Industria
Endeavour Reports Q3-2024 Results
ENDEAVOUR REPORTS Q3-2024 RESULTS
Adjusted EBITDA of $317m • Free Cash Flow of $97m • Shareholder returns paid of $229m
London, 7 November 2024 – Endeavour Mining plc (LSE:EDV, TSX:EDV, OTCQX:EDVMF) (“Endeavour”, the “Group” or the “Company”) is pleased to announce its operating and financial results for Q3-2024 and YTD-2024, with highlights provided in Table 1 below.
Table 1: Q3-2024 and YTD-2024 Highlights from continuing operations
Continuing Operations excludes the non-core Boungou and Wahgnion mines which were divested on 30 June 2023. This is a non-GAAP measure, refer to the non-GAAP Measures section for further details. Excludes pre-commercial costs and ounces sold. Realised gold prices are inclusive of the Sabodala-Massawa stream and the realised gains/losses from the Group's revenue protection programme. From all operations; calculated as Operating Cash Flow less Cash used in investing activities Last Twelve Months (“LTM”) Trailing EBITDA adj includes EBITDA generate d by discontinued operations.
Management will host a conference call and webcast today, 7 November 2024, at 8:30 am EST / 1:30 pm GMT. For instructions on how to participate, please refer to the conference call and webcast section at the end of the news release. A copy of the Management Report and Financial Statements have been submitted to the National Storage Mechanism and will be filed on SEDAR+. The documents will shortly be available for inspection on the Company's website and at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Ian Cockerill, Chief Executive Officer, commented: “During Q3-2024 we continued to deliver against our strategic objectives as we successfully completed our growth phase, achieving commercial production at our two organic growth projects, which supported our strongest quarter of production this year and underpinned our transition to a phase focused on free cash flow generation.
On the operational front, we expect full-year production to be at or around the low end of the guidance range, while our all-in sustaining cost is expected to be above the top end of the range, due to higher royalty and power costs as well as lower production at the Sabodala-Massawa CIL operation. Despite above average rainfall early in the Q4, our performance is expected to be significantly stronger than Q3, supported by the ramp ups of our growth projects as well as increased production at the Houndé and Mana mines, in line with their mine sequences.
During the quarter, we completed construction and achieved commercial production at the Sabodala-Massawa BIOX Expansion and the Lafigué mine, with both projects ramping up in line with expectations and achieving nameplate throughput capacity during the quarter. At the top tier Assafou project, where the preliminary feasibility study is on track for completion in Q4, we continue to see significant exploration upside, both at the Assafou project, and on the wider Tanda-Iguela property.
We achieved a significant free cash inflection during the quarter, generating approximately $100 million of free cash flow, and given our strong outlook, we are now focused on shareholder returns and our balance sheet. We repaid $160 million of our revolving credit facility during the quarter, while our stronger earnings supported an improvement in our leverage, as we advanced towards our 0.5x leverage target. On shareholder returns, we paid our H1-2024 dividend of $100 million and we have now returned $229 million to shareholders this year through dividends and share buybacks. We will increase our focus on supplemental shareholder returns over the coming quarters.
Looking forward, we have visibility to organically grow the production profile to our 1.5 million ounce portfolio objective by the end of the decade, while maintaining best in class margins. We expect to outline our new outlook next year, which will underpin our continued commitments to disciplined capital allocation and delivering attractive shareholder returns.”
SHAREHOLDER RETURNS PROGRAMME
Table 2: Cumulative Shareholder Returns
OPERATING SUMMARY
Table 3: Group Production
Includes pre-commercial ounces that are not included in the calculation of All-In Sustaining Costs.
The Boungou and Wahgnion mines were divested on 30 June 2023.
Table 4: Group All-In Sustaining Costs
Excludes pre-commercial costs associated with ounces from the BIOX expansion project and the Lafigué mine. The Boungou and Wahgnion mines were divested on 30 June 2023. This is a non-GAAP measure, refer to the non-GAAP Measures section for further details.
FY-2024 OUTLOOK
Table 5: FY-2024 Production Outlook
Includes pre-commercial production ounces
Table 6: FY-2024 All-In Sustaining Cost Outlook
Excludes pre-commercial production costs and ounces
Table 7: YTD-2024 All-In Sustaining Cost Impacts
FY-2024 group AISC guidance was issued at a $1,850/oz gold price The realised YTD-2024 gold price, exclusive of the Sabodala-Massawa stream and the realised gains/losses from the Group's revenue protection programme, amounted to $2,321/oz. As previously disclosed, grid availability issues increased self-generated power costs across Burkina Faso and Côte d'Ivoire assets during the YTD-2024 period.
