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.

Thank you, Ian, and hello, everyone. In terms of the Q3 financial results on slide 19, as Ian mentioned, we delivered our strongest quarter of production for the year, which coupled with the higher realized gold prices underpinned an increase in our adjusted EBITDA, net earnings, as well as operating and free cash flow, net of the prepayment from the prior period. I'd like to walk you through a couple of these details, starting with our production and all-in sustaining costs on slide 20. Our production increased by 19,000 ounces to 270,000 ounces for the quarter due to the ramp-up of the Sabadala-Masawa BIOX and Lefige operations, which achieved commercial production on the 1st of August, as well as higher production at Hyundai. This was partially offset by lower production at ITTI, MANA, and the Sabadala-Masawa CIL operation. our all-in sustaining costs remain stable quarter-on-quarter at $1,287 per ounce. We expect operations to continue to improve in the fourth quarter as we anticipate materially stronger production and significantly lower costs. If we turn to slide 21, our year-to-date all-in sustaining cost is $1,256 per ounce, and it is trending above the top end of the full year guidance range, which was based on a $1,850 gold price. The year-to-date all-in sustaining cost has been impacted by a number of factors. Firstly, high realized gold prices, increasing our sliding scale royalty costs by some $34 per ounce. Secondly, the previously disclosed lower grid power availability, largely in the first half of the year, which required the use of higher cost self-generated power, impacting year-to-date ASIC by some $35 per ounce. And then thirdly, the lower-than-expected production from the Sabadala Masawa CIL plant, impacting year-to-date ASIC by around $80 per ounce. Combined, these representing a $150 per ounce impact on our ASIC. While year-to-date ASIC is above the full-year guided range, our strongly Q4-weighted production and the associated lower costs are expected to improve our full-year ASIC significantly, although the prevailing higher gold prices will slightly offset this. Moving now to earnings, on slide 22, our adjusted EBITDA increased by 27% quarter-on-quarter, supported by higher production at higher gold prices, while our strong EBITDA margin remained stable at 45% as we focused on preserving our margins in this higher gold price environment. The quarterly EBITDA led to a significant improvement in our operating cash flow as seen on slide 23. To illustrate the underlying quarter-on-quarter improvement, we are showing the underlying operating cash flow in Q2 of $108 million before the prepayment that we executed. On this basis, quarter-on-quarter, our operating cash flow increased by 133% to $252 million thanks to the higher gold production, gold prices, and significantly lower taxes in Q3. On slide 24, you can see a bridge of quarter over quarter variances in operating cash flow. You'll note the realized gold price for continuing operations increased by $55 per ounce, providing a positive impact of $15 million. Gold sold from continuing operations during the third quarter rose to 280,000 ounces, an increase of 42,000 ounces from Q2-24, and a positive impact of $96 million. Income tax payments decreased by $99 million to $65 million due to decreased withholding tax payments and the timing of income tax payments at ITI, Sabadala Masawa, and Hyundai. This was partially offset by increased cash operating expenses as gross mining and processing costs increased due to the project ramp-ups as well as a decrease in the working capital inflow due to an increase in trade receivables relating to VAT and gold sales. Turning to slide 25, our net debt was stable in Q3 as we completed our investment phase and started de-levering. Cash generated from operating activities and the gain on foreign exchange changes of $255 million and $9 million, respectively, offset our investing and financing activities outflows. The outflows related to our sustaining, non-sustaining, and growth capital, as well as our gross debt repayments and shareholder return payments. Importantly, our leverage has now turned a corner, starting to decrease as we reduce our gross debt and increase our earnings simultaneously. Looking forward, we expect to continue improving our net debt and de-levering our balance sheet towards our 0.5 times leverage target. On slide 26, we talked through our debt structure. After the end of the quarter, we successfully closed the oversubscribed refinancing of our revolving credit facility on the same terms as the existing RCF and elected to upsize the facility given the strong demand to $700 million from $645 million. The facility also includes an additional accordion exercisable at our election. This has secured a long-term, flexible financing solution that can support our offshore cash position over the next five years through our next growth phase. Moving lastly to slide 27, and net earnings from continuing operations. Overall, our adjusted net earnings increased significantly to $92 million, or 30 cents per share in Q3, due to higher earnings from mine operations and lower tax expenses. I would also highlight the select number of other key items. Net earnings in the third quarter were impacted by the $112 million impairment from the write-down of expected proceeds from the disposal of Bungu and Wanyong, following the settlement agreement with Lilium. Importantly, we have now received the first $30 million payment and $10 million of the second payment, with the remaining $20 million expected during Q4. The loss on financial instruments during the quarter included an unrealized loss on gold hedges of $49 million, a realized loss on gold hedges of 46 million, and unrealized foreign exchange losses of $10 million, partially offset by an unrealized gain on marketable securities of 8 million, among other items. Current income tax expenses decreased to 68 million in Q3, largely due to a decrease in recognized withholding tax expenses as a result of the timing of local board approvals for cash upstreaming. With that, I'd like to hand over to Jaria to take you through the details of our operations.

