley]

Thank you. You. Very clear.

[Operator]

We are now going to proceed with our next question. And the questions come from the line of Carey MacRury from Canaccord Genuity. Congrats

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

on the strong quarter. Maybe a couple of other questions for Guy. Obviously, cash balance has built up a lot. Is it safe to assume, or are you targeting to fully repay the credit facility this year?

[Guy Young, Executive VP & CFO at Endeavour Mining]

I'm really sorry, Kerry. I didn't catch the second part of that. I I I got the cash balance increased. And and sorry?

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Yeah. Just wondering if, you know, you're in a position to repay the credit facility. I wonder if that's something you're targeting to do this year and and what the cost of your credit facility is, if you can remind us.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Certainly. So if if credit facility, if I'm talking about the same thing, our revolving credit with the syndicate banks. So yes, we have got a building cash balance, and we haven't used that to pay down, which is a valid point. We would certainly intend to do so by the end of the year. What we've got though is the seasonality in our cash flow and our ability to bring the cash from our onshore operating entities up to the holding company level, which frankly mirrors some of our withholding tax and tax payment seasonality that we've guided to already.

[Guy Young, Executive VP & CFO at Endeavour Mining]

So during Q2 and Q3 is when we effectively declare, have approved at a local level and then move the cash up. As soon as that cash is at a central holding company level, we will use it to pay down the RCF.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

And can you remind us what the interest rate on the RCF is?

[Guy Young, Executive VP & CFO at Endeavour Mining]

We we're roughly running on general because it slightly depends on on our gearing level, but we're running at at around 7%.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Okay. And then, in terms of tax, I mean, that's a good segue to my next question. I appreciate the annual tax guidance, but given your comments around q two, q '3, just wonder if you can give us a bit of clarity on what we should expect for Q2 in particular, like a range or what percentage of the annual should be coming through Q2.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Yep. Carrie, if I go back probably just to the guidance I offered at the year end results because they haven't fundamentally changed. So we're expecting to pay a cash tax of around $350,000,000 to $450,000,000 this year. And of that, about 80,000,000 to 90,000,000 is going to be withholding taxes. And of the total, around 55% is going to be in Q2.

[Guy Young, Executive VP & CFO at Endeavour Mining]

So it is a very significant proportion, obviously, of our total tax, all payable in Q2, which gives me the opportunity of reinforcing something I said in the slides, but if you'll bear with me. Our Q2 cash flows are going to be significantly impacted by this. If you multiply out those percentages and you think about some of the other things that are going to be calling on us in Q2, I just want to make sure that everyone understands our Q2 cash flow is going to be very different to Q1, predominantly driven by the cash tax payments that we're discussing now.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Great. That's very helpful. And then maybe one question for Jari, if I can. Just on Hounde, you mentioned the grades declining. Just wondering if you can give us some sense of what grade we should be expecting in q two and then for the second half at Hounde.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Thank you. Thank you, Carrie. Obviously, as I mentioned during the presentation earlier, we have accelerated the mining of carried pit, carried pump pit, where we've always historically high grade. So we are mining that pit out before the wet season, and that we're moving more towards the Karri West Vendaloo Main and Vendaloo North, whereby we have an average lower grade than Karri Pit that we've been seeing so far. So that's really where we're seeing that lower grade.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Similarly, at Sabodala Massawa, I think we mentioned that earlier, but this is all part of our budget mining sequences. So though we're seeing a slightly lower average, grade, towards quarter two, quarter '3, it is no way impacting, the production profile that we have. And all sites still again are, on track to achieve the full year production. And what we've seen as well, though we've seen that slightly lower, average grade, we've seen higher recovery as well. So it one offset the other.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

So in terms of the grade, any any color you can give us on what we should what we should be modeling for q two in particular?

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

I I don't think it will significantly change, from what we've been communicating. If we looked at Lafiguet, we might be talking about 1.6. Sabadola, it would not have changed. What we're seeing is Sabadola is definitely more into the recovery, whereby especially for the BIOX, we're seeing the lower 70, and we'll be expecting more into the high 70 more towards the end of the year. But averagely, cross border sites, again, is slightly below, what we've seen in quarter one, but it's not impacting anything.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Okay, great. That's it for me. Thanks, Jari and Guy.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Thanks, Kevin.

[Operator]

We are now going to proceed with our next question. And the questions come from the line of Jason Fairclough from Bank of America. Please ask your question.

[Jason Fairclough, Managing Director at Bank of America Merrill Lynch]

Good afternoon. Thanks, everybody. And again, nice quarter. Hey, I really like your relative valuation charts on Slide 13 and Slide 35. So the shares look extremely cheap on all these metrics despite the gushing free cash flow, good growth, and actually pretty reasonable operational execution lately.