Table 8: FY-2024 Sustaining & Non-Sustaining Capital Expenditure
CASH FLOW SUMMARY
The table below presents the cash flow and net debt position for Endeavour for the three-month periods ended 30 September 2024, 30 June 2024, and 30 September 2023, and the nine month periods ended 30 September 2024 and 30 September 2023 with accompanying explanations below.
Table 9: Cash Flow and Net Debt
Continuing operations excludes the Boungou and Wahgnion mines which
were divested on 30 June 2023.
Free cash flow, net debt, and adjusted EBITDA are Non-GAAP measures. Refer to the non-GAAP measure section in this press release and in the Management Report.
Calculated as Operating Cash Flow less Cash used in
investing activities.
Cash and cash equivalents are net of bank overdrafts ($62.2 at 30 September 2024; $21.1 million at 30 June 2024; Nil at 31 December 2023; Nil at 30 September 2023; Nil at 30 June 2023; Nil at 31 December 2022).
Trailing twelve month adjusted EBITDA includes EBITDA generated by discontinued operations.
NOTES:
1) Operating cash flows remained stable with $254.8 million (or $1.04 per share) in Q3-2024 due to higher revenues and lower income tax payments which were largely offset by higher operating costs, royalties, gold collar and inter-quarter forward settlement outflows and a decrease in working capital inflows as well as the inclusion of a $150.0 million operating cash inflow related to the pre-payment agreement as detailed further below.
Operating cash flows increased by $82.1 million from $479.8 million (or $1.94 per share) in YTD-2023 to $561.9 million (or $2.29 per share) in YTD-2024 due to higher revenues, higher working capital inflows, lower exploration costs and the proceeds from the $150.0 million gold prepayment, partially offset by higher operating costs, increased royalties and cash settlements for gold hedges.
Notable variances are summarised below:
• Working capital was an inflow of $10.1 million in Q3-2024, a decrease of $34.9 million over the Q2-2024 inflow of $45.0 million. The inflow in Q3-2024 consisted of (i) a trade and other payables inflow of $49.6 million related to increases in supplier payables, royalties payable and payroll-related liabilities, partially offset by (ii) a receivables outflow of $31.5 million due to a build-up of VAT receivables, (iii) an inventory outflow of $4.8 million due to an increase in operational consumables at Lafigué and stockpile inventory at Sabodala-Massawa and (iv) a prepaid expenses and other outflow of $3.2 million related to the timing of payments.
Working capital was an outflow of $27.2 million in YTD-2024, a decrease of $20.2 million over the YTD-2023 outflow of $47.4 million, largely driven by an increase in inflows in trade and other payables, partially offset by an increase in inventory outflows related to a build-up of stockpiles and consumables at growth projects and an increase in trade and other receivables due to a build-up of VAT receivables.
• Gold sales from continuing operations increased from 238koz in Q2-2024 to 280koz in Q3-2024 due to higher group production in Q3-2024 and the timing of gold shipments at Sabodala-Massawa. The realised gold price from continuing operations for Q3-2024 was $2,506 per ounce compared to $2,322 per ounce for Q2-2024. Inclusive of the Group's Revenue Protection Programme (-$106/oz Q3-2024 impact) and London Bullion Market Association (“LBMA”) gold price averaging strategy (-$57/oz Q3-2024 impact), the realised gold price for Q3-2024 was $2,342 per ounce compared to $2,287 per ounce for Q2-2024.
Gold sales from continuing operations decreased from 799koz in YTD-2023 to 743koz in YTD-2024, following lower Group production in YTD-2024. The realised gold price from continuing operations for YTD-2024 was $2,321 per ounce compared to $1,915 per ounce for YTD-2023. Inclusive of the Group's Revenue Protection Programme (-$60/oz YTD-2024 impact) and LBMA gold price averaging strategy (-$28/oz YTD-2024 impact), the realised gold price for YTD-2024 was $2,233 per ounce compared to $1,910 per ounce for YTD-2023.
