Caledonia Mining Corporation Plc press release
Endeavour Reports Q2-2024 Results
NYSE - New York Stock Exchange · Jersey
ENDEAVOUR REPORTS Q2-2024 RESULTS Adjusted EBITDA of $249m • $435m minimum dividend for 2024 & 2025 • $120m shareholder returns for H1
| OPERATIONAL AND FINANCIAL HIGHLIGHTS
H1-2024 production of 470koz at an AISC of $1,237/oz; Q2-2024 production of 251koz at $1,287/oz On track to achieve production guidance with performance weighted towards H2-2024, AISC expected to be near the top-end of the range Adjusted EBITDA of $249m for Q2-2024, up 17% over Q1-2024 Adjusted Net Earnings of $3m (or $0.01/sh) for Q2-2024 Operating Cash Flow of $258m (or $1.05/sh) for Q2-2024 Healthy financial position with stable net debt of $835m at end Q2-2024, as growth phase nears completion
SHAREHOLDER RETURNS
Updated shareholder returns policy comprised of minimum dividends totalling $435m for 2024 and 2025, that are expected to be supplemented with additional dividends and share buybacks $100m dividend declared for H1-2024, equivalent to $0.41/sh, that was supplemented with $20m of share buybacks; equivalent to a total return of $255/oz of gold produced in H1-2024
ORGANIC GROWTH First gold pours achieved on budget and on schedule at Sabodala-Massawa BIOX® Expansion and Lafigué during Q2-2024, with both projects on track to ramp up to nameplate capacity in Q3-2024 Strong exploration efforts with $56m spent in H1-2024; increased FY-2024 guidance from $65m to $77m due to success at Houndé, Ity and Sabodala-Massawa, with positive reserve and resource updates expected at year-end Tanda-Iguela exploration programme identified shallow mineralisation at the Pala Trend 3 and recently discovered Koume-Nangare targets, both within close proximity to Assafou; with updated resources expected by year-end |
London, 31 July 2024 – Endeavour Mining plc (LSE:EDV, TSX:EDV, OTCQX:EDVMF) (“Endeavour”, the “Group” or the “Company”) announces its operating and financial results for Q2-2024 and H1-2024, with highlights provided in Table 1 below.
_Table 1: Q2-2024 and H1-2024 Highlights from continuing operations __1 _
| All amounts in US$ million unless otherwise specified | THREE MONTHS ENDED | SIX MONTHS ENDED | Δ Q2-2024 vs. Q1-2024 | | | | | | 30 June 2024 | 31 March 2024 | 30 June 2023 | 30 June 2024 | 30 June 2023 | | | | | | | | | | | | | | OPERATING DATA | | | | | | | | | Gold Production, koz | 251 | 219 | 268 | 470 | 511 | +15% | | | Gold sold, koz | 238 | 225 | 269 | 463 | 521 | +6% | | | All-in Sustaining Cost 2,3 , $/oz | 1,287 | 1,186 | 1,000 | 1,237 | 978 | +9% | | | Realised Gold Price 4 , $/oz | 2,287 | 2,041 | 1,947 | 2,167 | 1,914 | +12% | | | CASH FLOW | | | | | | | | | Operating Cash Flow before changes in working capital | 213 | 137 | 161 | 351 | 380 | +55% | | | Operating Cash Flow before changes in working capital 2 , $/sh | 0.87 | 0.56 | 0.65 | 1.43 | 1.53 | +55% | | | Operating Cash Flow | 258 | 55 | 147 | 313 | 337 | +369% | | | Operating Cash Flow 2 , $/sh | 1.05 | 0.22 | 0.59 | 1.28 | 1.36 | +377% | | | PROFITABILITY | | | | | | | | | Net Earnings Attributable to Shareholders | (60) | (20) | 78 | (80) | 77 | n.a. | | | Net Earnings, $/sh | (0.24) | (0.08) | 0.32 | (0.33) | 0.31 | n.a. | | | Adj. Net Earnings Attributable to Shareholders 2 | 3 | 41 | 54 | 45 | 119 | (93)% | | | Adj. Net Earnings 2 , $/sh | 0.01 | 0.17 | 0.22 | 0.18 | 0.48 | (94)% | | | EBITDA 2 | 193 | 156 | 273 | 349 | 441 | +24% | | | Adj. EBITDA 2 | 249 | 213 | 253 | 461 | 493 | +17% | | | SHAREHOLDER RETURNS 2 | | | | | | | | | Shareholder dividends paid | — | 100 | — | 100 | 100 | n.a. | | | Share buybacks | 8 | 13 | 9 | 20 | 20 | (38)% | | | ORGANIC GROWTH 2 | | | | | | | | | Growth capital spend | 93 | 99 | 104 | 192 | 176 | (6)% | | | Exploration spend | 31 | 25 | 30 | 56 | 51 | +24% | | | FINANCIAL POSITION HIGHLIGHTS 2 | | | | | | | | | Net Debt | 835 | 831 | 171 | 835 | 171 | —% | | | Net Debt / LTM Trailing adj. EBITDA 5 | 0.81x | 0.80x | 0.15x | 0.81 | 0.15x | +1% | |