Thank you, Guy, and hello, everyone. Like Ian, I'm here today in our regional office in Abidjan, where I have been spending a lot of my time, given its proximity to all our operations. Before I jump into our mind-by-mind detail, I wanted to touch on our safety performance. On slide 29, we have retained our industry-leading safety performance with zero last-time injuries during the quarter. We are very proud of our safety performance, and we are looking to eliminate all serious injuries and incidents through improvement of our training, frontline supervision, and operational and procedural reviews. Turning to the overall portfolio performance, we expect our four-year production to be at or around the lower end of the guidance range, with a materially stronger production in quarter four from both our projects, which are ramping up in line for a full quarter of nameplate production, as well as expecting stronger production from the Unde and Mana mines. As discussed earlier, Our all-in sustaining costs are expected to be above the top end of our guidance range. However, we expect a significant improvement in quarter four, added by higher levels of production, which will narrow the gap. For the year to date, we have produced 741,000 ounces of gold at our all-in sustaining costs of $1,256 per ounce. We have successfully increased production every quarter this year, with third quarter production of 270,000 ounces. Looking at how each operation is tracking against production guidance, we are on track at Hyundai, Lafayette, Mana, while at ET, we expect production to be above the top end of the range. We shall partially offset the lower production expected from Sabadola Masawa. On the cost side, we expect to be above the top end of the range at Sabadola-Masawa due to lower levels of production and at Hundi and Mana largely due to the lower power availability in the first half of the year. We expect production and cost improvement at each of these operations in quarter four. I will now walk through each mine starting with Sabadola-Masawa from slide 31. During the third quarter, production decreased slightly due to lower performance from the existing CIL plant, which was only partially offset by the ramp-up of the BIOX plant. Lower throughput of the CIL plant during the quarter was in part due to the five-day strike and maintenance activities. Additionally, the year-to-date performance has been lower than anticipated due to lower grade feed into the CIL plant. The 2024 mine plan prioritized depleting the Salvador pit so that it could be used in 2025 for the deposition of in-pit sellings. As mining progressed deeper in the pit, lower volumes of high-grade ore than expected were mined. So we used other high-grade ore sources to improve grade. which had a negative impact on recovery due to the semi-refractory nature. As we did during quarter two, we have been working on pre-stripping the Kierstassi deposit to introduce higher-grade non-refractory oxide ore into the milk feed in quarter four to support higher levels of production at lower cost. On the other side, the BIOX processing plant is ramped up really well. since we declared commercial production on 1st of August, and we expect quarter four to be slightly above name plate from a throughput perspective, while we're also feeding higher grades and recovering more gold as performance trends toward our life of mines expectations. Sabadola Masawa is expected to meet its production and call guidance for the year, but we expect a materially stronger performance in quarter four and stronger overall performance in 2025 compared to 2024. Moving on to slide 32. I wanted to provide an update on the progress we are making at the BIOX plant. Now that we have largely completed the ramp-up, we are focusing on delivering future enhancements. As we've mentioned in Quote 2, we've added additional telling on the flow line from the BIAX plant to the CIL plant to ensure that any transitional ore that does not float is immediately captured in the underflow. So far, we are extracting over 50% of the gold from this underflow through the CIL plant, which of course has increased overall recovery by around 15% while we were mining through the transitional ore of Massawa Central Zone. We expected to hit fresh ore at the 140 RL, but the weathering horizon was 30 meters deeper than expected at the 110 RL, resulting in additional transition ore in the feed during the ramp up. Now we are mining approximately 70% of fresh ore, and we are realizing higher recoveries, higher grades, and better flotation as a result. The next initiative we're looking at is throughput. As you may have seen with our Hyundai and ET plants, our projects have historically outperformed design and plate. And with the BIOX working well, we see scope to improve flotation through the flotation circuits by increasing the throughput feed volume into BIOX and increase overall