• Total cash cost per ounce decreased from $1,148 per ounce in Q2-2024 to $1,128 per ounce in Q3-2024 due to higher volumes of gold sold and lower processing unit costs reflecting improved grid availability across sites in Burkina Faso and Cote d'Ivoire partially offset by higher royalties due to higher revenue and higher unit processing costs at Sabodala-Massawa reflecting lower plant availability and utilisation during the quarter.
Total cash cost per ounce increased from $837 per ounce in YTD-2023 to $1,097 per ounce in YTD-2024 due to higher royalties, higher processing costs associated with an increased reliance on self-generated power, higher open-pit mining costs due to increased drill & blast (Houndé), grade control drilling (Houndé and Sabodala-Massawa) and longer haulage distances (Houndé, Ity and Sabodala-Massawa), lower volumes of gold sold, and a reduction in capitalised stripping costs (Houndé, Sabodala-Massawa and Ity), partially offset by decreased underground mining costs at Mana.
• Income taxes paid decreased by $98.8 million from $163.3 million in Q2-2024 to $64.5 million in Q3-2024 due largely to the timing of tax payments in Senegal, Cote d'Ivoire and Burkina Faso from our Sabodala-Massawa, Ity and Houndé mines, and a decrease in withholding tax payments related to the upstreaming of cash in the prior quarter.
Income taxes paid increased by $9.1 million from $270.0 million in YTD-2023 to $279.1 million in YTD-2024 due largely to the increase in taxes paid at Ity as provisional tax payments made in YTD-2024 are calculated from a higher FY-2023 tax base when compared to the prior year and higher withholding taxes paid due to an increased quantum of cash upstreamed compared to the prior year-to-date period, partially offset by decreased tax payments at Mana and Sabodala-Massawa due to lower estimated taxable profit.
Table 10: Tax Payments from continuing operations
Included in the “Other” category is income and withholding taxes paid by Corporate and Exploration entities.
As previously disclosed, on 26 April 2024 the Company entered into two separate gold prepayment agreements for a total consideration of $150.0 million in exchange for the delivery of approximately 76koz in Q4-2024. The gold prepayments secured $150.0 million of financing for a low cost of capital of approximately 5.3% and supported the Company's offshore cash position during its investment and de-levering phase. The prepayments are structured as follows:
• A $100.0 million prepayment agreement with the Bank of Montreal based on a floating arrangement for the delivery of approximately 54koz in reference to prevailing spot prices for the settlement of $105.1 million (inclusive of $5.1 million in financing costs) in Q4-2024. The value of the 54koz above the contracted $105.1 million reimbursement at the time of delivery will be returned to Endeavour as cash.
• A $50.0 million prepayment agreement with ING Bank N.V. is based on a fixed arrangement for the delivery of approximately 22koz for the settlement of $50.0 million in Q4-2024. To mitigate the Group's exposure to gold price associated with the delivery of ounces under the fixed arrangement prepayment agreement, Endeavour has entered into forward purchase contracts for 22koz at an average gold price of $2,408/oz due in Q4-2024, locking in a financing cost of approximately $3.0 million.
2) Cash flows used in investing activities decreased by $13.5 million from $171.4 million in Q2-2024 to $157.9 million in Q3-2024 due to proceeds of $29.8 million related to the sale of Allied Gold shares, the receipt of $25.1 million in proceeds related to the settlement agreement for the disposal of Boungou and Wahgnion (subsequent to quarter-end Endeavour received the remaining outstanding $5.0 million from the first $30.0 million tranche on 9 October 2024, with an additional $10.0 million received on 23 October 2024 related to the second $30.0 million tranche) and decreased growth capital expenditure related to closing payments for the Lafigué and BIOX growth projects partially offset by an increase in sustaining capital expenditure at Houndé (HME replacement) and Sabodala-Massawa (purchase of drill rigs for owner-operated grade control) and increased non-sustaining capital expenditure at Sabodala-Massawa related to the purchase of additional haulage fleet capacity.
Cash flows used in investing activities decreased by $93.0 million from $609.8 million in YTD-2023 to $516.8 million in YTD-2024 largely due to lower growth capital related to the timing of growth project payments, a $39.8 million inflow related to the sale of Allied Gold Shares, $25.1 million in proceeds received for the disposal of Boungou and Wahgnion mentioned above and a decrease in non-sustaining capital associated with decreased pre-stripping activities at Ity and Houndé, partially offset by increased sustaining capital at Houndé (waste development) and Mana (underground development).
