Endeavour Reports Q1-2019 Results

 

ENDEAVOUR REPORTS Q1-2019 RESULTS
Well positioned to meet full year 2019 production and AISC guidance; Ity CIL project successfully commissioned 4-months ahead of schedule at full nameplate capacity

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OPERATIONAL AND FINANCIAL Highlights 
(for continuing operations)

• Q1-2019 performance in line with expectations with a production of 121koz, at an AISC of $877/oz; decreasing following a record Q4-2018 as the Ity heap leach operation ceased in 2018 ahead of the CIL commissioning 
• Well positioned to meet full year 2019 production guidance of 615-695koz and AISC of $760-810/oz, with strong growth starting in Q2-2019:  
  • Ity CIL project commissioned in early Q2-2019 and operating at full nameplate capacity
  • Higher process grades expected across the group
• Continued exploration success with already $15m spent in Q1-2019, over a third of the full-year budget
• Operating Cash Flow before non-cash working capital amounted to $48m in Q1-2019, or $0.44/share, a decrease of only $5m compared to Q4-2018 despite 53koz fewer ounces produced, due to the planned reduction of stockpiles and a higher gold price
• Adjusted Net Earnings of $(5)m or $(0.04)/share in Q1-2019
• Net Debt of $635m at quarter-end, an expected increase from $536m at year-end 2018, mainly due to the construction spend for the Ity CIL project  
• At quarter-end, Endeavour's available sources of financing and liquidity remained strong at $144m, with minimal capital requirement outstanding as the Ity CIL project began commercial production in early Q2-2019

George Town, May 1, 2019 - Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) is pleased to announce its financial and operating results for the first quarter of 2019, with highlights provided in the table below.

Table 1: Key Operational and Financial Highlights

For Continuing operations (in US$ million unless stated otherwise)	QUARTER ENDED
	Mar. 31,	Dec. 31,	Mar. 31,	Var. Q1-19  vs. Q4-18
	2019	2018	2018
PRODUCTION AND AISC HIGHLIGHTS
Gold Production, koz	121	174	152	(31%)
Realized Gold Price2, $/oz	1,252	1,198	1,293	4%
All-in Sustaining Cost1, $/oz	877	707	685	24%
All-in Sustaining Margin1,3, $/oz	375	491	601	(24%)
CASH FLOW HIGHLIGHTS 1
All-in Sustaining Margin4, $m	45	85	92	(47%)
All-in Margin5, $m	22	40	63	(44%)
Operating Cash Flow Before Non-Cash Working Capital, $m	48	53	84	(9%)
Cash Flow per Share, $/share	0.44	0.49	0.78	(10%)
PROFITABILITY HIGHLIGHTS
Revenues, $m	151	208	199	(27%)
Adjusted EBITDA1, $m	41	56	90	(28%)
Net Earnings Attr. to Shareholders1, $m	(15)	(32)	12	n.a.
Net Earnings1, $/share	(0.13)	(0.29)	0.11	n.a.
Adjusted Net Earnings Attr. to Shareholders1, $m	(5)	16	23	n.a.
Adjusted Net Earnings per Share1, $/share	(0.04)	0.15	0.22	n.a.
BALANCE SHEET HIGHLIGHTS1
Net Debt, $m	635	536	336	18%

¹This is a non-GAAP measure. Refer to the non-GAAP measure section of the MD&A. ²Realized Gold Price inclusive of Karma stream; ³Realized Gold Price less AISC per ounce; ⁴Net revenue less All-in Sustaining Cost; ⁵Net revenue less All-in Sustaining Costs and Non-Sustaining capital. 

Sébastien de Montessus, President & CEO, stated: "We have begun 2019 well with continued momentum across the business, as production and costs from all our mines track in line with our guidance for the year. We are particularly pleased to have achieved the significant milestone of first gold production from the Ity CIL project during the period. With commissioning at full nameplate capacity achieved at the beginning of the second quarter, we are poised for a significant increase in production over  the remainder of the year as we also benefit from access to the higher grade Bouéré deposit at Houndé. Endeavour is now entering a period in which we expect to generate strong free cash flow, with a continued focus on return on capital employed.

Looking ahead, we have a number upcoming catalysts including the publication of the maiden reserve for the Kari Pump discovery at Houndé, an increased resource for the La Plaque discovery at Ity, and the completion of the Ity CIL plant upgrade later this year."

 

2019 UPCOMING CATALYSTS

The notable expected catalysts for 2019 are summarized in the table below.

