Endeavour Mining plc

Good day and thank you for standing by. Welcome to Endeavour Mining's first quarter 2024 results webcast. At this time, all participants are in listen-only mode. After management presentation, there will be a question and answer session. So for those who wish to ask a question, please dial in to the phone lines for questions. Please note that due to time constraints, we will be prioritizing questions from covering analysts. Today's conference call is being recorded. Any transcript of the call will be available on Endeavor's website tomorrow. I would now like to turn the conference over to Endeavor's Vice President, Investor Relations, Jack Garman. Please go ahead, sir.

Hello, everyone, and welcome to Endeavor's Q1 results webcast. Before we start, please note our usual disclaimer. On the call today, I'm joined by Ian Cockrell, our CEO, Guy Young, our CFO, and Mark Morecambe, our COO. Today's call will follow our usual format. Ian will first go through the highlights of our Q1 2024 results. Guy will present the financials, and Mark will walk you through our operating results by line before handing back to Ian for his closing remarks. We will then open the line up for questions. I will now hand over to Ian.

Thanks very much, Jack. Hello to everyone who's on the call here today, and thank you for joining us. Now, I've now been the Chief Executive Officer of Endeavour for just over a quarter, and I'm actually pleased today to be able to report that whilst this has been a challenging operating quarter, we are still continuing to deliver against our key objectives. On the operational side, we remain on track to achieve our full-year 2024 guidance. And whilst production was lower in Q1, as previously guided, which drove all in sustaining costs higher, operating performance was always strongly weighted towards H2 due to stronger performances that we were anticipating from Hyundai, as well as the two organic growth projects coming online. Now, we've been focused on delivering these growth projects as they will continue to improve the quality of our portfolio and drive higher production at lower costs going forward. On Sunday, we successfully delivered first gold at the Sabadala Masawa BIOX section, which is on budget and on schedule. That's only two years after we launched construction. Now, and we're also making good progress and our Le Figuer development project, where we've already started dry commissioning and we're on track to deliver first gold in late Q2, which is a full quarter ahead of the anticipated schedule. In addition, our exploration program continues to provide us with a strong platform for future growth. And while we're going to prioritize resource-to-reserve conversion at the moment, we've also delivered strong results at the Asafo deposit on the Tanda Iguala property during Q1. And here we continue to see the potential for the endowment of this huge cornerstone asset. It just keeps on growing very pleasingly. During the quarter, we continue to invest in growth, exploration, and shareholder returns. We committed over $235 million Our net debt position increased to, as anticipated, in the order of $831 million, while our leverage remained healthy, well below the one times net debt to adjusted EBITDA. And as our growth projects ramp up, it's certainly going to be where we'll be able to quickly de-lever our financial position back to well below a 0.5 times target leverage ratio. Meanwhile, we've made more progress on our ESG initiatives as we focus on those items that protect the places where we operate and promote sustainable socioeconomic growth in our host communities. And these will also undoubtedly support the long-term success of our business. Over the next few slides, I'll touch upon our progress this quarter before handing over to the team for a more detailed summary. But just moving on to production and all-in sustaining cost. If we look, you can see that our quarterly production and our all-in sustaining cost trend. And production in the first quarter was 219,000 ounces. And that was down 61,000 ounces from the previous quarter, while naturally, the all-in sustaining cost was up quite markedly to $1186 per ounce. Now, we'd always anticipated lower production this quarter, and certainly that's flowed through into the higher oil and sustaining costs for the quarter, but not too dissimilar to that which we saw in Q1 of the 2023 calendar year. The decrease in production was driven primarily by lower production at Hyundai, principally because of the strike, the unscheduled or the illegal strike which took place as well as lower production coming out of Sabadala and Masawa. At Hyundai, we mined the lower-grade carry west pit, whilst we focused on stripping at the higher-grade carry pump and Vindaloo main pits that will provide access to higher-grade ores for the second half of this year. And that was always part of our natural plan for the year. At Sabadala and Masawa, we mined lower-average grade, as we accelerated mining