production. Moving on to slide 33. This year, the production from Sabadola-Masawa CIL plant has been largely responsible for Sabadola's underperformance. As I've explained earlier, we need to introduce higher-grade, non-refractory ore into the CIL plant to improve the performance, and as a result, we have accelerated mining at the near Kofiri East, as well as Tiesta Sea deposit, to introduce more high-grade non-refractory oxide into the milk feed, with Kiesa starting to contribute already. Accelerating Nyaka Fury and Kiesa has left a shortfall in the 2025 mine plan that we are working on filling through the exploration. As a result, we have identified three targets, Mamasato, Sekuto, and Kulukwende. all of which are high-grade non-refractory oxide targets near the Sabadola processing plant. And this could provide feed optionality for 2025 and support an improvement in the CL output year over year. We have also had the high-grade underground resources at Kirikunda and Gluma containing M&I resources of around 500,000 ounces. at close to five gram per ton that were part of the DFS mine plan from 2028. So we are reviewing the possibility of accelerating the timeline to better define and incorporate these deposits into the mine plan. Before I move on to the rest of the assets on slide 34, I want you to provide a brief update on the solar plant constructions at Sabadola-Masawa. We have now completed the installation of over 65,000 solar panels and the transmission towers as well as the lines are in place with connection to the existing power infrastructure expected in quarter four. The solar plant is a key pillar to our decarbonization strategy and will reduce emission by over 30% as well as the cost by 20% at Sabadola Masawa. At our mine site of Hyundai on slide 33, we are pleased to have delivered improvement in production level and all in sustaining costs through the year. And we expect our quarter four to be even a bigger step up as we introduce a higher proportion of the higher grade at carry pump or into the feed. We should improve production and lower the cost. Hyundai is on track to achieve its four-year production guidance, while all in-sustaining costs are expected to be above the top end of the range, largely due to the impact we referenced earlier. Slide 34, moving to slide 34. I am pleased to report that ET is expected to be the top end of its production guidance, with all in-sustaining costs within the guidance range. Strong performance this year is the result of continued higher levels of throughput at higher grades than expected due to ore, which was sourced from the ET pit. At the same time, our exploration program has successfully defined a significantly larger mineral endowment around the ET complex, which we expect will will support high levels of production at industry-leading costs for longer than the current mine life. As we've seen on slide 36, MANA remains on track to achieve its production guidance with costs expected to be above the top end of the range for reasons we spoke about earlier, but also as a result of slower than expected underground development partly due to the increased focus on dewatering during quarter three, following higher than expected rainfall. In quarter four, we expect stronger production of manna. The development completed this year, as well as the reduced rainfall in quarter four, has improved access to more high-grid stops at the Wona underground deposit. This will be supplemented by consistent stock production from the steel underground deposit. We expect significant improvement and importantly, we're seeing potential to improve the long-term production and cost profile at MANA through incorporation of additional M&I resource that are currently outside of the reserves. Finally, Moving to our fifth and newest Mine Lafigue on flight 36, which I have just visited with Ian, as mentioned earlier. We were delighted to deliver commercial production on 1st August, 2024, and have been continuing to ramp up ever since. We achieved a nameplate capacity for several days during quarter three. And in quarter four, we expect to be a nameplate for the whole quarter. Lafayette is on track to achieve its full year 2024 production and cost guidance ramping up to a full year of production at around 200,000 ounces next year. Overall, our operations are tracking in the right direction, and we expect to deliver a materially stronger production and an all-in sustained cost performance in quarter four. and to continue improving performance year on year. Longer term, we are seeing attractive organic growth towards our long term of 1.5 million ounces portfolio objective. By the end of the decade, and we can deliver this while maintaining best in class margins, Once we have outlined our SAFO PFS later this year, we will be positioned to provide our new five-year outlook next year. I will now hand back to Ian for his closing remarks.