Table 2: Notable Upcoming Catalysts for 2019

ESTIMATED TIMING	CATALYST
Early-Q2	Ity CIL	Benefit from the start of commercial production at Ity CIL
Q2	Ity CIL	Increased resource at the Le Plaque discovery
Q2	Houndé	Maiden reserve for the Kari Pump discovery
Late-Q2	Houndé	Commissioning of the high-grade Bouéré deposit
Mid-year	Houndé	Drill results for the ongoing exploration campaign at the Kari West and Kari Center discoveries
Q3	Fetekro	Resources increase at the Lafigue deposit
Q4	Ity CIL	Plant upsize to 5Mtpa complete
Q4	Houndé	Maiden resource for the Kari West and Kari Center discoveries
Q4	Ity CIL	Maiden reserve for the Le Plaque discovery

 

PRODUCTION AND AISC ON TRACK TO MEET FULL-YEAR GUIDANCE

• In line with guided trends, Q1-2019 production from continuing operations decreased from Q4-2018 to 121koz, and AISC increased to $877/oz. Further information is provided in Table 5 below.
• The group is well positioned to meet its full year 2019 production guidance of 615-695koz and AISC of $760-810/oz, with strong growth starting in Q2-2019, as described in Table 5 below.

Table 3: Group Production, koz

(All amounts in koz, on a 100% basis)	THREE MONTHS ENDED
	Mar. 31,	Dec. 31,	Mar. 31,		2019 FULL-YEAR GUIDANCE
	2019	2018	2018
Agbaou	32	44	32		120	-	130
Ity Heap Leach CIL (ceased in Q4-2018)	3	21	18		160	-	200
Ity CIL (pre-commercial production)	9	-	-
Karma	22	33	28		105	-	115
Houndé	55	76	74		230	-	250
PRODUCTION FROM CONTINUING OPERATIONS	121	174	152		615	-	695
Tabakoto (divested in December 2018)	-	30	32		n.a.	-	n.a.
TOTAL PRODUCTION	121	204	185		615	-	695

Table 4: Group All-In Sustaining Costs, US$/oz

(All amounts in US$/oz)	THREE MONTHS ENDED
	Mar. 31,	Dec. 31,	Mar. 31,		2019 FULL-YEAR GUIDANCE
	2019	2018	2018
Agbaou	784	776	752		850	-	900
Ity Heap Leach (ceased in Q4-2018)	1,086	622	829		525	-	590
Ity CIL (commercial production began Q2-2019)*	n.a.	n.a.	n.a.
Karma	957	697	869		860	-	910
Houndé	781	588	433		720	-	790
Corporate G&A	50	46	49		35	-	35
Sustaining Exploration	0	0	15		5	-	5
GROUP AISC FROM CONTINUING OPERATIONS	877	707	685		760	-	810
Tabakoto (divested in December 2018)	-	1,470	1,208		n.a.	-	n.a.
GROUP AISC	877	818	774		760	-	810

*No AISC available for pre-production ounces.

Table 5: Q1-2019 and Outlook Insights

	Q1-2019 vs. Q4-2018  INSIGHTS	OUTLOOK INSIGHTS
Agbaou	Production decreased in line with expectations as low-grade stockpiles temporarily supplemented plant feed	Production expected to remain flat while AISC are expected to increase to the guidance range
Ity Heap Leach	Only 3koz of residual ounces recovered	No production
Ity CIL	Pre-commercial production of 9koz	Strong benefit from commercial production declared in early Q2 at full nameplate capacity
Karma	Production decreased and AISC increased in line with expectations due to low-grade stockpiles temporarily used to supplement stack feed and its associated lower recovery rate	Stronger performance expected in H2-2019 due to the benefit of stacking oxide ore from the North Kao pit
Houndé	Production decreased and AISC increased in line with expectations as low-grade stockpiles temporarily supplemented plant feed	Stronger performance expected in H2-2019 once the high-grade Bouéré deposit is commissioned
MAIN DRIVERS FOR THE GROUP	Ity heap leach operation ceased  The group strategically fed approximately 30% of total mill feed from low-grade stockpiles, in line with the previously announced focus on reducing working capital	Ity CIL project commissioned in early Q2-2019 and operating at full nameplate capacity Higher process grades expected across the group

HOUNDÉ MINE
Q1-2019 vs Q4-2018 Insights

• Production decreased in line with expectations as low-grade stockpiles temporarily supplemented plant feed. Mining focused on waste capitalisation activities, which are expected to provide access to higher-grade ore.
  • Tonnes of ore mined decreased and the strip ratio increased due to a greater focus on waste capitalisation activities on both the Vindaloo deposit (based on the planned mine sequence and the carry-over of stripping delayed from 2018) and pre-stripping at the high-grade Bouéré deposit, which is expected to be commissioned in late Q2-2019.
  • Transitional and fresh ore from the Vindaloo Main deposit continued as the main ore type mined, supplemented by oxide ore from the Vindaloo North deposit where mining began in late Q1-2019.
  • Tonnes milled remained flat.
  • The average grade milled decreased due to low grade stockpiles supplementing the mine feed as mining activities focused on waste capitalisation activities and to reduce working capital.
  • Recovery rates remained steady at 93%.
• AISC increased mainly due to the anticipated lower processed grade, higher unit processing costs and sustaining capital expenditure which were partially offset by lower unit G&A costs.
  • Mining unit costs increased slightly from $1.92 to $2.02 per tonne as fewer tonnes were mined.
  • Processing unit costs increased from $11.84 to $12.31 per tonne due to a higher proportion of fresh ore milled. 
  • Sustaining capital increased from $1.1 million to $3.3 million (from $15/oz to $55/oz) due to increased stripping activity at the Vindaloo deposits.
• Non-sustaining capital increased from $0.7 million to $6.1 million due to waste capitalisation activities at the high-grade Bouéré deposit.