• Sustaining capital from continuing operations increased from $21.6 million in Q2-2024 to $31.3 million in Q3-2024, largely due to increased expenditure at Houndé related to replacement of heavy mining equipment, at Lafigué due to classification of stripping to sustaining capital after the declaration of commercial production on 1 August 2024, and at Sabodala-Massawa due to the timing of purchases of new drill rigs.
Sustaining capital from continuing operations increased from $71.8 million in YTD-2023 to $82.6 million in YTD-2024 due to higher sustaining capital expenditure at Houndé related to increased stripping activity, and at Mana related to increased underground development and inaugural sustaining capital expenditure at Lafigué, partially offset by reduced expenditure at Sabodala-Massawa and Ity.
• Non-sustaining capital from continuing operations increased from $51.8 million in Q2-2024 to $68.9 million in Q3-2024 largely due to an increase at Sabodala-Massawa as spending on the Solar Power Plant optimisation initiative accelerated and at Lafigué related to the pre-stripping activities following the declaration of commercial production from 1 August 2024.
Non-sustaining capital from continuing operations decreased from $192.8 million in YTD-2023 to $162.0 million in YTD-2024 largely due to decreased expenditure at Ity due to decreased pre-stripping activities at Le Plaque and expenditure related to the Recyn optimisation initiative and decreased expenditure at Houndé due to reduced pre-stripping activities at the Kari Pump pit, partially offset by increased expenditure at Sabadola-Massawa related to the ongoing solar power plant optimisation initiative.
• Growth capital decreased from $93.4 million in Q2-2024 to $35.3 million in Q3-2024, as the Sabodala-Massawa BIOX® Expansion and Lafigué growth projects were completed during the quarter.
Growth capital decreased from $292.5 million in YTD-2023 to $227.4 million in YTD-2024 due to the timing of construction activities at the Sabodala-Massawa BIOX® Expansion, which was launched in Q2-2022, and the Lafigué development project, which was launched in Q4-2022.
3) Cash flows used in financing activities increased by $91.2 million from an outflow of $149.8 million in Q2-2024 to an outflow of $241.0 million in Q3-2024 largely due to $190.1 million in repayments of debt made during the quarter. Financing cash outflows in Q3-2024 included $190.1 million in repayments of debt including $185.0 million in repayment of the Company's RCF ($415.0 million drawn as at Q3-2024) and $5.1 million in repayment of the Sabodala Term Loan, payment of dividends to minorities of $74.9 million related to the upstreaming of cash, payments of financing and other fees of $15.4 million, acquisition of the Company's own shares through its share buyback programme of $8.2 million, and payment of finance and lease obligations of $5.6 million. Outflows were partially offset by $53.2 million in proceeds from long-term debt including $25.0 million drawn from the Company's RCF and $28.2 million drawn from the Sabodala-Massawa Term loan.
On 29 July 2024, the Group entered into a $28.2 million term loan with Ecobank, a local banking partner in Senegal, as part of the Group's strategy to progressively move its debt onshore to reduce leakages associated with debt service and repayments of offshore debt. During Q3-2024, the Group drew down the full $28.2 million and subsequently repaid $5.1 million. The term loan bears interest at an attractive fixed rate of 6.0% per annum, payable monthly, maturing in December 2024.
On 5 November 2024, subsequent to quarter end, the Group signed a new $700.0 million sustainability-linked Revolving Credit Facility (“RCF”) at the same favourable terms as the 2021 $645.0 million RCF that will be re-financed. The new RCF will bear interest at a rate equal to SOFR plus between 2.40% to 3.40% per annum based on leverage, in line with the 2021 RCF, and will have 4-year term with the potential for a 1-year extension. The new facility was coordinated by Citibank and comprises a syndicate of eight banks including Citibank, Bank of Montreal who acted as the Sustainability Co-ordinator, HSBC Bank, ING Bank, Macquarie Bank, Nedbank, Standard Bank of South Africa, and Standard Chartered Bank. The new sustainability-linked RCF integrates the core elements of Endeavour's sustainability strategy into its financing strategy, specifically climate change, biodiversity and malaria, with clear sustainability-linked performance metrics that will be measured on an annual basis and reviewed by an independent external verifier. For more details on the sustainability-linked RCF, please refer to the MD&A.
