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Endeavour Mining

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September 16, 2024 at 10:20 AM (MDT)|Broadmoor Hotel & Resort

Ian Cockerill

Chief Executive Officer

Ian Cockerill was appointed Chief Executive Officer of Endeavour in January 2024, having joined the Board as Senior Independent Director in 2022 and been Deputy Chair since September 2023. He has nearly 50 years of experience in the global natural resources industry, having previously been Chief Executive Officer at Gold Fields Ltd, and Chief Executive Officer at AngloCoal, a subsidiary of the Anglo American group.

Mr Cockerill was the former Chair of the BlackRock World Mining Trust and also of Polymetal Plc. He was the former lead independent director of Ivanhoe Mines Ltd and a non-executive director of Orica Ltd. He is associated with two private businesses as the non-executive Chair of Cornish Lithium, and a non-executive director of I-Pulse Ltd.

He holds a BSc (Hons) degree in Geology from London University, an MSc in Mineral Production management from the Royal School of Mines and the AMP from Templeton College Oxford.

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Good morning, everybody. And welcome here today. I'd just like to start this presentation with a short video. Why is this not working? Here we go. Obviously, lawyers insist we have to show you this, but I'd just like to show you this video. There's no sound. Thank you. I've now been in this role for nearly nine months and it's really pleasing to stand in front of you today and say that our strategy, the execution of our strategy is continuing. Most notably, we've actually delivered on our two growth projects, the Sadana Biak project, as well as the mine that we bought into commercial production that we announced last week. Those projects increase our size, maintain our sector leading cost profile and increase our production, visibility into the future. And importantly, as you can see on this one pie chart here on the right hand side has really very effectively rebalanced where we're getting our production from in the three countries in West Africa. We're certainly now at a stage where we can start focusing on delivering our free cash flow. And as we move forward into a phase of returning that cash to shareholders during a period of little to no growth capital expenditure, we're going to increase our shoulder returns above the minimum levels that we set out in July through supplemental dividends and buy backs as well as improving our leverage down to about 0.5 net debt to adjusted ed by the end of 2025. And in so doing, we're then going to be really well positioned to build our next growth project. That means that we can sustain our attractive shelter return program over the longer term. Now, the way we run our business, we run it as a kind of a hub and spoke. But you can see here, we've got five mines operating over three countries. Senegal Cote d'ivoire and Burkina faso. We like West Africa. It's been good to us historically, it's one of the largest gold producing regions in the world. It's highly prospective. It's found 67 million ounces of gold over the last 10 years, which is much more permissive than you've seen from anywhere else in the world. And for this year, we're going to continue with our track record of delivering. We're going to be delivering as a group at the lower end of our production guidance and at the upper end of our cost guidance and that's primarily driven by a stronger performance in the 2nd 2nd half, I think where we are in the current gold price environment. It is pretty important to show how we stack up against our peers. We are still a top 10 global pure gold producer, but we also have significant growth optionality ahead of us. We are also one of the lowest all in sustaining cost producers that ensures that we do enjoy high margins. That means that we're capable of generating very significant free cash flow, not only in this higher gold price environment, but also in any gold price environment that's coming out. We've built a portfolio that is resilient, irrespective of the gold price that we're in. And you can see in terms of valuation, given our free cash flow inflection that's coming through this year. We're certainly going to be looking at much higher cash flow into 25 which really means that we're at a very, very attractive valuation point at the moment. Let's look at our strategy that's focused on building and maintaining a high quality portfolio that we are a trusted partner with our stakeholders and that we have a strong social license to operate. How do we do this? Well, key to our strategy is our portfolio and I've identified four key pillars that we're going to leverage to make sure that we can execute our strategy and maintain high quality positioning. Firstly, we are, we have and we're going to continue even more to invest in our people, the right people with the right skills, the right training in the right jobs at the right time and with the right pipeline of talent coming through is absolutely fundamental to us being able to continue to deliver on our operations. We have some highly talented people in endeavor. But the important thing is we've got to make sure that we continue to have that quality. We're going to continue to deliver on our operational excellence building on our track record of delivery against guidance. But even though we've done well, historically, I believe that there's still room for improving productivity in our operations as well as enhancing performance or the recoveries coming out of our plants. We've always been an active manager of our portfolio and we're going to do that to continue to make sure that we have a good portfolio of long life, high quality, low cost assets and importantly making sure that we're going to continue with our very, very effective exploration program that has been great on the green fields side. There's going to be a slight bias now towards looking at the brown fields opportunities. We feel there's lots of upside our minds and we're going to be doing that in addition to the green fields side. And we think that these key pillars will help us continue to build and grow this quality of portfolio. Let's have a look at some of these things in a little bit more detail now. Well, we do operate a hub and spoke policy. We run our West African operations out of Abidjan office. We've got most of our key technical staff based there so we can leverage off all of our minds because it's very easy to get anywhere from there. Movement of people is very straightforward. And also what is critical to us is maintaining good government relations. You work in Africa, if you don't have good government relations, it's very, very difficult to fall foul. And I think our public affairs team do a great job and this is I think key to why we've been able to deliver over the last 11 years. Firstly, let's look at the operation excellence. We are really pleased that we've now achieved commercial production at sever Dala Biox, as well as the Lafi Greenfield projects. Both of these projects will help us deliver stronger operating performance and help us keep a lid on our cost profile