1 Continuing Operations excludes the non-core Boungou and Wahgnion mines which were divested on 30 June 2023. 2 This is a non-GAAP measure, refer to the non-GAAP Measures section for further details. 3 Excludes costs and ounces sold related to pre-commercial production at the Groups growth projects. 4 Realised gold prices are inclusive of the Sabodala-Massawa stream and the realised gains/losses from the Group’s revenue protection programme . 5 Last Twelve Months (“LTM”) Trailing EBITDA adj includes EBITDA generated by discontinued operations.
Management will host a conference call and webcast today, 31 July 2024, at 8:30 am EDT / 1:30 pm BST. 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 the first half of 2024 we continued to make progress against our strategic objectives. We are delighted to have achieved first gold at both of our growth projects, which will improve the geographic diversification and quality of our portfolio, while underpinning a stronger H2 performance.
On the operational side, production remains on track to achieve guidance for the twelfth consecutive year with performance strongly weighted towards the second half of the year due to stronger performances expected at Houndé, Lafigué and the Sabodala-Massawa BIOX® Expansion. Our all-in sustaining cost is expected to be near the top end of the guidance range, compounded by the lower grid power availability in Côte d’Ivoire and Burkina Faso during H1, higher royalty rates due to the higher gold prices and lower performance at Sabodala-Massawa. We have already seen significant improvements in power availability in Q3 that will support an improved H2 performance.
The successful gold pours at our two growth projects during the quarter, both on budget, on schedule and in under two years, extends our track record of delivery, having now built five large capital projects in West Africa in the last ten years. We are now focussed on advancing the Assafou project on the Tanda-Iguela property, with a preliminary feasibility study expected by year-end. At the same time we continue to explore the Assafou deposit and the targets surrounding it, where we have identified additional shallow mineralisation in close proximity to Assafou, reinforcing the project’s potential to become a cornerstone complex for Endeavour.
As we approach the completion of our current phase of growth, we are pleased to announce a new shareholder returns programme, that will be comprised of $435 million of minimum dividends over the next two years, which we expect to supplement with additional dividends and share buybacks. For H1-2024 we have declared a $100 million dividend, which we have supplemented with an additional $20 million of share buybacks. Upon payment of our H1-2024 dividend, we will have returned more than $1.0 billion to shareholders since our first dividend payment in Q1-2021, equivalent to $223 for every ounce produced over the same period.
Finally, to the changes we announced today to our executive management team. Mark Morcombe, EVP and COO, and Jono Lawrence, EVP Exploration, are leaving to pursue other opportunities and I would like to thank them for their years of dedicated service and significant contributions. We have reorganised the leadership to strengthen the operational and technical management within the team and I welcome Djaria Traore as EVP Operations and ESG and Martin White as EVP and Chief Technical Officer to their new roles. Collectively, we look forward to continuing to deliver on our strategy with a restructured management team, to further strengthen our business and benefit all our stakeholders.”