Q1-2019 vs Q1-2018 Insights

• Production decreased and AISC increased as guided due to low-grade stockpiles supplementing the mill feed and a shift to mining harder ore, whereas Q1-2018 benefited from high-grade soft oxide ore.   

Table 6: Houndé Quarterly Performance Indicators

For The Quarter Ended	Q1-2019	Q4-2018	Q1-2018
Tonnes ore mined, kt	769	1,736	1,361
Strip ratio (incl. waste cap)	11.23	5.87	6.57
Tonnes milled, kt	1,034	1,062	898
Grade, g/t	1.80	2.38	2.59
Recovery rate, %	93%	93%	95%
PRODUCTION, KOZ	55	76	74
Cash cost/oz	638	508	340
AISC/OZ	781	588	433

Outlook

• Houndé is on track to meet its full-year 2019 production guidance of 230,000 - 250,000 ounces and its AISC guidance of $720-790 per ounce.
• Houndé's production is expected to increase in H2-2019 as pre-stripping activities at the high-grade Bouéré deposit are progressing as planned with commissioning expected to occur in late Q2-2019.
• Reserves are expected to increase in mid-year as the Kari Pump resource is converted to reserves following the completion of the on-going metallurgical tests. 

Exploration Activities

• Houndé is Endeavour's largest exploration focus this year with a budget of $17 million and comprising approximately 195,000 meters of drilling with the aim to drill the entire Kari anomaly and delineate a maiden resource on the 2018 Kari West and Kari Center discoveries. Other targets, such as Vindaloo South and deep, Grand Espoir and Sia/Sianikoui, are also expected to be explored in H2-2019.  
• In Q1-2019, nearly 61,100 meters were drilled, with a focus mainly on the Kari West and Kari Center, and a possible extension defined southwest of Kari Center. Drill results are expected to be published in late Q2-2019 and maiden resources in Q4-2019.

AGBAOU MINE
Q1-2019 vs Q4-2018 Insights

• Production decreased in line with expectations with low-grade stockpiles temporarily supplementing plant feed as mining focused on waste capitalisation activities.
  • Tonnes of ore mined decreased due to a greater focus on waste capitalisation activities following the carry-over of stripping delayed from 2018, with mining temporarily constrained to low grade areas of North Pit and West Pit 3.
  • Mill throughput increased slightly as the proportion of fresh ore fed to the plant decreased due to the blending of softer oxide ore stockpiles.
  • Average processed grades decreased as low-grade stockpiles supplemented the mill feed and mining was constrained to low grade areas.
  • Recovery rates decreased to 93% due to the ore characteristics of the lower grade material fed to the plant. 
• All-in sustaining costs increased slightly - although remain well-below the guided range - mainly due to the lower process grades and an increase in sustaining costs.
  • Mining unit costs increased from $2.38 to $2.52 per tonne due to the reduced volumes mined and increases in load and haul costs as deeper elevations at North Pit and West Pit 3 were mined.
  • Processing unit costs decreased from $7.66 to $7.34 per tonne due to an increased in tonnes milled.
  • Sustaining capital costs increased from $5.8 million to $7.3 million (from $131/oz to $216/oz) primarily due to the increase in capitalised waste.
• Non-sustaining capital decreased from $3.3 million to $2.5 million as pre-stripping in West Pit 5 was completed, which was slightly offset by the cost incurred on the final TSF raise.

Q1-2019 vs Q1-2018 Insights

• Production remained steady while AISC increased mainly due to higher sustaining costs which were partially offset by lower unit mining and processing costs.

Table 7: Agbaou Quarterly Performance Indicators

For The Quarter Ended	Q1-2019	Q4-2018	Q1-2018
Tonnes ore mined, kt	451	481	682
Strip ratio (incl. waste cap)	12.79	13.65	10.66
Tonnes milled, kt	720	708	726
Grade, g/t	1.42	2.21	1.43
Recovery rate, %	93%	95%	93%
PRODUCTION, KOZ	32	44	32
Cash cost/oz	517	601	629
AISC/OZ	784	776	752

Outlook

• Agbaou is on track to meet its full-year 2019 production guidance of 120,000 - 130,000 ounces and its AISC guidance of $850-$900 per ounce.
• Waste capitalisation efforts are expected to progress throughout the year with lower-grade stockpiles continuing to supplement the mill feed.

Exploration Activities

• An exploration program of up to $2 million, totaling approximately 10,000 meters, has been initially planned for 2019 with the aim of delineating oxide material in extensions of the North and West Pits and further investigating targets on parallel trends.
• Due to higher priorities in Cote d'Ivoire, Agbaou exploration activities have been postponed until later in the year as the team focuses on the Greater Ity and Fetekro areas.  