[Jason Fairclough, Managing Director at Bank of America Merrill Lynch]

So I guess my question is, why do you think that the shares are so cheap? And if part of the question is investor angst on West Africa, any thoughts on why headwinds facing your local peers shouldn't matter as much to you?

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Jason, thank you for the, for the advert. The the check is in the post. Look. Yes. I I think it is fair to say that the the last year we could justify because of the, so call it the, the upheaval that took place, particularly at the beginning of twenty four.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

I think it was understandable, you know, people sort of stepped back and said, okay. Fine. Get the ship settled. Let's see what you can do. You know, then we'll sort of come back in again.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

What we have been seeing, I think it's fair to say over the last three to four months, is a growing confidence that, Endeavor's performance is, starting to get back to where people would expect it to be. Confidence is growing in the stock. And certainly over the last, you know, month or so, you know, we're seeing us close the gap in terms of relative valuation, with regard to to our peers. I think that, and the fact that we now have several, quarters where, you know, strong cash flow you've seen from q one twenty four every single quarter, you know, the, the the free cash flow has grown. We've we've seen the impact of our, initiatives that we've put in place.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Importantly, despite the fact that the the gold price has gone up, you know, we have not allowed any complacency to set into the group. We're making sure that we remain resilient, you know, that our cost profile, remains low, and shareholders will genuinely see the benefits, of an expanding margin, which is perhaps, you know, not some of the characteristics that people have seen in previous sort of upcycles in the gold sector, you know, in this particular industry. And we've we've very focused on making sure that we do that. And I think, you know, we're getting to the stage now where people are beginning to understand and believe in the the thesis that we've put out, and we're starting to see shareholder, positive shareholder response to that. With regards to, you know, what happens to our peers, I think it it is you know, it's a fair comment.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

I I guess you're specifically referring to Burkina Faso. I would say that certainly over the last, the last year or so, you know, I've I've met with, you know, the very senior people, in that part of the world. We have got a very good working relationship with, the the government. We have good dialogue. We've established that, not just from my level, but throughout the organization and importantly, with our people, on the ground.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

We can open up, dialogue with them, you know, in private. We we we make comments. We have robust discussion. And in fairness, you know, they are listening to us. Does that mean that we're immune from things that may happen to others?

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Not necessarily, but I do believe it gives us a chance, you know, to to help influence, the debate and show that we are, a good corporate citizen in the country. We want to be there for the longer term. And we've shown that despite, you know, the various phases of ups and downs that have taken place, in, in Burkina Faso, we have consistently, performed well there, and we've consistently given, good returns. And at the end of the day, you can't argue against returns, and people will eventually get it and understand. And if they don't like West African exposure, well, they shouldn't be, in our stock anyway, but we have historically shown that we have been able to manage the, the exposure to West Africa and have consistently outperformed, by being well positioned in that part of the world.

[Jason Fairclough, Managing Director at Bank of America Merrill Lynch]

Okay. Thanks a lot for the color, Ian. Maybe just a quick follow-up if I could. So we saw some news that AngloGold Ashanti, a company you may be aware of, was selling out of some projects in West Africa. I'm just wondering if those would be the sorts of projects that you would have done due diligence on.

[Jason Fairclough, Managing Director at Bank of America Merrill Lynch]

And, again, I I guess, thoughts on M and A given that you seem to be able to create value from West African assets, in a way that others can't.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

I I I saw the the release today. I I have to say, the impression I got that it wasn't actually a selling out of assets. It was actually an expiration asset swap where Resolute acquiring some, smaller assets in, in Cote D'Ivoire. And in exchange over time, Resolute would give something over, to, to AngloGold. And I actually think that's very healthy, you know, where, you know, people's relative strength I mean, obviously, AngloGold are very strong, in Guinea through, through Siguiri.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

So it kinda makes a lot of sense that people are looking at the industrial logic of swapping assets and putting assets into the hands of potentially the the the better people. As far as Cote D'Ivoire is concerned, you know, we've covered, you know, most of the country. We know what is and what isn't available. So I think you can guess from that that we have looked, at these assets. But more importantly, you know, we've got, you know, two really good operating assets already in the country.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

We're gonna have a third one, which is truly world class. There's nothing in West Africa that matches up to, to ASAFU, at this stage. You know, we've got more than enough exposure there. We wouldn't necessarily need more and certainly not something that doesn't look as if it would, be a better option than what we've already got operating in that part of the world.

[Jason Fairclough, Managing Director at Bank of America Merrill Lynch]

Okay. Thanks a lot for the color, and we'll see you in Barcelona in a couple of weeks.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Thank you. Looking forward to it.