Thanks, Guy, and thanks, Jaria. Now, as you can see, our operations performance is progressively improving, and production is expected to be near the low end of the full-year range. with costs expected to be slightly above the top end of the guidance range, although they will remain firmly in the first cost quartile compared to our peers and stay there for the longer term. A strong Q4 performance following the successful completion of our growth phase is expected to drive even stronger free cash flow generation that will support our near-term capital allocation priorities of deleveraging the balance sheet and increasing shareholder returns given the attractive free cash flow outlook we're well positioned to deliver against our capital allocation priorities whilst positioning the business to continue growing through asset level optimization initiatives and the asafo project so that we can achieve our portfolio objectives of producing 1.5 million ounces organically at best-in-class margins by the end of the decade And with that introduction, thank you for listening. And I'll now hand you back to the operator and open up for any Q&A.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, you need to press star 11 on your telephone keypad and wait for a name to be announced. We will be prioritizing questions for covering analysts at this time. If you wish to cancel your request, please press star 11 again. Once again, if you wish to ask a question, please press star 11. Please stand by, we'll compile the Q&A queue. This will take a few moments. Now we're going to take our first question, and it comes from the line of Richard Hatch from Berenberg. Your line is open. Please ask your question.

Thanks, Ian and team. Good morning. Just a few questions. First one's for Guy. Just Guy, on working capital, from what I can see quarter on quarter you've built VAT receivables there's been a slight build of inventory payables release can you give us some clarity on what's going to go on with working capital in the fourth quarter and then the second question is I think perhaps feedback we've had today from the market is you know impairment hedging losses it just points to a slightly scrappy set of numbers, even though the underlying free cash flow is very positive. So the question is, as we go into Q4 and into 2025, should we expect to see cleaner sets of financial statements and the all-important free cash flow generation that I think that you have really talked to? And then the last question is just on MANA. Jaria, you kind of make the point that the mine is on the turn. So, you know, should we expect to see the mill run at about 2.2 million tonnes from Q4? And, you know, what kind of all-in sustaining cost should we look to see that mine get to? And if it's not, you know, getting to a decent kind of 1,200 or so level, does this mine really deserve to remain in the group? That's quite a few questions, but thanks very much.

Hi Richard, thank you. There are a few questions in there, hopefully I'll catch them all. Just if we kick off on the working capital. Yes, you're right, relatively small inflows this quarter. What we have seen is some stockpile build, particularly at ITTI, but then within the underlying working capital, we've seen quite an extension of our payables. which include a variety of things, including minority shareholders, royalties payable, and payroll-related liabilities. The VAT buildup is probably the biggest headwind that we've got at the moment and worth spending a second on. We've got the buildup which is predominantly within Burkina Faso. We still expect to be able to collect these balances in the next 12 months, but the ability for us to factor and or get cash, particularly in Burkina Faso, has been a challenge. On top of that, from a VAT perspective, you'll see a small build in Q3, which will continue into Q4, associated with Le Fige, which has got VAT, where our returns have simply not been processed yet. So an overall VAT buildup, which is going against us at this point, but we do still see capability to claw that back over the next 12 months. Sabadala has, at least within Senegal, proven to be stable and in line with our expectations where we had another $15 million back from there. Overall, when we look at working capital into Q4, I think we should keep a number of things in mind. Overall, the Expected stockpiles will provide us a release of cash in Q4. This is as we're moving through, depending on mine plans, but essentially coming down in the number of our key sites. Our metal inventories and gold receivables, which are two balances that we will be focused on reducing towards the year end. offset again by the headwind of VAT in particular in Q4. So if I stand back Q3 to Q4 from an overall working capital perspective, I would expect it to be largely flat. The one thing that I would just highlight is that in Q4, we will also see the repayments, the prepaid, which we shouldn't lose sight of. Richard, you touched on two other topics. The first is impairment. So, yes, we've got a $112 million impairment charge in the accounts for this quarter. This is relatively simple in the sense that it relates, obviously, to the Bungu Wanyong. We de-recognized and then put through an impairment to effectively bring down the balances that were expected from Lilium to the amount that we are expecting from the Burkina Faso state. And I mentioned in the slide run through the cash flow that we've seen coming in. We have 20 million outstanding on that. But that single impairment significant in the quarter. No, we don't foresee further impairments on the balance sheet. We will be doing our reviews. at Q4 with our new R&Rs to be checking that, obviously. But at this point in time, hopefully that, from an impairment perspective, is out of the way. The third element that you touched on was associated with our hedging. I think the right way to try and think this through is to split the hedges. We have some hedges associated with cap and collars, which are relatively well disclosed in the accounts. We've eliminated some of those in the quarter, and we do have some in Q4. These are capped at 2,400. So that is probably what you might have expected to have seen, arguably something that you wouldn't have expected as much as our LBMA averaging. This is a program that we implemented just to try and reduce our exposure to gold price fluctuations at the end of the month and then at the end of the quarter, because that differs from what are relatively lumpy gold sales during the same period. In essence, what we're seeking to do is ensure that the total sales, which we settle at an average spot selling price, are brought back to an LBMA average. And in the instance where the spot price is greater than the LBMA average, we record a loss. And if the spot price is below the LBMA average, we would have a gain. We've put specifically Table 13 in the MD&A, a recon just to show where we've come out. And when you look at the realized prices versus LBMA, you'll note that we were $9 below in Q3, but on a year-to-date basis, $15 above. So the program itself we still think is a good one to have in order for us to be able to try and be as close as possible to that LBMA average over the quarter and over the year. Hopefully that helped. I'll obviously take follow-ups, but maybe to Jory on the MANA question first.