KARMA MINE
Q1-2019 vs Q4-2018 Insights

• Production decreased in line with expectations due to the low-grade stockpiles temporarily used to supplement stack feed (to reduce working capital and advance pre-stripping activities) and the associated lower recovery rate.
  • Tonnes of ore mined increased due to the lower strip ratio, with mining focused on the Kao pit which is expected to be mined out by mid-year. In addition, pre-stripping began at the North Kao pit and is expected to be completed in Q2-2019.
  • Tonnes stacked increased due to improved stacker availability as the new front end continues to perform above its nameplate capacity. 
  • The stacked grade decreased as a result of low-grade material being fed from stockpiles.
  • Recovery temporarily decreased due to the lower recovery rate of the low-grade stockpile ore stacked (stockpiles were mainly from the previously mined GG2 deposit which had a high copper content).
• AISC increased as expected mainly due to decreased production and higher unit mining costs, which were partially offset by lower unit G&A costs and sustaining capital.
  • Mining unit costs increased from $1.76 to $2.36 per tonne due to mining at deeper elevations in the Kao pit and more transitional material.
  • Processing unit costs remained fairly constant.
  • Sustaining capital costs decreased by $0.5 million to $0.7 million (from $35 to $29/oz) mainly due to a decrease in capital waste.
• Non-sustaining capital spend decreased by $5.4 million to $2.8 million mainly due to reduced pre-stripping activity in the Kao deposit in 2018 and North Kao in 2019.

Q1 2019 vs Q1 2018 Insights

• Production decreased and AISC increased, mainly due to the lower grades associated with supplemented ore stacked from stockpile.

Table 8: Karma Quarterly Performance Indicators

For The Quarter Ended	Q1-2019	Q4-2018	Q1-2018
Tonnes ore mined, kt	834	788	1,536
Strip ratio (incl. waste cap)	4.73	5.54	1.48
Tonnes stacked, kt	1,095	1,037	1,241
Grade, g/t	0.69	0.98	0.88
Recovery rate, %	80%	88%	74%
PRODUCTION, KOZ	22	33	28
Cash cost/oz	851	592	757
AISC/OZ	957	697	869

Outlook

• Karma is on track to meet its full-year 2018 production guidance of 105,000 - 115,000 ounces and its AISC guidance of $860-910 per ounce.
• As guided, Karma is expected to have a stronger performance in H2-2019 due to the benefit of stacking oxide ore from the North Kao pit, where pre-stripping is expected to be completed in Q2-2019. 

Exploration Activities

• An exploration program of up to $2 million totaling approximately 27,000 meters has been planned for 2019, with the aim of delineating near-mill oxide targets. It is mainly focused on testing the extension of the North Kao deposit and the along strike and northern plunge extension of the Yabonsgo deposit.
• In Q1-2019, due to the priority of exploration at Houndé, exploration activity at Karma has been postponed to later in the year as the team focuses on the numerous Houndé exploration targets.

ITY MINE
Ownership

• On January 11, 2019, Endeavour announced that it increased its ownership stake in the Ity mine from 80% to 85%. In exchange for the additional 5% interest in the Ity mine, Endeavour granted DYD International Holding Limited, a company owned by Didier Drogba, 1,072,305 common shares amounting to a total consideration of approximately $15.0 million (CAD$20.0 million) based on the signing reference share price of C$18.50.

Heap Leach Operation: Q1-2019 vs Q4-2018 Insights

• As previously disclosed, mining and stacking activities for the heap leach operation ceased in mid-December 2018 as the focus shifted to commissioning and ramping up the CIL plant.
• Production declined to 2,702 ounces, as the final ounces were recovered from the heap leach operation, with AISC amounting to $1,086 per ounce.  
  • There were no mining costs associated with the heap leach operation.
  • Processing costs were mainly comprised of reagents used to leach remaining ounces on the heap.
  • There were no sustaining capital costs in the quarter.
• There was no non-sustaining capital spent in the quarter.

Q1 2019 vs Q1 2018 Insights

• Production and AISC decreased as heap leach operations came to an end in Q1-2019.

Table 9: Ity HL Quarterly Performance Indicators

For The Quarter Ended	Q1-2019	Q4-2018	Q1-2018
Tonnes ore mined, kt	0	200	370
Strip ratio (incl. waste cap)	0.00	1.47	3.25
Tonnes stacked, kt	0	316	357
Grade, g/t	0.00	2.37	2.17
Recovery rate, %	0%	87%	73%
PRODUCTION, KOZ	3	21	18
Cash cost/oz	1,038	563	728
AISC/OZ	1,086	622	829

Ity CIL: Construction and Ramp-up Update

• No Lost-Time-Injury occurred over the 8.5 million man-hours worked during the construction period.