[Operator]

We are now going to proceed with our next question. And the questions come from the line of Anita Soni from CIBC.

[Anita Soni, Managing Director at CIBC Capital Markets]

Most of them have been asked and answered, but I wanted to follow-up on royalty rates. You talked about Burkina and some of that that's going on there, but I wanted to talk about Cote D'Ivoire. Have you had any recent conversations with the government about their royalty rates? My understanding is that they're looking at increasing the royalty above the 1,900 cap that they have.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Yeah. Anita, I mean, you know, regularly, governments look at what they've got. You know, they they sort of start asking the questions. There has been, some suggestions from them that they would they've entered into discussions. They'd like to see a slightly higher royalty rate.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

That debate and discussion has taken place, at the chamber of minds. There's nothing definitive, as yet, until such time, as there is any final conclusion. You know, we continue to operate under the existing, under the existing rules. You know, but one has to say that the trend, for for taxation globally, you know, not just here in West Africa is is going up. So it's not, you know, it's not to be surprising, but, you know, we do have in our agreements, you know, we've, we we have stabilization agreements.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

So this would likely, apply more to new operations as opposed to existing operations. But that still has to come out, you know, in the discussions. And as I say, there's nothing definitive which has come out as yet.

[Anita Soni, Managing Director at CIBC Capital Markets]

Okay. Can you let us know what the parameters are that they did of the discussions? I mean, I I was assuming that we just sort of ratchet up at the same kind of trend line, on a you know, as every hundred dollars per ounce than, you know, as we get up to the higher levels and or was there kind of an an escalating factor in?

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Yeah.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Know, so hear what I say. At the moment, there's open discussion. You know, there's nothing definitive. It would be, I think, inappropriate to have any discussion around or speculation around what may or may not happen Until you know, once we know anything definitive, then obviously we'll come back. At this stage, you know, we don't have anything definitive to, to pass on.

[Anita Soni, Managing Director at CIBC Capital Markets]

Alright. Thank you. That's it for my question.

[Operator]

We are now going to proceed with our next question. And the questions come from the line of Wayne Lam from TD Securities. Please ask your question. Your line is open.

[Wayne Lam, Director - Mining Research at TD Securities]

Hey. Good morning, guys. Just wondering at Sabodala, once we expect the main pit to be mined out and ready to deposit tailings, and then have you guys received the permitting there? And then and just wondering on the underground, what the permitting would requirement would be there as well.

[Ian Cockerill, CEO & Executive Director at Endeavour Mining]

Okay. Wayne, I'll I'll ask, Jarria to to you you picked up the question there, Jarria. Can you answer it, please?

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Yes. Would you mind just maybe repeat again? The line was a bit unstable when you asked it.

[Wayne Lam, Director - Mining Research at TD Securities]

Sure. So just, two questions on Sabodala. One is when you expect the tailings to be mined, sorry. When you expect the main pit to be mined out and ready to deposit tailings? And, on permitting, have you received the in in pit tailings deposition permit there and what what the permitting would be on the underground?

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Okay. Thank you. So for the main pit, of course, we're referring to Sabodala Pit. As we have previously communicated, the plan is to mine Sabodala out by end of quarter two, into quarter three. So, normally, this main pit should be ready for, receive the the deposit, once we then finalize all the infrastructure construction.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

In terms of the permit, we are, clear on that with the authorities. We've received all the necessary permit that we need to receive. The few still discussions ongoing, with especially with the communities. We do not foresee any obstacle there. I think this is a normal discussion that you have.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

So we do expect to have this last validation as well, into quarter two. We're putting a target for ourselves to have all this concluded, before end of quarter two, this year. In terms of the underground, we are progressing very well. As I mentioned earlier, we are accelerating the DFS, which is envisaged by end of this year. Again, it's really commencing the underground in end of this year into 2027, whereby we'll have a full development into 2026.

[Djaria Traore, Executive Vice President of Operations & ESG at Endeavour Mining]

Sorry. And then the first ounces will be in by 2027. So we're looking at a total endowment across the two deposits of Curacunda and Guluma, to be approximately 500,000 ounces at an average grade of five gram. Of course, purely nonrefractory, fresh ore, which definitely will, boost our CIL throughput as well as the production.

[Wayne Lam, Director - Mining Research at TD Securities]

Okay. Great. And then maybe just for Guy. Just looking ahead to the $500,000,000 in notes due next year, is there a significant upstreaming cash need to make that payment? And at what point would that take place?