in low-grade areas of the Sabadala pit, as it advances towards the end of its economic life. And there's a reason for wanting to get that out of the way, so Mark will go into a little bit more detail about what that pit is going to be used for. In addition to the expected lower production, as previously disclosed, as I said, we did have that 11-day stoppage to mining and processing at Hyundai, in late January due to the subcontractor-led strike. That certainly impacted our production as well as our costs. The increase in all sustaining costs during the quarter largely is a result of a decrease in production, and I'll highlight that over the next couple of slides. Looking at the next slide, you can see the quarter-on-quarter changes in our group production. As I just mentioned, production was lower at Hyundai and Sabudala Masawa, while both ITTI and MANA delivered stronger quarter-on-quarter production. Production at ITTI increased and is expected to be H1-weighted due to the greater availability of high-grade ore in the first half of this year, while in Q1, MANA had its strongest quarter of production in the last 12 months due to the continued ramp-up of underground mining activities specifically in the Werner underground deposit. On slide nine, you can see the quarter-on-quarter changes in our all-in sustaining costs. While costs went up during Q1, The main driver of the cost increase was obviously the lower gold sales, and that accounted for approximately $217 per ounce higher oil and sustaining costs quarter on quarter. As I've already noted, we certainly expect our gold production to improve significantly in H2, and that will automatically drive down the oil and sustaining costs in the latter part of the year. Improvements in our mining costs partially offset the slight increases in processing costs, Really, that was due to increased power costs as we had to generate a lot more of our own power and slightly harder rock that we were processing. Also, sustaining capital and royalties were up this year as a result of the higher gold price. On slide 10, I'd just like to reiterate that safety is of huge importance to us. And while we're proud to say that our lost time injury frequency rate certainly remains at an industry-leading 0.11. We were very saddened to report in February, and I did report this at the year-end results, that sadly a contractor colleague had passed away in an incident at a mine in Burkina Faso. And I think it's fair to say that this is absolutely a clear reminder of the need for us to retain vigilance Irrespective of how good we think our safety performance is, we can never ever lose sight of the fact that we need to really focus in on our health and safety. However, in terms of production and cost, we are on track to meet our full year production and all-in sustaining cost guidance. Again, because our performance, as planned, very much weighted towards the second half of the year. Moving on to Sabadala-Masawa expansion on slide 11, we're delighted to announce that we've delivered our first gold from the Gravity Circuit on the 18th of April and, pleasingly, first gold from the BIOX circuit that was actually on Sunday over the weekend on the 28th of April. And this is definitely going to help improve our portfolio quality, and certainly has upgraded that mine's ability to remain a top-tier operation. We're particularly proud of this achievement because having built the expansion project in only two years, and we've delivered the project on budget and on schedule, we did that with over 3.5 million man-hours worth and without any sustaining lost-time injury. Now, we're now shifting our focus to the ramp-up at this particular project, and we're on track to deliver commercial production in quarter two, and then get nameplate capacity from the Biox plant of 1.2 million tons per annum in Q3, which should give us a full nameplate quarter of production in Q4, again, supporting stronger group production and cost performance throughout the year. At our Figue project, we started to dry commission the dry commissioning of the front end of the plant, and we're making good progress towards the production of first gold. Again, construction is on budget and pleasingly ahead of schedule in this case. We anticipate that we're going to be delivering first gold towards the end of Q2, which is a full quarter ahead of the previously announced schedule. Once completed, the FIGE is going to be another cornerstone asset for the company with an envisaged annual production of more than 200,000 ounces of gold over its 13-year life and at a low oil and sustaining cost of at or around $900 per ounce. As you can see, we're certainly pleased that the construction activities in our two growth projects are now largely de-risked, and we have very good visibility towards increased production at lower oil and sustaining costs and significantly lower growth capex once this phase of growth is completed. And that will lead to the turnaround in our net debt position towards the