Cash flows used in financing activities increased by $105.5 million from an outflow of $197.6 million in YTD-2023 to an outflow of $303.1 million in YTD-2024 largely due a net inflow of $273.3 million in proceeds from debt in the prior period.
4) At quarter end, Endeavour's cash and cash equivalents, net of $62.2 million in drawn cash on bank overdraft facilities, stood at $251.8 million.
5) Endeavour's net debt position decreased by $1.8 million, from $835.4 million at the end of Q2-2024 to $833.6 million at the end of Q3-2024 and the net debt / Adjusted EBITDA (LTM) leverage ratio decreased from 0.81x at the end of Q2-2024 to 0.77x at the end of Q3-2024, reflecting the completion of the Company's growth phase and a transition towards a phase focused on de-levering and shareholder returns.
EARNINGS FROM CONTINUING OPERATIONS
The table below presents the earnings and adjusted earnings for Endeavour for the three-month periods ended 30 September 2024, 30 June 2024, and 30 September 2023, and the nine month periods ended 30 September 2024 and 30 September 2023 with accompanying explanations below.
Table 11: Earnings from Continuing Operations
NOTES:
6) Revenue increased by $149.1 million from $556.8 million in Q2-2024 to $705.9 million in Q3-2024 due to higher volumes of gold sales and a $184 per ounce increase in the realised gold price from $2,322 per ounce in Q2-2024 to $2,506 per ounce in Q3-2024, exclusive of the Company's Revenue Protection Programme (Gold collars and London Bullion Market Association (“LBMA”) gold price averaging strategy).
Revenue increased by $200.1 million from $1,535.3 million in YTD-2023 to $1,735.4 million in YTD-2024 due to a higher realised gold price for YTD-2024 of $2,321 per ounce compared to $1,915 per ounce for YTD-2023, exclusive of the Company's Revenue Protection Programme (Gold collars and LBMA gold price averaging strategy), partially offset by lower volumes of gold sold.
7) Operating expenses increased by $31.2 million from $241.2 million in Q2-2024 to $272.4 million in Q3-2024 largely due to the ramp-up of production at Lafigué and the Sabodala-Massawa BIOX® Expansion and the drawdown of gold inventory sold in excess of production. Depreciation and depletion increased by $19.4 million from $127.8 million in Q2-2024 to $147.2 million in Q3-2024 due to the commencement of depreciation and depletion of the BIOX plant and refractory ore reserves, coupled with inaugural depreciation and depletion expenses at Lafigué subsequent to commercial production declaration.
Operating expenses increased by $135.0 million from $578.5 million in YTD-2023 to $713.5 million in YTD-2024 due to increased processing costs across the Group, increased underground mining costs at Mana driven by higher volumes and increased mining costs at Ity, Houndé and Sabodala-Massawa, largely reflecting increased diesel consumption and increased drill and blast activities. Depreciation and depletion increased by $67.9 million from $315.8 million in YTD-2023 to $383.7 million in YTD-2024 due to the lower reserves bases at Ity and Sabodala-Massawa following the December 2023 reserves and resource update, higher levels of production at Ity, increased depreciation at Sabodala-Massawa related to higher depreciation rates associated with the Sabodala pit as it approaches the end of its mine life and inaugural depreciation and depletion charges at Lafigué and the Sabodala-Massawa BIOX project subsequent to commercial production from 1 August 2024.
8) Royalties increased by $11.9 million from $40.2 million in Q2-2024 to $52.1 million in Q3-2024 due to a higher realised gold price and higher gold sales volumes.
Royalties increased by $32.8 million from $93.4 million in YTD-2023 to $126.2 million in YTD-2024 due to a higher realised gold price and the increase to the sliding scale royalty rate structure in Burkina Faso effective from November 2023, partially offset by a decrease in gold sales.
9) Corporate costs of $11.9 million in Q3-2024 were largely consistent with the prior quarter.
Corporate costs decreased from $37.9 million in YTD-2023 to $33.3 million in YTD-2024 due to decreased corporate employee compensation and professional service costs, partially offset by an increase in administrative and other overhead costs.