MANAGEMENT CHANGES
As the Company transitions into a new phase focussed on maximising the performance of its existing operations to support its ambitious capital allocation priorities, the executive leadership team will be restructured, effective 1 September 2024, to ensure that the Company continues to deliver against its strategic objectives.
Djaria Traoré, formerly Executive VP Supply Chain and ESG has been appointed Executive VP Operations and ESG. In her new role, Djaria will continue to lead the ESG strategy and, additionally, will take executive responsibility for operations.
Martin White, formerly Executive VP Projects has been appointed Executive VP and Chief Technical Officer. In this role, Martin will continue to oversee project development and bring his extensive experience to further strengthen our technical services capabilities.
Djaria and Martin will assume the operational responsibilities of Mark Morcombe, Executive VP and COO who is leaving the company. The Board and his colleagues thank him for five years of dedicated service and, in particular, his role in improved operational processes and reinforcing our safety culture.
Jono Lawrence, Executive VP Exploration is also leaving the company and will be replaced by a new Executive VP Exploration & Geology to be announced shortly. Jono has played a pivotal role in leading our successful exploration campaign and we thank him for his significant contribution during his eight years of dedicated service.
Morgan Carroll, currently Executive VP Corporate Finance and General Counsel has been appointed Executive VP and Chief Commercial Officer and will be responsible for Supply Chain. Morgan’s former responsibilities for Corporate Finance will be transitioning, over a period of time, to Guenole Pichevin, Executive VP Strategy and Business Development, while Samantha Campbell currently Deputy General Counsel, will assume the role of Executive VP and Group General Counsel.
Following these changes, the Executive Committee will be composed of nine members with a balanced mix of gender, experience, technical skills and operational expertise, to lead us into this new phase with increased confidence.
SHAREHOLDER RETURNS PROGRAMME
Endeavour implemented a shareholder returns policy in June 2021 that was comprised of a minimum progressive dividend set at $125.0 million, $150.0 million and $175.0 million for FY-2021, FY-2022 and FY-2023 respectively, with the ability to provide further supplemental returns through additional dividends and share buybacks. Over the shareholder returns policy period, Endeavour returned $903.0 million to shareholders, equivalent to $211 dollars for every ounce produced, including $600.0 million of dividends and $303.0 million of share buybacks, which was 78% above the minimum commitment, reiterating Endeavour’s commitment to paying supplemental returns. Following the successful completion of the previous policy, Endeavour is implementing a new shareholder returns policy, to reflect its transition from a phase focused on investment, to one focused on cash flow generation. The new shareholder returns policy is comprised of a minimum dividend of $210.0 million and $225.0 million for FY-2024 and FY-2025 respectively, that is expected to be supplemented with additional dividends and share buybacks. The minimum dividend is expected to be paid semi-annually, provided that the prevailing gold price for the dividend period is at, or above, $1,850/oz and the Company has a healthy financial position. Supplemental returns are expected to be paid in the form of dividends and opportunistic share buybacks if the gold price exceeds $1,850/oz and if the Company has a healthy financial position.