second half of this year. On slide 13, just to give you a brief update on our ongoing exploration effort, during Q1, we launched our $65 million 2024 exploration program. But in Q1, we actually spent $25 million as we accelerated the drill program ahead of the wet season later on in the year. And we're prioritizing the conversion of resources to reserves at our key asset. as well as identifying new resources at existing operations, particularly at Sabadala Masawa, which is very much a target-rich project. And it's certainly the largest exploration focus for this year. And we're going to continue with extra drilling at Asafo at the Matanda Iguala property. Now, as we said previously, we've already discovered over 10 million ounces since 2021. And we're thrilled that we remain on track to discover our target of between 12 and 17 million ounces of indicated resource by 2025. And we're going to prioritize the cornerstone assets as well as tender iguela to make sure that we deliver on the balance of that previously stated target. Looking in a little bit more detail at Asafo, we have defined already a 4.5 million ounce resource at a grade of two grams a ton. It's one of the best discoveries in West Africa for the last decade. We discovered that for $11 an ounce within a two-year period. And I'm very pleased to say that in Q1, we've had more positive drilling results at the deposit. We've identified additional mineralization, a long strike of existing resources towards the northwest as well as the southeast, so expanding in both directions along its strike. Successfully, we've extended the mineralized trend by over 10%, from 3.3 kilometers to 3.7 kilometers. And I think these results continue to demonstrate the prospectivity of this particular area, which we continue to aggressively explore, whilst the mineralization remains open in most directions. On the wider Tanda-Iguala property, We've also received some encouraging drilling results, particularly at Parlour Trend 2 satellite target, which is in close proximity to Asafo in the southwest. We've delineated an 1,800-meter mineralized trend. We're going to be doing more work to try to expand and extend this mineralized envelope over the remainder of the year. We're convinced that the Asafo project will not only be another cornerstone asset for Endeavour, as we advance the PFS work this year. We're going to continue to explore the 20 kilometer long mineralized corridor, and we believe that we'll be able to discover even more resources. Turning now to slide 15. You can see that despite our continued investments in organic growth, shareholder returns, and exploration, our business continues to have low leverage with the ability to fund organic growth whilst delivering strong shareholder returns. At the end of the first quarter, we had $481 million in available liquidity. As our two growth projects ramp up in the second half of the year, we're going to begin to focus on debt reduction to further strengthen our financial position while still having the discipline to maintain a robust shareholder return program. On slide 16, you can see the details of our shareholder return program. And since the introduction of this program in 21, we have returned $916 million to shareholders through dividends and buybacks, which is equivalent to $211 for every ounce of gold that we've produced during that period. During the quarter, we paid out $100 million in dividends, completing the final payment in our existing shareholder return program. We also paid $30 million, or we spent $30 million in share buybacks during the period, continuing to demonstrate our commitment to paying supplemental shareholder returns, particularly when we see severe undervaluation in our stock, which clearly in Q1 was the case. Now, we're well positioned to deliver increased shareholder returns using a similar framework, in the next shareholder return program, and we expect to outline details of that towards the middle of the year, maybe in the beginning second half of the year, and we'll come back with more details to shareholders as to what we're going to be doing. Before I hand over to Guy, just a quick word about ESG. In January, a non-exec director, Katia Lawson, was appointed in my place as chair of the board's ESG committee. Now, responsible mining can have a huge positive socioeconomic impact, particularly in developing and emerging economies such as West Africa. Under Kachi's guidance, I am totally satisfied that we're going to continue to work to deliver sustainable value for all our stakeholders in line with the best ESG practices and making sure that we comply with good governance standards. As you can see from the slide, our targets for 2024 remain ambitious and they're aligned with our overall strategy to be a trusted partner. We look forward to reporting back on these initiatives due the course of the year ahead. With that introduction, let me hand you over to Guy, who will take you through the financial highlights. Guy, over to you. Thanks, Ian.