[Wayne Lam, Director - Mining Research at TD Securities]

Just wondering how to think about timing of taxes for that.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Thing. We'd look to roll over, so we're not going to be having to pull up cash to do so. Our intention would be to refinance it with a similar sized bond. The timing of which you obviously know, but October 26 is the end of our current bond. We would look to try and refinance obviously between now and then.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Ideally, we will look to get that away before it becomes less than twelve months due and falls into current. So somewhere between now and October of this year would be our ideal window.

[Wayne Lam, Director - Mining Research at TD Securities]

Okay, great. Thanks. Yes, that's all for me.

[Operator]

We are now going to proceed with our next question. And the questions come from the line of William Dobie from Berenberg. Please ask your question.

[William Dalby, Senior Associate - Equity Research at Berenberg]

Hi, good afternoon and congrats on great start to 2025. Just a couple from me. First for Guy, on tax expense again. Just wondering if you're able to share what gold price assumption you've got factored into the upper end of that $350,000,000 to $4.50 euros range for the year? And what impacts that would be on that kind of guidance range should the gold price stay at current levels? That's the first one.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Sure. The tax guidance, we'd split it into two, importantly. So our corporate income tax, which makes up the bulk of that tax guidance, is effectively fixed because we're paying last year tax now. So the majority of that is fixed. The withholding tax may flex slightly.

[Guy Young, Executive VP & CFO at Endeavour Mining]

So we've tried to build in a reasonable range from 80 to 90 to cover gold prices and some flex that we would have in terms of upstreaming. But to actually answer your question, our assumption is 2,600 gold. But we've also taken into consideration our Q1 actual realized. So we've done a forecasted cash flow on Q1 actual plus 2.6 for the remainder of the year and used that to estimate the dividends and ultimately the withholding tax.

[William Dalby, Senior Associate - Equity Research at Berenberg]

Okay. That is helpful. Thank you. And then second, just on working capital. Apologies, I didn't catch all the reasons for the working capital build for the quarter.

[William Dalby, Senior Associate - Equity Research at Berenberg]

I'm wondering if you could just quickly run through those again and then maybe steer a bit on your expectation for working cap moves for the remaining quarters. Thank you.

[Guy Young, Executive VP & CFO at Endeavour Mining]

Sure. So 98,000,000 of working capital outflow roughly broken down into an accounts payable swing of 48,000,000. That is largely as a result of an unwind in the buildup and late invoicing at the end of twenty twenty four. So consequently, we would expect that now to be relatively stable over Q2 and Q3. And then we would expect to see a slight build again in Q4.

[Guy Young, Executive VP & CFO at Endeavour Mining]

But the 48,000,000 negative in Q1 should not be repeating throughout the remainder of the year. The other element of the 98,000,000 is inventory, which is roughly $44,000,000 of that total. And there, that inventory build was made up predominantly of GIC, Golden Circuit, as well as some stockpile build, predominantly at Hounde, Ity and Lafiguet. The GIC build is largely as a result of the level of production and performance we saw in Q1, so not necessarily a bad news story. But we should be able to start bringing that GIC overall balance down as we look through our process planning for the remainder of the year.

[Guy Young, Executive VP & CFO at Endeavour Mining]

So certainly no continued increase in outflows. And with regards to the stockpile, this is largely us pushing mining performance ahead of the wet season, which we've mentioned during the call. So again, this should be something that could be managed down between now and year end. The last element of the working last capital is the VAT build of roughly 10,000,000 And the element that we are going to be able to reduce is the $21,000,000 build at La Figue. The more problematic one is the one that we circled back on already, which is the Burkina Faso. And there, we are looking to try and see what we can do. But that arguably would be something that might stick. Overall, our working capital outflows for Q2, Q3 and Q4 will be lower than they have been in Q1.

[William Dalby, Senior Associate - Equity Research at Berenberg]

Very helpful guys. Thanks very much. And yes, congrats again on the great quarter. Cheers.

[Operator]

This concludes today's conference call. Thank you all for participating. You may now disconnect. Speakers, please stand by.

Participants

Executives

• Jack Garman, VP - IR
• Ian Cockerill, CEO & Executive Director
• Guy Young, Executive VP & CFO
• Djaria Traore, Executive Vice President of Operations & ESG

Analysts

• Ovais Habib, Precious Metals Analyst at Scotiabank
• Alain Gabriel, Analyst at Morgan Stanley
• Carey MacRury, Equity Research Analyst at Canaccord Genuity Group
• Jason Fairclough, Managing Director at Bank of America Merrill Lynch
• Anita Soni, Managing Director at CIBC Capital Markets
• Wayne Lam, Director - Mining Research at TD Securities
• William Dalby, Senior Associate - Equity Research at Berenberg