10) Other expenses increased by $9.4 million from $13.4 million in Q2-2024 to $22.8 million in Q3-2024. For Q3-2024, other expenses included $15.6 million in restructuring and settlement costs associated with Sabodala-Massawa, $2.1 million in legal and other costs primarily related to the Lilium settlement, $2.2 million in disturbance costs, $2.0 million in community contributions, $0.8 million in realised losses on the disposal of assets and $0.1 million in tax claims.
11) De-recognition and impairment of financial assets increased by $95.1 million from $17.1 million in Q2-2024 to $112.2 million in Q3-2024 due to the write-down of expected proceeds from the divestment of the non-core Boungou and Wahgnion mines as a result of the previously announced settlement agreement between Endeavour, Lilium and the Government of Burkina Faso, which comprises a lower consideration than the original divestment transaction consideration with Lilium in Q2-2023. Pursuant to the settlement, Endeavour will receive a cash consideration of $60.0 million comprised of $15.0 million of upfront cash, $15.0 million cash payable by the end of Q3-2024 and $30.0 million payable by the end of Q4-2024 in addition to a 3% royalty on up to 400,000 ounces of gold sold from the Wahgnion mine. Endeavour received $25.1 million in cash during Q3-2024 and $14.9 million in early Q4-2024, with the outstanding $20.0 million expected to be received by the end of Q4-2024 in line with the payment schedule.
De-recognition and impairment of financial assets increased by $122.9 million from $5.8 million in YTD-2023 to $128.7 million in YTD-2024 due largely to the above mentioned write-down of expected proceeds from the divestment of the Boungou and Wahgnion mines.
12) Exploration costs of $4.3 million in Q3-2024 were consistent with the prior quarter.
Exploration costs decreased from $41.9 million in YTD-2023 to $14.0 million in YTD-2024 largely due to a decrease in exploration expense at the Assafou project on the Tanda-Iguela property, as increasingly, exploration activities are being capitalised at the Assafou project following the commencement of the pre-feasibility study, which is expected to be published in Q4-2024.
13) The loss on financial instruments increased from a loss of $31.8 million in Q2-2024 to a loss of $98.3 million in Q3-2024 largely due to an increase in net losses on gold collars and inter-quarter forward contracts. The loss on financial instruments during the quarter included an unrealised loss on gold collars and inter-quarter forward contracts of $49.2 million, a realised loss on gold collars and inter-quarter forward contracts of $45.7 million (including a $29.7 million realised loss on gold collars and a $16.0 million realised loss on inter-quarter forward contracts related to London Bullion Market Association (“LBMA”) gold price averaging), unrealised foreign exchange losses of $10.3 million and a $1.4 million unrealised loss on other financial instruments partially offset by a gain on marketable securities (Turaco Gold Limited and Allied Gold Corporation) of $7.6 million, an unrealised fair value gain on NSRs and deferred considerations of $0.5 million and an unrealised gain on the early redemption feature of senior notes of $0.2 million.
The loss on financial instruments increased from a loss of $33.7 million in YTD-2023 to a loss of $176.3 million in YTD-2024, due largely to realised and unrealised losses in relation to the Revenue Protection Programme and exchange rate movements between the Euro and the US dollar.
As previously disclosed, in order to increase cash flow visibility during its construction and de-leveraging phases, Endeavour entered into a Revenue Protection Programme, using a combination of zero premium gold collars and forward sales contracts, to cover a portion of its 2023, 2024 and 2025 production.
• During Q3-2024, 113koz were delivered into gold collars at the call gold price of $2,400/oz. For Q4-2024, approximately 113koz are expected to be delivered into a collar with an average call price of $2,400/oz and an average put price of $1,807/oz.
• For FY-2025, approximately 200koz are expected to be delivered into a collar with an average call price of $2,400/oz and an average put price of $1,992/oz.
14) Current income tax expense decreased by $66.8 million from $135.0 million in Q2-2024 to $68.2 million in Q3-2024 largely due to a decrease in recognised withholding tax expenses in Q3-2024 compared to $73.6 million in Q2-2024, due to the timing of local board approvals for cash upstreaming, partially offset by an increase in current corporate income taxes driven by higher taxable profits at Houndé and Ity as well as the addition of tax provisions at Lafigué subsequent to the declaration of commercial production.
Current income tax expense increased by $50.6 million from $193.1 million in YTD-2023 to $243.7 million in YTD-2024 due to an increase in withholding taxes on dividends paid by operating subsidiaries, an increase in current income taxes at Houndé and Ity, and adjustments in respect of the prior year income tax mainly in relation to the temporary contribution of 2% of net profit after tax of operating mines in Burkina Faso.