• The Ity CIL project began processing ore on February 20, 2019 and achieved its first gold pour on March 18, 2019, marking the successful completion of the Ity CIL project build in less than 18 months. Pre-commercial production in Q1-2019 amounted to 9koz.

Table 10: Ity CIL Quarterly Performance Indicators

For The Quarter Ended	Q1-2019	Q4-2018	Q1-2018
Tonnes ore mined, kt	1,114	-	-
Strip ratio (incl. waste cap)	2.01	-	-
Tonnes milled, kt	258	-	-
Grade, g/t	2.04	-	-
Recovery rate, %	88%	-	-
PRODUCTION, KOZ	9	-	-
Cash cost/oz	n.a.	-	-
AISC/OZ*	n.a.	-	-

*No AISC available for pre-production ounces.

• Commercial production was declared on April 8, 2019, at its full nameplate capacity following a quick ramp up phase.
• The plant is performing well with all key metrics meeting their prescribed targets: processing rate is exceeding 11,100 tonnes per day, with an overall plant availability of 96%, and gold recovery rate of 94% at commercial production.
• Following the performance tests conducted, Endeavour launched optimization and de-bottlenecking work, expected to increase the plant nameplate capacity by 1Mtpa to 5Mtpa at a minimal cost of $10-15 million. The volumetric upsize work mainly comprises of an upgrade in pipes and pumps and a second 50-tonne oxygen plant, with no additional mining fleet required. These plant upgrades are expected to be completed during scheduled plant maintenance shut-downs over the next six months.
• The project was completed below the initial budget of $412 million. In addition to the initial scope, extra work was conducted, including the construction of a fuel farm, building exploration facilities, and an additional $7 million of crop and resettlement compensation in terms of prospective exploration grounds. Due to these additional works, and the $10-15 million required for the plant upgrade to 5Mtpa, the total project capex spend is expected to amount to approximately $420 million.
• In addition to the initial scope, extra work was conducted, including the construction of a fuel farm, building exploration facilities, and an additional $7 million of crop and resettlement compensation in terms of prospective exploration grounds. Upsize work is already underway and as at March 31, 2019, the total project capital expenditure stood at $415 million, including approximately $341 million of cash outflow, $67 million of leased equipment and $6.8 million of non-cash working capital.

Outlook

• The last ounces were recovered on the heaps as activities transitioned to the CIL operation.
• Ity is expected to produce 160-200koz in 2019 at an AISC of $525-590/oz, with the bottom-end of the production guidance corresponding to the 4Mtpa nameplate capacity. The top-end already factors in upsides including an earlier start date, an expedited ramp-up and the plant producing above its nameplate capacity.

Exploration Activities

• A $10 million exploration campaign has been planned in 2019 totaling approximately 71,000 meters, with the aim of extending and delineating the Le Plaque deposit, conducting regional exploration in its vicinity, and addressing other targets south of the Daapleu and Mount Ity deposits.
• In Q1-2019, a total of 26,600 meters were drilled, with seven rigs active over the greater Ity area, with five of them active on and around Le Plaque area.
• An update Le Plaque resource is expected to be announced in late Q2-2019.

KALANA PROJECT UPDATE

• After the 2018 drilling campaign, the Kalana Main resource estimate was updated following a rebuild of the geological model, which used a more conservative approach to incorporate tighter geological controls, as published on March 5, 2019.
• The updated 2019 Mineral Resource will be used as a basis for an updated feasibility study, expected to be prepared for Q4-2019. In parallel to working on the Kalana feasibility study and its exploration potential, Endeavour intends to review its other available internal growth opportunities. Based on Endeavour's capital allocation strategy, the Kalana project investment case will be reviewed against its other internal growth opportunities and uses of capital.
• A $4 million exploration campaign totaling approximately 26,000 meters has been planned for 2019, beginning in the second quarter, with the aim of testing additional targets located within a 10km radius of the Kalana deposit and increasing the resources base available for the project.
• Total growth capex of $9 million has been allocated for 2019 for the feasibility study, maintenance and standby costs, and CSR activities, of which $4 million was spent in Q1-2019.

EXPLORATION ACTIVITIES

• Exploration continued to be a strong focus in Q1-2019 with a company-wide exploration spend of $15 million, comprising 115,203 meters drilled across the group. Details by asset are provided in the above mine sections.
• The main areas of focus in Q1-2019 were:
  • At Houndé, on the Kari West and Center discoveries made in 2018, with drill results planned to be announced in late Q2-2019 and maiden resources in Q4-2019;
  • At Ity, on the Le Plaque discovery where an updated resource is expected to be published in late Q2-2019;
  • At the greenfield Fetekro, a license for a $5 million exploration campaign totaling approximately 43,000 meters has been planned for 2019 with the aim of delineating additional indicated resource at the Lafigue deposit and testing other nearby targets. A total of 27,400 meters have been drilled over the Lafigue deposit in Q1-2019 and an updated resource is planned to be published in Q3-2019.
  • Drilling at Kalana is expected to commence in Q2-2019, while exploration at both Agbaou and Karma has been delayed to later in the year to redeploy exploration staff at Ity and Houndé respectively, (which are of higher priority and where additional human resources were necessary).

