Endeavour Mining plc

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

Hello, everyone, and welcome to Endeavor's Q3 2024 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 Giaria Traore, our Executive Vice President of Operations and ESG. Today's call will follow our usual format. Ian will first go through the highlights, Guy will present the financials, and Jaria will walk you through our operating results by mine before handing back to Ian for his closing remarks. We will then open the line up for questions. With that, I will now hand over to Ian.

Thank you, Jack, and hello to everyone joining us on the call today. And today I'm speaking to you from our office in Abidjan in Cote d'Ivoire where I have Jaria with me because as a team we recently visited a new Lefige mine and we did a board site visit. And it's really pleasing to report that Lefige is performing very well and continues to be an excellent illustration of our ability to discover, develop and operate high quality mines in West Africa. For Q3, we certainly continued to deliver against our strategic objectives as we bought both of our growth projects into commercial production. And that supported our strongest quarter of production so far this year. For the full year, we expect 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, which Jerry will go into in a little bit more detail shortly. We're on track to deliver a materially stronger H2 as we guided at the start of the year, and we anticipate a strong Q4 performance as the projects deliver a full quarter at Nameplate and Amarna and Hyundai Mines increased production at lower cost. As we completed this recent phase of growth, we started to generate positive free cash flow with around $100 million generated during the quarter, which we're going to be building on in Q4 and beyond. Clearly, the inflection point that everyone has been looking for, and that's being delivered. As our earnings and cash flow generation increased, we were pleased to start delivering on our capital allocation priorities, substantially lowering our gross debt as we repaid $160 million of our revolving credit facility. Our leverage has also now turned a corner and we are trending towards our 0.5 times target. And importantly, we are delivering returns to shareholders because so far in 2024, we've returned $229 million and we will return at least $435 million in dividends to shareholders for both 2024 as well as 2025, which we're supplementing with additional dividends and opportunistic share buybacks. Our long-term growth is underpinned by the Asafo project and our exciting exploration program. And we see opportunity to organically to our 1.5 million ounce portfolio objectives before the end of this decade. And we expect to do this whilst maintaining best-in-class margins. Finally, we're continuing to progress our ESG strategy, and our 2023 tax and economic contribution report is a testament to those efforts, highlighting a $2.3 billion economic contribution to our host countries. Over the next few slides, I'll touch upon our progress this quarter before handing over to the team for a more detailed update. As mentioned, We were delighted to achieve commercial production at both growth projects during the quarter, and I'm pleased to report that both projects are ramping up in line with their plans as we achieve nameplate capacity throughput at both operations late in Q3, and we're expecting that to continue through Q4. We delivered around $100 million of free cash flow for the quarter, which supported the improvement in our leverage I mentioned, as well as the payment of our H1 dividend. We are expecting to grow free cash flow generation going forward, and that will support our near-term capital allocation priorities whilst positioning the business well for future growth. Turning to slide eight, you can see our quarterly production and our all-in sustaining margin trend. Production has increased every quarter this year, as previously guided, to 270,000 ounces in Q3 which is an increase of 19,000 oz over the previous quarter, with increased production from Hyundai and Lafayette, and a whole 51,000 oz better than in Q1. Our all-in sustaining margin also increased by $65 per oz, largely due to our stable all-in sustaining cost and improving gold price. On the safety side, Our industry-leading lost-time injury frequency rate remains stable, and it's well below the industry average, which we're very proud of. Our production is expected to be at or around the low end of guidance for the year, which is predicated on a significant increase in quarterly production in Q4, which comes from Hyundai, Mana, and Savardala, largely due to expected higher grades, as well as lower rainfall, which has been well above average so far this year, almost twice the normal annual average. The growth projects will also support higher production, given that they are on track for a full quarter at main plate in quarter four. Our all-in sustaining cost is expected to be slightly above the top end of the range by the end of the year, due to high gold prices, which increased our royalty costs, lower power availability in H1, increasing costs, and the underperformance of the Sabadala Masawa CIL operation so far this year. However, our Q4 weighted production will support and improve all in sustaining cost, bringing us closer to the royalty-adjusted top end of the guidance range. On slide 10, you can see how our cost profile compares with our peers. Importantly, we remain one of the lowest cost producers in the sector, firmly in the lowest cost quartile. Whether you compare all in sustaining cost or all in cost, we are still one of the sector leaders. We've been able to maintain this cost performance largely because of