15) Net comprehensive losses from continuing operations increased by $32.4 million from a net comprehensive loss of $44.8 million in Q2-2024 to a net comprehensive loss of $77.2 million in Q3-2024. The increase in losses is largely driven by the impairment of proceeds from Boungou and Wahgnion divestment following the Lilium settlement, higher losses on financial instruments related to the Revenue Protection Programme, higher royalties and higher depreciation partially offset by improved operating margins and a lower tax expense.
Net comprehensive earnings from continuing operations decreased by $321.5 million from net comprehensive earnings of $190.2 million in YTD-2023 to a net comprehensive loss of $131.3 million in YTD-2024. The decrease in earnings was largely driven by higher losses on financial instruments related to the Revenue Protection Programme, the above-mentioned impairment, lower production, lower operating margins, higher depreciation, higher other expenses and higher royalties recorded in addition to higher finance costs due to increased interest expenses reflecting higher borrowings.
16) For Q3-2024, adjustments included an impairment of $112.2 million related to the write-down of proceeds from the sale of the Boungou and Wahgnion assets, an unrealised loss on financial instruments of $52.7 million largely related to the unrealised loss on forward sales and collars, and other expenses of $22.8 million largely related to the Sabodala-Massawa employee settlement and legal and other costs for the now settled Lilium arbitration process, partially offset by a gain on non-cash, tax and other adjustments of $19.1 million that mainly relate to the impact of foreign exchange remeasurements of deferred tax balances.
17) Adjusted net earnings attributable to shareholders for continuing operations increased by $70.6 million from earnings of $3.1 million (or $0.01 per share) in Q2-2024 to adjusted net earnings of $73.7 million (or $0.30 per share) in Q3-2024, due to improved operating margins and lower tax expenses.
Adjusted net earnings attributable to shareholders for continuing operations decreased by $70.7 million from $188.1 million (or $0.76 per share) in YTD-2023 to $117.4 million (or $0.48 per share) in YTD-2024 due to lower production, lower operating margins, higher royalties and higher realised losses on gold collars and hedges.
OPERATING ACTIVITIES BY MINE
Houndé Gold Mine, Burkina Faso
Table 12: Houndé Performance Indicators
Q3-2024 vs Q2-2024 Insights
YTD-2024 vs YTD-2023 Insights
FY-2024 Outlook
Ity Gold Mine, Côte d'Ivoire
Table 13: Ity Performance Indicators
Q3-2024 vs Q2-2024 Insights
YTD-2024 vs YTD-2023 Insights
FY-2024 Outlook
Mana Gold Mine, Burkina Faso
Table 14: Mana Performance Indicators
Q3-2024 vs Q2-2024 Insights
YTD-2024 vs YTD-2023 Insights
FY-2024 Outlook
Sabodala-Massawa Gold Mine, Senegal
Table 15: Sabodala-Massawa Performance Indicators
All-in Sustaining Cost excludes costs and ounces sold related to pre- commercial production at the Sabodala-Massawa BIOX Expansion.
Q3-2024 vs Q2-2024 Insights
YTD-2024 vs YTD-2023 Insights
FY-2024 Outlook
Solar Power Plant
Lafigué Mine, Côte d'Ivoire
Table 16: Lafigué Performance Indicators
All-in Sustaining Cost excludes costs and ounces sold related to pre-commercial production.
Q3-2024 vs Q2-2024 Insights
FY-2024 Outlook
EXPLORATION ACTIVITIES
Table 17: Q3-2024 and YTD-2024 Exploration Expenditure and FY-2024 Guidance
Exploration expenditures include expensed, sustaining and non-sustaining exploration expenditures.
Houndé mine
Ity mine
Mana mine
Sabodala-Massawa mine
Lafigué mine
Tanda-Iguela
CONFERENCE CALL AND LIVE WEBCAST
Management will host a conference call and webcast on Thursday 7 November, at 8:30 am EST / 1:30 pm GMT to discuss the Company's financial results.
The conference call and 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 video webcast can be accessed through the following link:
https://edge.media-server.com/mmc/p/8ooa7ouk
To download a calendar reminder for the webcast, visit the events page of our website here .