Table 11: Exploration Expenditure, $m

(in $m)	Q1-2019 EXPENDITURE	2019 BUDGET ALLOCATION
Agbaou	0	2	4%
Ity mine and trend	3	11	23%
Karma	0	2	5%
Kalana	0	4	8%
Houndé	7	17	37%
Fetekro	3	7	16%
Other greenfield properties	1	4	8%
TOTAL EXPLORATION EXPENDITURES*	$15m	$40-45m	100%

*Includes expensed, sustaining, and non-sustaining exploration expenditures.

CASH FLOW BASED ON ALL-IN MARGIN APPROACH

• The table below presents the cash flow for the three months ended March 31^st, based on the All-In Margin approach, with accompanying notes below.

Table 12: Simplified Cash Flow Statement

			QUARTER ENDED
			Mar. 31,	Mar. 31,
(in US$ million)			2019	2018
GOLD SOLD FROM CONTINUING OPERATIONS, koz		(Note 1)	121	154
Gold Price, $/oz		(Note 2)	1,252	1,293
REVENUE FROM CONTINUING OPERATIONS			151	199
Total cash costs			(80)	(81)
Royalties		(Note 3)	(9)	(12)
Corporate costs			(6)	(8)
Sustaining capex		(Note 4)	(11)	(4)
Sustaining exploration			0	(2)
ALL-IN SUSTAINING MARGIN FROM CONTINUING OPERATIONS		(Note 5)	45	92
Less: Non-sustaining capital		(Note 6)	(11)	(14)
Less: Non-sustaining exploration		(Note 7)	(12)	(15)
ALL-IN MARGIN FROM CONTINUING OPERATIONS			22	63
Working capital		(Note 8)	(25)	(37)
Changes in long-term inventories		(Note 9)	0	(3)
Changes in long-term receivables		(Note 10)	(6)	0
Taxes paid			(2)	(2)
Interest paid and financing fees		(Note 11)	(13)	(7)
Cash settlements on hedge programs and gold collar premiums		(Note 12)	(0)	(1)
NET FREE CASH FLOW FROM CONTINUING OPERATIONS			(23)	13
Growth project capital		(Note 13)	(66)	(75)
Greenfield exploration expense			(4)	(3)
M&A activities			(0)	0
Cash paid on settlement of share appreciation rights, DSUs and PSUs			(1)	(3)
Net equity proceeds			0	1
Restructuring costs			0	0
Other (foreign exchange gains/losses and other)		(Note 14)	(5)	(6)
Convertible senior bond		(Note 15)	0	330
Proceeds (repayment) of long-term debt		(Note 16)	60	(280)
Cashflows used by discontinued operations		(Note 17)	0	(6)
CASH INFLOW (OUTFLOW) FOR THE PERIOD			(40)	(29)

Certain line items in the table above are NON-GAAP measures. For more information and notes, please consult the Company's MD&A.

NOTES:

1. Gold sales from continuing operations decreased mainly due to the Ity Heap Leach operation ceasing activities in Q4-2018, and declines across the other mines mainly due to use of low-grade stockpiles.
2. The Q1-2019 realized gold price was $1,252/oz compared to $1,293/oz in 2018. Both these amounts include the impact of the Karma stream, amounting to 7,890 ounces sold in Q1-2019 and 5,735 in Q1-2018, at 20% of spot prices.
3. Royalties paid decreased both due to lower gold sales and a lower realized gold price, representing approximately $74/oz sold for Q1-2019 compared to $78/oz for Q1-2018. 
4. Sustaining capital for continuing operations for Q1-2019 increased compared to the corresponding period in 2018 due to an increase at both Agbaou and Houndé, which were slightly offset by a decrease at Ity as illustrated in the below table. Further details by assets are provided in the above mine sections. 

Table 13: Sustaining Capital for Continuing Operations

(All amounts in US$m)	QUARTER ENDED
	Mar. 31,	Dec. 31,	Mar. 31,
	2019	2018	2018
Agbaou	7	6	2
Ity	0	0	1
Karma	1	1	1
Houndé	3	1	0
Total	11	8	4

5. The All-In Sustaining Margin from continuing operations decreased compared to Q1-2018 due the decrease in revenue and an increase in operating costs and sustaining capital expenditure.
6. Non-sustaining capital spend from continuing operations decreased by $3 million in Q1-2019 compared to Q1-2018 mainly due to a $5 million decrease at Agbaou, which experienced significant waste capitalization activities in Q1-2018, which was partially offset by an increase at Houndé due to waste capitalization activities for the high-grade Bouéré deposit.