Thanks, Guy. So just to refer to the MANA question, I think what we've seen, we continue to expand the underground operations at WANA with the Dunguna and Avira development that we've been doing for the past quarter, with the aim, of course, of gaining increased access to high-grid stoves during quarter four. It is expected that going forward, we will be above the 2.2 million tons annually to support the plants, as well as to drive the increased level of production for lower cost. Obviously, during quarter three, I think we've talked about the higher cost. They were really elevated, largely due to the lower gold volume sold, the higher royalties due to the increase in gold pricing. as well as the development that we had to do to ensure that we had access to the stoves at the underground. We are what we've been seeing for the past few weeks. We are very encouraged by the positive trends in mining and processing unit costs at MANA as the ramp up of the underground continue to progress, which is also supported by higher fleet availability, which was partially upset by the increased watering activities during the wet season, as I mentioned during the side-by-side explanation earlier. So we are optimistic and seeing both the increase in throughput as well as an improvement in unit cost.

Okay. That's all very comprehensive and very helpful. Thank you very much.

Thank you. Now we're going to take our next question, and it comes from Don DeMarco from National Bank Financial. Your line is open. Please ask your question.

Thank you, operator, and good morning, Ian and team. A couple questions for me. I'll give you both questions. So at LaFigue, you're expected to exceed nameplate for Q4. Does this put you at the high end of the full-year guidance range of 90 to 110? And my second question, at Sabot-Al-Masawa, By accelerating Chiesta and Nakaveri East in Q4, what are the implications on 2025 production? Thank you. I'll listen to your response.

Yes.

So, regarding La Figue, I think, as we said, we have declared commercial production on August 1st, and we're really very pleased with the ramp-up of the production at La Figue. The site is on track to deliver within the guidance that was published. And of course, as we mentioned, with all the work that is in progress, we believe that we will be in the range of the 200,000 ounces into next year as well.

Okay, thank you.

Thank you. Now we're going to take our next question. And the question comes to the line of Amos Fletcher from Barclays. Your line is open. Please ask your question.

Yeah. Hi, everybody. Good afternoon. A couple of questions from me. The first one, I guess, sort of reiterating the one Don was just asking on Saboteurla. Obviously, you're pulling forward some production from 2025 into the 2024 mine plan. What should we assume as the baseline for 2025 production at this stage? And then the second question is on the all-instaining cost guidance for 2024. Just wondering if you could be a bit more precise on what we should expect for all-instaining costs for Q4, just given the guidance is relatively loosely worded. That would be great. Thank you very much.

So I will take the questions from Sabadola Masawa, Q4. As I explained earlier, though we are taking some of the answers from 2024, we are actually filling the gap with near-mine exploration. I've mentioned the three targets that we have, Koloquende, Masato, and Sekoto. We are currently working very closely with our exploration, so we believe we expect to be able to fill those extra ounces that we're bringing in from 2025, fill them in with those exploration targets.

I think, Amos, with regard to your question on all-in sustaining costs for Q4, as you can see from Q3, a large influence of the increasing cost in Q3 was driven by the poorer operational performance. And with the stronger operational performance that we're anticipating in Q4, you know, we believe that there will be, you know, significant reduction in the Q4 all-in sustaining cost. As we said, you know, much closer to the top end of guidance that we're talking about in our release. So we're not going to be that specific as yet, but we're certainly looking for an appreciable improvement over Q3.