Table 2: Cumulative Shareholder Returns
| (All amounts in US$m) | | MINIMUM DIVIDEND COMMITMENT | SUPPLEMENTAL DIVIDENDS | BUYBACKS COMPLETED | TOTAL RETURN | △ ABOVE MINIMUM COMMITMENT | | | FY-2020 | 60 | — | — | 60 | — | | 2021-2023 Shareholder Returns Programme (completed) | FY-2021 | 125 | 15 | 138 | 278 | +153 | | FY-2022 | 150 | 50 | 99 | 299 | +149 | | | FY-2023 | 175 | 25 | 66 | 266 | +91 | | | 2024-2025 Shareholder Returns Programme (ongoing) | H1-2024 | 100 | — | 20 | 120 | +20 | | H2-2024 | 110 | — | — | 110 | — | | | FY-2025 | 225 | — | — | 225 | — | | | TOTAL | TOTAL | 945 | 90 | 323 | 1,358 | 413 |
For H1-2024, Endeavour is pleased to declare a dividend of $100.0 million or $0.41/sh. The ex-dividend date for the H1-2024 dividend will be 12 September 2024 and the record date will be 13 September 2024. The dividend will be paid on or about 10 October 2024 (the “Payment Date”). During H1-2024, shareholder returns continued to be supplemented by share buybacks with $20.1 million or 1.2 million shares repurchased during the period, of which, $7.5 million or 0.4 million shares were repurchased during Q2-2024. Following the payment of the H1-2024 dividend, Endeavour will have returned more than $1,023.0 million to shareholders, including $700.0 million of dividends and $323.0 million of share buybacks, equivalent to over $223/oz produced over the same period. Shareholders of shares traded on the Toronto Stock Exchange will receive dividends in Canadian Dollars (“CAD”) but can elect to receive United States Dollars (“USD”). Shareholders of shares traded on the London Stock Exchange will receive dividends in USD, but can elect to receive Pounds Sterling (“GBP”). Currency elections and elections under the Company's Dividend Reinvestment Plan ("DRIP") must be made by shareholders prior to 17:00 GMT on 19 September 2024. Dividends will be paid in the default or elected currency on the Payment Date, at the prevailing USD:CAD and USD:GBP exchange rates on 23 September 2024. This dividend does not qualify as an “eligible dividend” for Canadian income tax purposes. The tax consequences of the dividend will be dependent on the particular circumstances of a shareholder. Endeavour is pleased to continue to offer a DRIP to offer existing shareholders the opportunity, at their own election, to increase their investment in Endeavour by receiving dividend payments in the form of common shares in the Company. Participation in the DRIP is optional and available to shareholders, subject to local law, who hold shares on the London Stock Exchange or on the Toronto Stock Exchange. Participants may opt to reinvest all, or any portion of their dividends in the DRIP. Custodians are reminded that as part of the terms and conditions of the DRIP, if you make a partial election on the DRIP, the remaining shares on your holding will be paid out automatically in GBP and not the default currency of your specific holding(s). The enrolment form is available on Endeavour’s website, alongside the DRIP circular, which will also be submitted to the National Storage Mechanism in accordance with Listing Rule 9.6.1. The last election date for participation in the H1-2024 DRIP for beneficial shareholders who hold shares through the Canadian Depository System (“CDS”) will be 19 September 2024, for all other eligible shareholders the last election date will be 19 September 2024. In accordance with the DRIP, Endeavour’s Transfer Agent, Computershare, will use cash dividends payable to participating shareholders to purchase common shares in the open market on the Toronto Stock Exchange and the London Stock Exchange at the prevailing market price.
OPERATING SUMMARY
Strong safety performance for the Group, with a Lost Time Injury Frequency Rate (“LTIFR”) from continuing operations of 0.11 for the trailing twelve months ending 30 June 2024. Q2-2024 production amounted to 251koz, an increase of 32koz over Q1-2024, due to higher production at Houndé, Ity and Sabodala-Massawa, which was partially offset by lower production at Mana. Production increased at Houndé, Ity and Sabodala-Massawa largely due to increased grades processed, in addition to increased utilisation at Houndé following the 11-day strike in the prior period. Production decreased at Mana due to lower grades processed as mining focused on increased development activities in the Siou and Wona underground deposits, offsetting stoping activity in the Siou deposit. Q2-2024 AISC amounted to $1,287/oz, an increase of $101/oz over Q1-2024 due largely to increased processing costs reflecting the lower grid power availability as well as increased costs at Sabodala-Massawa and Mana due to the impact of lower volumes of gold sold. Grid power availability has been temporarily reduced in Côte d’Ivoire due to several breakdowns at natural gas power plants that impacted 250MW of capacity from January 2024 and a further 650MW of combined capacity from early April. Further, grid power availability in Burkina Faso was also impacted as approximately a quarter of Burkina Faso’s power is imported from Côte d’Ivoire. In Côte d’Ivoire, at the Ity mine grid utilisation decreased from an average of 69% in FY-2023 to 18% in Q2-2024, which drove increased power costs as grid power costs approximately $0.18/kWh compared to self-generated power costs of approximately $0.28/kWh in Q2-2024. In Burkina Faso, at the Houndé and Mana mines, grid utilisation decreased from an average of 91% in FY-2023 to 27% in Q2-2024, which drove increased power costs as grid power costs approximately $0.23/kWh compared to self-generated power costs of approximately $0.49/kWh in Q2-2024.