Table 14: Non-Sustaining Capital for Continuing Operations

(All amounts in US$m)	QUARTER ENDED
	Mar. 31,	Dec. 31,	Mar. 31,
	2019	2018	2018
Agbaou	3	3	8
Ity	0	0	0
Karma	3	8	3
Houndé	6	1	2
Non-mining	0	27	2
Total	11	39	14

7. Non-sustaining exploration capital decreased but remained at a high level in line with Endeavour's strategic objective of unlocking exploration value.
8. The working capital cash outflow in Q1-2019 amounted to $25 million with the main components as follows:
   • Receivables were an outflow of $4 million. This was mainly due to the increase in VAT receivable at Houndé, which was slightly offset by a decrease in gold sales receivables. 
   • Inventories were an outflow of $4 million, due to of the delivery timing of spares parts consumables in anticipation for scheduled plant maintenance at Houndé. There have also been gold-in-circuit increases at Karma due to higher volumes stacked, which impacted cashflow by $2 million and is expected to be received in Q2-2019. Stockpile volumes have been reduced as low-grade material was fed to the plant to supplement production. These were offset by a decrease in finished goods.
   • Prepayments were a $1 million outflow due to prepayments made during the normal course of business.
   • Trade and other payables were a $16 million outflow, mainly due to a buildup of supplier payments at year-end at the operating mines, as well as a $7 million outflow at Corporate for salaries payable.
9. There were no changes in long-term inventories in Q1-2019, as an emphasis was placed on processing stockpiles.
10. Changes in long-term assets are in relation to the recognition of the long-term receivable for Baboto permit, as agreed in the sale of the Tabakoto mine.
11. Interest paid, financing fees and lease repayments in Q1-2019 consisted of repayments of finance lease obligations of $0.2 million, interest paid of $9 million and payment of financing and other fees of $3 million. The increase from the comparative period is due to increased levels of group debt and leasing pertaining to a change in accounting standards.
12. The revenue protection program, based on a collar with a floor at $1,300/oz and a ceiling of $1,500/oz, generated a cash outflow, net of the premium, of $0.1 million in Q1-2019.
13. Growth projects for Q1-2019 were comprised mainly of:  

o  $62 million for the Ity CIL project

o  $4 million on Kalana

14. A foreign exchange loss, mainly on the settlement of Euro denominated supplier payments, occurred because of a stronger U.S. dollar.
15. $330 million was received in Q1-2019 from the convertible notes issuance.
16. $280 million was repaid on the revolving credit facility ("RCF") in Q1-2018, while $60 million was drawn down on the RCF in Q1-2019.
17. For 2018 the discontinued operation represents the Tabakoto mine.

NET CASHFLOW, NET DEBT AND LIQUIDITY SOURCES

At year-end, Endeavour's available sources of financing and liquidity remained strong at $144 million, including its $84 million cash position and $60 million undrawn on the RCF. In addition to these liquidity sources, Endeavour has strong cash flow generation potential (as the Ity CIL project was commissioned in early Q2-2019) and the remaining proceeds from the Tabakoto and Nzema sales.

The below table summarizes operating, investing, and financing activities, main balance sheet items and the resulting impact on the company's Net Debt position, with notes provided below. 

Table 15: Cash Flow and Net Debt Position

			QUARTER ENDED
			Mar. 31,	Dec. 31,	Mar. 31,
(in US$ million unless stated otherwise)			2019	2018	2018
Net cash from (used in), as per cash flow statement:
Operating activities	(Note 18)		23	131	48
Investing activities	(Note 19)		(110)	(87)	(119)
Financing activities	(Note 20)		47	43	42
Effect of exchange rate changes on cash			(0)	(1)	(0)
INCREASE/(DECREASE) IN CASH			(40)	86	(29)
Cash position at beginning of period			124	38	123
CASH POSITION AT END OF PERIOD			84	124	94
Equipment financing			(99)	(100)	(79)
Convertible senior bond	(Note 21)		(330)	(330)	(330)
Drawn portion of revolving credit facility	(Note 22)		(290)	(230)	(20)
NET DEBT POSITION	(Note 23)		635	536	336
Net Debt / Adjusted EBITDA (LTM) ratio			2.96	1.97	1.24

Net Debt and Adjusted EBITDA are NON-GAAP measures. For a discussion regarding the company's use of NON-GAAP Measures, please see "note regarding certain measures of performance" in the MD&A.

NOTES:

18. Net cash flow from operating activities during Q1-2019 was $23 million, down $25 million compared to Q1-2018, mainly due to a decrease in revenues related to fewer ounces sold at a lower gold price and higher operating costs.
19. Net cash used in investing activities during Q1-2019 was $110 million, down $9 million compared to Q1-2018. Investing activities remained high due to the $66 million growth project capital spend (mainly for Ity CIL construction - reference Note 13 above) and an increase in sustaining capital spend (reference Notes 4 above) These were partially offset by a decrease in non-sustaining capital (reference Note 6 above).
20. Net cash generated in financing activities during Q1-2019 was $47 million, mainly related to the $60 million drawdown on the RCF which was offset by $9 million in interest payments and a $3 million repayment of finance lease obligations.  
21. In Q1-2018, Endeavour issued a $330 million convertible note and subsequently downsized its $500 million revolving credit facility to $350 million.
22. In Q1-2019, $60 million was drawn down on the RCF.
23. As anticipated, net debt increased from $536 million to $635 million since December 31, 2018, mainly due to the growth capital spend for the Ity CIL project which was commissioned in early Q2-2019.