Okay. That's great. Thank you very much.

Thank you. Dear speakers, I believe you wanted to answer the second question for Don. We've done that, thank you. Okay, thank you. Now we're going to take our next question then.

And the question comes from Andrew Breitmanis from Stiefel Nicolaus Europe. Your line is open. Please ask your question.

Thanks, and good afternoon all. I guess my first question is on the 1.5 million as per random target that Yves talked about. When you put that type of number out there, what timeframe do you need to see the portfolio maintain that level of production to consider it a sustainable level? And I assume Asafia comprises a significant portion of that incremental growth, but where else in the portfolio do you see opportunities to reach that target?

Yeah, thanks, Andrew. Interesting question. You're right. I mean, a lot of that will be coming from Asafo. I think we said previously that Asafo is not just growth, but it is also an element of replacement. If you're looking at our existing operations, we certainly do see some potential for a modest increase And assuming that the IT donut allows us to have a more, you know, slightly higher volume, higher grades in the coming out. But there is a lot of engineering work that is required for us to prove that up. Obviously, Lafayette will be a key component of our current base. And obviously we'll be looking to recapture some of the performance that has been lost this year coming out from Sabadala. And if I look at the more recent exploration that's been taking place on the mining permits at Sabadala, you know, there is some very encouraging prospects. for getting a much better mineral inventory out of that place, which will help sustain the performance But primarily the 1.5 will come from the SAFU. We will be talking about the results of the PFS probably towards the middle of December, and then you can have a look at what we're going to be saying there. But so far, you know, based upon the preliminary review that we've seen, it's looking very promising.

That's great. Thanks. And I guess my second question is more specific to Asafu. Some of the drilling that you talked about during the quarter and encountering mineralization in the greenstone rocks, has that changed your interpretation of the district or the mineralization there?

No, not at all. In fact, if anything, it's confirmed our original suspicion that what we're seeing here is a project which is not a purely Burmese type of project, which is more typical of what we tend to mine within Endeavour. But we're starting to see, and particularly in the Asafoetidae itself, it does seem to be more in its style. And because of that, you know, you're seeing larger, thicker sequences. You're seeing the mineralization contained within sort of massive sandstones and what have you. So it actually is looking quite promising, and you can see from, the slide that we put up in the presentation, you can see how, you know, even though it's a basin, on the western side of the basin, it's more Berymian, and as you go to the eastern side of the basin, you know, it's a gradation towards more Tarquian, which is typically what you would see in Ghana, which is literally just across the border, you know, a little bit further east. Not surprising, but actually very, very promising and quite exciting in terms of decent, slightly longer life potential project, which is what we really want to look for.

Thank you very much.

Thank you. Now we're going to take our next question. And the question comes from the line of Abay Habib from Scotiabank. Your line is open. Please ask your question.

Thanks, operator. Hi, Ian and Endeavor team. Glad to hear both projects are wrapping up well and look forward to attending both sites mid-November and also meeting Jaria in person as well. A couple of questions for me. At Sabudala, I mean, there's been a lot of questions on Sabudala in terms of the CIL. I mean, with the high-grade oxide ore being mined at Chiasta, see the potential of exploration and development of oxide around Sabadala. Do you believe the majority of the risk, especially within the CIL plant, is now behind us, or do you see any additional risk going into 2025? Also, any additional plant shutdowns expected in Q4 as well, if you can comment on that.

Thank you, Habib, for the question. Obviously, what we are currently doing is to make sure that we increased all-near mine exploration to assure and guarantee that constant feed of non-refractory ore into our giant plants. I think that's very important for us. I think the challenges that we've had is the acceleration of the ore into the 2024 mine plant. That means that we had to accelerate the exploration to backfill and define as well at 2025. We have identified really some exciting non-refractory ore, the three ones that I mentioned earlier. And the beauty with those three ones are they're pretty close to the Sabadola peak as well. Can you just remind me again, what was the second part of your question, Habib?

Second part, Daria, was just on any sort of planned shutdowns expected in Q4.

So we are not expecting our plant to have any shutdown. I think some of the ones that we have in Q3, they were all addressed and they were primarily on the CIL plant. It was mainly due to some of the motor of the sack mill. Fortunately, we had exactly what we needed on site. They were addressed, so we're not expecting any, there's not unforeseen of shutdown in quarter four, other than the regular maintenance that we all do on a mine site.