The approximate impact of changes in grid power availability on AISC was +$66/oz for H1-2024, including +$52/oz for Q2-2024, when compared with the prior period. Grid power availability has shown improvement in early Q3-2024, in line with the commencement of the wet season and the completed repair of the Ciprel power plant, while work to fully restore the Azito power plant is still underway. During July, our grid power utilisation at the Ity mine increased to 62%, from 18% in Q2-2024 and our grid power utilisation at the Houndé and Mana mines increased to 72%, from 26% in Q2-2024.
Table 3: Group Production
| | THREE MONTHS ENDED | SIX MONTHS ENDED | | | | | All amounts in koz, on a 100% basis | 30 June 2024 | 31 March 2024 | 30 June 2023 | 30 June 2024 | 30 June 2023 | | Houndé | 64 | 42 | 72 | 106 | 119 | | Ity | 96 | 86 | 86 | 182 | 177 | | Mana | 35 | 42 | 31 | 77 | 75 | | Sabodala-Massawa 1 | 57 | 49 | 79 | 105 | 140 | | Lafigué 1 | 0.5 | — | — | 0.5 | — | | PRODUCTION FROM CONTINUING OPERATIONS | 251 | 219 | 268 | 470 | 511 | | Boungou 2 | — | — | 14 | — | 33 | | Wahgnion 2 | — | — | 30 | — | 68 | | GROUP PRODUCTION | 251 | 219 | 311 | 470 | 612 |
1 Includes pre-commercial ounces that are not included in the calculation of All-In Sustaining Costs. 2 The Boungou and Wahgnion mines were divested on 30 June 2023.
Table 4: Group All-In Sustaining Costs
| All amounts in US$/oz | THREE MONTHS ENDED | SIX MONTHS ENDED | | | | | 30 June 2024 | 31 March 2024 | 30 June 2023 | 30 June 2024 | 30 June 2023 | | | Houndé | 1,472 | 1,572 | 1,085 | 1,514 | 1,113 | | Ity | 885 | 884 | 797 | 885 | 764 | | Mana | 1,927 | 1,453 | 1,481 | 1,661 | 1,277 | | Sabodala-Massawa 1 | 1,164 | 947 | 762 | 1,050 | 774 | | Corporate G&A | 48 | 49 | 56 | 48 | 56 | | AISC FROM CONTINUING OPERATIONS | 1,287 | 1,186 | 1,000 | 1,237 | 978 | | Boungou 2 | — | — | 2,147 | — | 1,639 | | Wahgnion 2 | — | — | 1,817 | — | 1,566 | | GROUP AISC 3 | 1,287 | 1,186 | 1,136 | 1,237 | 1,080 |
1 Excludes pre-commercial costs associated with ounces from the BIOX® expansion project 2 The Boungou and Wahgnion mines were divested on 30 June 2023. 3 This is a non-GAAP measure, refer to the non-GAAP Measures section for further details.
FY-2024 OUTLOOK
The Group remains on track to achieve its FY-2024 production guidance of 1,130 – 1,270koz at an AISC near the top end of the $955 – 1,035/oz guided range, with performance strongly weighted towards H2-2024, as previously guided.
Table 5: FY-2024 Production Outlook
| | H1-2024 ACTUALS | FY-2024 GUIDANCE | FY-2024 OUTLOOK | | (All amounts in koz, on a 100% basis) | | | | | Houndé | 106 | 260 - 290 | ON TRACK | | Ity | 182 | 270 - 300 | ABOVE TOP-END | | Mana | 77 | 150 - 170 | ON TRACK | | Sabodala-Massawa | 105 | 360 - 400 | BELOW LOWER-END | | Lafigué | — | 90 - 110 | ON TRACK | | Group Production | 470 | 1,130 - 1,270 | ON TRACK |