OPERATING CASH FLOW PER SHARE

• The decrease in operating cash flows from continuing operations to $23 million in Q1-2019 from $46 million in the corresponding quarter of 2018 was due to fewer ounces sold, at a lower gold price and at higher operating costs. This resulted in operating cash flow before non-cash working capital decreasing by 43% from Q1-2018 to $48 million Q1-2019, representing $0.44/share.

Table 16: Operating Cash Flow Per Share

From continuing operations (in US$ million unless stated otherwise)	QUARTER ENDED
	Mar. 31,	Dec. 31,	Mar. 31,
	2019	2018	2018
CASH GENERATED FROM OPERATING ACTIVITIES	23	131	46
Add back changes in non-cash working capital	(25)	79	(37)
OPERATING CASH FLOWS BEFORE NON-CASH WORKING CAPITAL	48	53	84
Divided by weighted average number of O/S shares, in millions	110	108	108
OPERATING CASH FLOW PER SHARE	0.44	0.49	0.78

Operating Cash Flow Per Share is a NON-GAAP measure. For a discussion regarding the company's use of NON-GAAP Measures, please see "note regarding certain measures of performance" in the MD&A.

ADJUSTED NET EARNINGS PER SHARE

• Adjusted net earnings from continuing operations amounted to $(2) million for Q1-2019, a decrease of $40 million compared to Q1-2018, mainly due a lower operating margin and higher taxes which was partially offset by lower depreciation and lower finance costs.
• In Q1-2019, total adjustments of $9 million were made related mainly to non-cash and other adjustments, deferred income tax recovery, stock-based expenses, and gains on financial instruments.

Table 17:  Net Earnings and Adjusted Net Earnings

	QUARTER  ENDED
(in US$ million unless stated otherwise)	Mar. 31,	Dec. 31,	Mar. 31,
	2019	2018	2018
TOTAL NET EARNINGS	(11)	(130)	28
Adjustments (see MD&A)	9	151	10
ADJUSTED NET EARNINGS FROM CONTINUING OPERATIONS	(2)	22	38
Less portion attributable to non-controlling interests	3	6	15
ATTRIBUTABLE TO SHAREHOLDERS	(5)	16	23
Divided by weighted average number of O/S shares	110	108	108
ADJUSTED NET EARNINGS PER SHARE (BASIC)	(0.04)	0.15	0.22
FROM CONTINUING OPERATIONS

Adjusted Net Earnings is a NON-GAAP measure. For a discussion regarding the company's use of NON-GAAP Measures, please see "Note Regarding Certain Measures of Performance" in the MD&A.

CONFERENCE CALL AND LIVE WEBCAST

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

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

The live webcast can be accessed through the following link:
https://edge.media-server.com/m6/p/bddd2jzx

Analysts and investors are also invited to participate and ask questions using the dial-in numbers below:
International: +1 631-510-7495
North American toll-free: 1866 992 6802
UK toll-free: 0800 376 7922

Confirmation code: 6675859

The conference call and webcast will be available for playback on Endeavour's website.
    
Click here to add the webcast reminder to Outlook Calendar

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

QUALIFIED PERSONS

Gérard de Hert, EurGeol, Senior VP Exploration for Endeavour Mining, has reviewed and approved the technical information in this news release. Gérard de Hert has more than 20 years of mineral exploration and mining experience and is a "Qualified Person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").

CONTACT INFORMATION

Martino De Ciccio VP - Strategy & Investor Relations +44 203 640 8665 mdeciccio@endeavourmining.com

Brunswick Group LLP in London Carole Cable, Partner +44 7974 982 458 ccable@brunswickgroup.com

ABOUT ENDEAVOUR MINING CORPORATION

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

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

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

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This news release contains "forward-looking statements" including but not limited to, statements with respect to Endeavour's plans and operating performance, the estimation of mineral reserves and resources, the timing and amount of estimated future production, costs of future production, future capital expenditures, and the success of exploration activities. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "expects", "expected", "budgeted", "forecasts", and "anticipates". Forward-looking statements, while based on management's best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the successful integration of acquisitions; risks related to international operations; risks related to general economic conditions and credit availability, actual results of current exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Endeavour operates. Although Endeavour has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Please refer to Endeavour's most recent Annual Information Form filed under its profile at www.sedar.com for further information respecting the risks affecting Endeavour and its business. AISC, all-in sustaining costs at the mine level, cash costs, operating EBITDA, all-in sustaining margin, free cash flow, net free cash flow, free cash flow per share, net debt, and adjusted earnings are non-GAAP financial performance measures with no standard meaning under IFRS, further discussed in the section Non-GAAP Measures in the most recently filed Management Discussion and Analysis.

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

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