Perfect. Thanks, Jerry, for the color. And just moving on to Asafo, you know, obviously Asafo seems to be, you know, growing in terms of, you know, exploration upside, looking pretty decent. You know, and it looks like it's potentially larger than Lapige and Hyundai. So how should we be looking at the size of the operation at Asafo compared to your previous builds?

Yeah, look, I mean, Obviously, SAFU, sorry, Lafayette, you know, the 4 million ton operation, The PSS has looked at a variety of options in terms of sizing, and we specifically in the PSS only looked at the resource contained within the Asafoetidae pit. We have not included anything like from Parla or any of the other satellite deposits of base. But because of that, it will be a very similar design concept to what we have at Le Figuet. Also, it's hard material, so we'll probably be going with a HPGR configuration on the comminution section. We've seen at Le Figuet that has worked well in terms of quite significant reduction in power costs and power demand. You know, as Cote d'Ivoire expands and grows, you know, demands on the grid, you know, get stronger. So anything that we can do to cut back on power is important. And HPGR provides not only power saving, but also the ability to deal with hard rock. But in terms of sizing, it's going to be a larger, likely to be a larger size than Le Figuet. But, you know, all will be revealed in December. But look at Le Figuet. You know, think of something a little bit bigger than that. And that's the sort of ballpark that we'll be operating within. And we're probably going to be looking at something which has got somewhere between sort of anywhere between a 13 to 15-year mine life based upon SAFU. uh our track record of our projects is that we we have them at nameplate and as we operate them we tend to be bottleneck we tend to increase not only the size of throughput or the capacity of throughput but also the size of the endowment that we're processing and to be honest i see no difference with the software i think it's going to follow exactly the same um the same process we certainly wouldn't want to go too big up front and have a risk. So we'll play it relatively conservatively, but with an eye to having the flexibility of growing organically once we're up and running.

Thank you, and that's great, Tyler. And just my last question, just moving on in terms of the mining codes within the countries that you operate in. With Mali going forward with their new 2023 mining code, any additional discussions that you've had with Burkina Faso, Ivory Coast, Senegal, for any proposed changes to their mining codes? And also, are these countries going to continuously consulting with Endeavor on these changes?

Yeah, I mean, look, I think the recent increase in the mining codes in Burkina Faso have been well documented. We have previously spoken how there was the, shall we call it, the initial declaration by the state that they wanted to increase the take of the state. There were representations by the Chamber of Mines in Burkina Faso to government saying that we would hope that they would honor existing conventions. And in fairness, what came out of those discussions was the fact that there's a new mining code coming in, which is, yes, it's an increase, but really it's just bringing it in line with the rest of West Africa. But more importantly, they did listen to the Chamber, and they accepted that existing conventions would be honored. And for us, the new mining code in Burkina Faso will not impact Marna Mine until 27, when that permit gets renewed, and Hyundai, the permit gets renewed in 2029. So there will be no changes, you know, certainly in the medium term on both of those operations. In Cote d'Ivoire, there has been some discussion about wanting to, again, increase the rates. We are in discussion with government and just saying to them, look, just be careful. You're now starting to push the outer edge of the envelope. It's all very well. We understand that you need taxes. But again, we invested in operations given certain criteria. Be careful that you don't bring in criteria that discourages investment. Because the gold industry in Côte d'Ivoire is actually a very healthy portion of the GDP of Côte d'Ivoire. And there's some good long-term potential. And clearly, we don't want the soft food to be unduly prejudiced by any deleterious increase. As far as Senegal is concerned, there hasn't been anything official at the moment. Governments have been focusing more on oil and gas. Would I suspect that they will come back at some stage and want to try and change things for the mining sector? I think the likelihood is that they will certainly want to try and do it. But there's been nothing specific as yet. What I would say in all three of the jurisdictions that we operate in, I think the quality and the access that our public affairs people have and I think the mutual respect in which both parties are held in means that we are a pretty good group when it comes to sort of sitting down with government privately behind the scenes and saying, look, we understand you want to do certain things, but this is not not necessarily the right way to encourage longer-term investment. It won't change what's there at the moment, but be careful that you don't prevent fresh investment coming in. We've seen down in South Africa, for instance, basically when they bought in the new mining code in 2004, 20 years later, we see what's happened. There's effectively been almost like an investment strike there. That's the last thing that I think West Africa needs. It needs this investment. It needs the tax flow. It needs the employment. I think we as business have a responsibility to sit down and have an open and honest dialogue with the authorities to make sure that we get that balance right. Perfect, Ian.