whilst stretching out the life of endeavor at Samad Dala, we completed the ramp up from first gold in less than four months. This particular plant is operating now at 80 per cent of its name plate capacity and we've got recoveries at the moment, at 70 per cent. I never had any doubts that the Biox plant would go well. But the big issue that we had initially when it got up and running was excessive amount of transitional ore coming out of MSA that wasn't floating very well. So we weren't getting the mass pool because there was insufficient quality of fresh ore that is now changing. The Massawa Pit is now predominantly into fresh ore and we're seeing improved mass pool recovery coming out. So I would start to see better performance coming from the Biox plant in Q four and going strongly into 25. Lee has done really well. We're currently at 70 per cent of nameplate capacity. We're getting recoveries of over 95 per cent. So we're really pleased with these two projects and this really cements our history that over the last 10 years, we have delivered five projects on time and on budget with no cost overruns. I think that's a spotless track record that we're extremely proud of, but it doesn't end there, Hyundai in the period that we actually had the Hyundai mine up and running. We've doubled the mineral Mineral Endowment, plus that plant is now operating at 80% higher than its original nameplate design. Similarly at it, we have also doubled our mineral endowment and that plant is operating at 90 per cent above the original nameplate capacity. I think for me, this is a strong recommendation of the strength. Firstly, of our exploration teams and their ability to replenish our asset base. But more importantly, the quality of our in house projects team, in terms of portfolio management, you all know that we are particularly keen to have the projects in that bottom right hand corner, longer life, low cost or have our projects moving in. You can see here, the pink projects are the ones that we have sold. We've actually got rid of those including one and Mung, the sale to Liam did not go as well. It was originally planned. However, the government of Burkina Faso has stepped in, they have become the purchaser of these assets, not I stress through nationalization of the asset, but they've been a strong commercial buyer of these assets. And I would like to thank the government of Burkina Faso who've shown their willingness to present Burkina as a country that despite certain views in the marketplace is a place that welcomes inward investment. The future of endeavor is though dependent upon an attractive organic pipeline from our exploration through to looking at our various projects and then ultimately converting those projects into mines. At the moment, we've had a large number of projects that filter down at the moment. The key project that's in the pipeline is Tander I GWE the Asaf mine, that's the pre fees will be completed at the end of this year will be releasing that to the market. But also in addition, what we call the it Doughnut and I'll expand a little bit on those two, those two projects over the next few slides, but it doesn't end there. There's even more to come. And that is that we're seeing incredibly good brownfield's deeper potential, particularly at Hyundai as well as Sad Dala. So along with our project pipeline and then also the brownfields opportunities that we're seeing on our existing mines. We're really quite excited about what we're seeing and on our exploration over the last sort of eight years, we have delivered just under 19 million ounces at $25 an ounce unparalleled in the industry again. Great testament to what our exploration team can do and that led to Asa Asa, the Asaf project in Yellow. There is what we originally announced the resource on last year. What's really interesting is that in the past year, we've extended the strike length of the s by another 900 m, which is about a 30 per cent increase on the original strike length. It's open along strike, it's open at depth. But interestingly as you can see around here, some very, very interesting satellite deposits with some very interesting intersections all within reasonable trucking distance to the main infrastructure that will be built around as Saru, we're really excited about Sarfu and I think it's going to become a very important project within the endeavor profile, but it doesn't end there. I mentioned it before. If you look at the top left hand corner, you can see that was the reserve last year in 2023. And for those of you who are familiar with the London tube, when you go onto the trains there, they always say mind the gap, mind the gap and you can see the gap here in the all bodies. So we drilled the gap and what you see from that is not having only drilled the gap, how all these all bodies are now starting to coalesce into what we call the it doughnut. So this year major exercise. Looking at what optionality does this give us in terms of looking at a potential super pit, all the attendant benefits, economies of scale larger kit, reduced mining costs. Again, driving the asset making it sweat through productivity improvement. We are despite having built two mines, we are in a strong position. Look back to 2019 when we were coming off the building of Hyundai and it very, very high debt levels brought that down did very well in the the the twenties started to build the mine and the Bis plant coming up. We're now at an $800 800 million net debt peak debt. But that will start coming down with the cash flow that we see coming forward. But despite that spend, we still have been able to deliver strong returns. We have delivered over $900 million to shareholders over the period of 21 to 23 which is the first phase of our shareholder return program and that was around about 80 per cent above the minimum commitment that we made. We've now announced a further commitment for 24 and 25 that says we will deliver a minimum to shareholders of $435 million plus supplementary dividends over that as well as performance as gold price commands. That means that by the end of 2025 we will have delivered one point guaranteed 1.4 million from actual returns as well as projected returns. That's excluding any supplemental dividend that you heard earlier sector leading return. I would argue this is equally separate if not higher sector leading return as well as having a massive free upside call option on the gold price within endeavor. So to conclude, we have a lot of things to do in this year. The priorities you can see here operationally, we will deliver on our guidance. We've got the growth projects that we need to deliver to their full potential and beyond, we will give our shoulder returns, we will improve on our balance sheet. We will continue on our exploration program and there will be a few key events coming up over the years that you can look forward to including in particular the public announcement of the feasibility study on Assaf as well as we'll give a little bit more detail on the exploration update and what that means for the future of the group. With that. I thank you very much indeed. Thank you. Thank you. I thanks and


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