Analysts and investors are also invited to participate and ask questions by registering for the conference call dial-in via the following link:
https://register.vevent.com/register/BI1a60fc683b8345ecad064e684a533aa4
The conference call and webcast will be available for playback on Endeavour's website .
QUALIFIED PERSONS
Ross McMillan, SVP Technical Services of Endeavour Mining plc., a Fellow of the Australasian Institute of Mining and Metallurgy, is a "Qualified Person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and approved the technical information in this news release.
CONTACT INFORMATION
ABOUT ENDEAVOUR MINING PLC
Endeavour Mining is one of the world's senior gold producers and the largest in West Africa, with operating assets across Senegal, Côte 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 admitted to listing and to trading on the London Stock Exchange and the Toronto Stock Exchange, under the symbol EDV.
For more information, please visit www.endeavourmining.com .
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This document contains "forward-looking statements" within the meaning of applicable securities laws. All statements, other than statements of historical fact, are “forward-looking statements”, including but not limited to, statements with respect to Endeavour's plans and operating performance, the ability of the Group to achieve its production guidance, AISC guidance, Group non-sustaining capital expenditure outlook, and growth capital expenditure outlook for FY-2024, the estimated exploration expenditures for FY-2024, the ability of Endeavour to meet its 5-year exploration target, the availability of additional dividends and share buybacks, the success of exploration activities, estimated costs incurred in connection with the construction of the Solar Power Plant and the timing for an updated resource for the Vindaloo Deeps deposit and Tanda-Iguela. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "expects", "expected", "budgeted", "forecasts", "anticipates", believes”, “plan”, “target”, “opportunities”, “objective”, “assume”, “intention”, “goal”, “continue”, “estimate”, “potential”, “strategy”, “future”, “aim”, “may”, “will”, “can”, “could”, “would” and similar expressions .
Forward-looking statements, while based on management's reasonable estimates, projections and assumptions at the date the statements are made, 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 or completion of divestitures; risks related to international operations; risks related to general economic conditions and the impact of credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; Endeavour's financial results, cash flows and future prospects being consistent with Endeavour expectations in amounts sufficient to permit sustained dividend payments; the completion of studies on the timelines currently expected, and the results of those studies being consistent with Endeavour's current expectations; actual results of current exploration activities; production and cost of sales forecasts for Endeavour meeting expectations; 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; extreme weather events, natural disasters, supply disruptions, power disruptions, accidents, pit wall slides, 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 legislation, regulation of mining operations, tax rules and regulations and changes in the administration of laws, policies and practices in the jurisdictions in which Endeavour operates; disputes, litigation, regulatory proceedings and audits; adverse political and economic developments in countries in which Endeavour operates, including but not limited to acts of war, terrorism, sabotage, civil disturbances, non-renewal of key licenses by government authorities, or the expropriation or nationalisation of any of Endeavour's property; risks associated with illegal and artisanal mining; environmental hazards; and risks associated with new diseases, epidemics and pandemics.
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.
The declaration and payment of future dividends and the amount of any such dividends will be subject to the determination of the Board of Directors, in its sole and absolute discretion, taking into account, among other things, economic conditions, business performance, financial condition, growth plans, expected capital requirements, compliance with the Company's constating documents, all applicable laws, including the rules and policies of any applicable stock exchange, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Company, and any other factors that the Board of Directors deems appropriate at the relevant time. There can be no assurance that any dividends will be paid at the intended rate or at all in the future.
NON-GAAP MEASURES
Some of the indicators used by Endeavour in this press release represent non-IFRS financial measures, including “all-in margin”, “all-in sustaining cost”, “net cash / net debt”, “EBITDA”, “adjusted EBITDA”, “net cash / net debt to adjusted EBITDA ratio”, “cash flow from continuing operations”, “total cash cost per ounce”, “sustaining and non-sustaining capital”, “net earnings”, “adjusted net earnings”, “free cash flow”, “operating cash flow per share”, “free cash flow per share”, and “return on capital employed”. These measures are presented as they can provide useful information to assist investors with their evaluation of the pro forma performance. Since the non-IFRS performance measures listed herein do not have any standardised definition prescribed by IFRS, they may not be comparable to similar measures presented by other companies. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Please refer to the non-GAAP measures section in this press release and in the Company's most recently filed Management Report for a reconciliation of the non-IFRS financial measures used in this press release.
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