our high quality asset base, but also because of the availability of highly skilled people who want to come and work for us. Stable consumer pricing, thanks to our large long-term contracts, and the cost benefit of two-thirds of our cost being incurred in West African SIFA, which is paid to the Euro, whilst we sell our gold in US dollars. In other words, a very nice internal natural hedge. Given that we are well shielded from some of the cost pressures that our peers are facing, and that our projects are helping to progressively improve the quality of our portfolio, we expect to organically grow our production towards our 1.5 million portfolio objectives before the end of the decade, whilst we do maintain best-in-class margins. On slide 11, you can see that we generated approximately $100 million of free cash flow during the quarter, a quarter-on-quarter increase of $166 million, excluding the impact of the prepayment in the prior quarter. due to the increased levels of production, reduced growth capital and taxes, and the higher prevailing gold price. We generated $360 of free cash flow for every ounce produced in the quarter. Moving forward, we expect to continue to grow this free cash flow as the growth projects continue to ramp up and our cost performance improves. On slide seven, you can see our net debt was stable as we completed our growth phase. but stronger earnings supported an improvement in our leverage, and we're focused on reducing that leverage back towards a 0.5 target in the near term. Given that we expect to grow free cash flow generation, we repaid $160 million on our revolving credit facility, which we're pleased to say that we also successfully refinanced after quarter end. Guy will provide some more details on that in his section. In this new cash flow generative phase, our capital allocation focus is on delivering attractive shoulder returns as well as making sure that we improve our balance sheet. As you can see on slide 13, we've just paid our H1 2024 dividend of $100 million, which brings our total return this year to $229 million. We're on track to return at least $1.4 billion to shareholders by the end of 2025, which is approximately a quarter of our market capitalization being returned over the five-year period from 2020. But we don't intend to stop there, as we believe this business is well positioned to deliver significant supplemental returns and sustain an attractive return through the cycle. As I already mentioned, our growth projects achieve commercial production during the quarter and are ramping up in line with expectations. And importantly, both projects exited Q3 at or above 100% of design nameplate, which we expect to maintain for Q4 and beyond into 2025. Now that we've completed these projects, we're starting to look at ways to optimize, and as we have done with all of our other projects. We certainly expect the BIOX expansion and Lafayette Marriott plants to outperform their design nameplates as we systematically chip away and de-bottleneck any throttle points that we have in those operations. On slide 15, our exploration program shows that we're on track to deliver against a five-year target to discover between 12 to 17 million ounces of M&I resource at the industry-leading discovery cost of less than $25 per ounce. So far this year, we spent $74 million focused on identifying new resource and converting resources to reserves at our cornerstone assets to support our near-term production targets. And that's with particular reference to Sabadala Masawa, where we've identified the Kiesta Sea and Yakufiri East targets support production in Q4, as well as going into 2025. Also, looking at Mamassoto, Sokoto, and Kuungwinde targets. As well, at ITI, we defined mineralization between the existing deposits, which we referred to previously as the ITI Donut, and we expect to contribute, this is going to contribute to a significant increase in endowment, and support higher levels of production over the longer term. On the greenfield side, looking at the ASAFU project and the wider Tanda Iguela property, which we're showing here on slide 16, as the PSS work is well advanced, and we expect to publish the results later in the quarter. We've been exploring some of the satellite targets on the property in close proximity to the ASAFU project. Drilling at the parlor trend, number three target, which is less than one kilometer southwest of Asafo, we defined a shallow, high-grade mineralization over approximately a one kilometer trend that is part of the same mineralized system as Asafo, as you can see in the right-hand picture there. Mineralization is hosted on the greenstone rocks at Parla, below the Asafu Basin, which has proven that both Tarquane and Beryllium-style mineralization exists in the area, which increases the prospectivity of several proximal Beryllium-style targets. While the PFS for Asafu will be based on last November's resources, with a large proportion expected to be converted to reserves, we will be well placed to incorporate the additional exploration upside that we're seeing into the reserves and resources ahead of our DFS, which we expect to launch once the PFS is completed. Finally, before I hand over to Guy, I just want to touch briefly on ESG. As we disclosed in our recent economic contribution report, we've made a $2.3 billion economic contribution to our host countries over the last year. We've increased our commitment on key initiatives that protect the people and places where we operate and support the long-term success of our business. This in addition to the social and environmental initiatives, some of which you can see detailed here. With that, let me hand you over to Guy to talk through our financial results. Guy, over to you.