That's a great color as well. That's it for me, and thanks for taking my questions.

Thank you. Now we're going to take our next question. And it comes from Danial Major from UBS. Your line is open. Please ask your question.

Hi. Yeah, thanks very much. Yeah, a few questions. The first one, just to clarify on the impairment, I think it was $300 million that your original headline sale price for Wanyon and Bogu. Can you just remind us again how much you've received so far? You said you were going to receive 20 million in Q4. Is that all of the cash payment and just royalties left and how much, yeah, just a reconciliation of where we are now relative to 300 million announced?

Sure. Daniel, so if I just pick up kind of chronologically, we received 33 million initially from Lilium themselves. We then received a very small proportion following on from that, just over a million, and then that was it from the Lilium cash inflows. From the state, we've received 40 in total thus far, and there's a further 20 in Q4. That would bring us to the overall cash, the upfront cash consideration, and then we would still have the NSR over the 400,000 answers.

Daniel, if I can just add to that, and I think it's important to put a bit of perspective here. As Guy suggested, over $90 million in cash by the end of the year and then the royalty, you know, the 3% royalty over 400,000 ounces, I think if you sort of net present value all of that, it's going to be somewhere in the order of about $150,000. 150 and 120 million depending upon what discount rate you use. And that's for both Wanyuang and Bungu. As things stand, Bungu is basically, it's not operational, it's right in the heartland of some very sort of active terrorist activity. So the original 300 odd million was, split fairly evenly about 150 each for Wanyan and 150 odds for Bungu. Today, Bungu arguably is worth nothing. So even though we've got less than we wanted, I think it's fair to say that what we have received is probably a reasonably fair reflection of what the actual value is today. And that's just a sad fact. If we could have sold it earlier, great, but we didn't. But it's where we are.

That's helpful. Thank you. And then the next one, I'm just going to numbers again slightly on the cash flow statement, which I think I've done a few times before. But if I look at the cash tax that you've paid year to date and then kind of extrapolate it into Q4, probably gets about $350 million of cash outflow. Is that a reasonable assessment for the full year?

Daniel, I think, let me just start off. Q4, yes, we've got a residual payment on our corporate income tax. So we're expecting a fairly minimal amount, around $20 million. and then withholding taxes down to zero because we obviously pay that up front before we start doing the upstreaming. So a small proportion of cash out relating to our overall tax in Q4. I think that brings us more to $300 million, but very happy to try and reconcile offline if your numbers are very different.

Yeah, so just to be clear, it's quite hard for us to predict the variability of cash tax. Okay, so about $300 million would be a sensible number based on how you could see the scheduling of those payments. Okay. That's helpful. Thanks. And then the same on the dividends to the minorities. I think you've paid out about $116 million a year today. Is the big expectation for Q4, or is that most of where you'd expect it to be?

Daniel, if we, again, just We're working sort of roundish numbers and happy again to pick up offline if necessary. But total declared for the year, roughly 750, of which roughly 600 comes to us. So I think the number that you were quoting was probably withholding tax and minority dividends together. And those have largely...

So just to be clear, I'm just looking directly in the dividends and non-controlling interest in your cash flow statement. The year-to-date payment is $116.6 million. What should we be expecting in that number for the full year?

Thank you. Sorry, I thought you said $160. So I was trying to work out where you got that number. Yeah, $116. Sorry, yeah. So Daniel, in Q4, in terms of minorities, we're not expecting any significant amounts in terms of outflows. Okay.

And just on those two variables into next year, can you give us any steer? Because over the last couple of years, I guess they've been pretty material items in terms of sort of the bridge between the EBITDA and the cash flow. So next year, where should we be thinking that either the cash tax rate and the dividend minority would be landing in this kind of price environment?

If you don't mind, I'm going to... sort of fall back on, let me give you something when we come to guidance. So given that we're in the middle of budget season, what we do now is we take a look forward on an assumed goal price and production level and calculate what it is that we can afford in inverted commas to be able to distribute. As soon as we've got those numbers, happy to talk you through that. In next year, we will be looking to publish a forward-looking effective tax rate. We'll also split out our deferred tax to make the corporate income tax line easier to understand. and give you forecasted cash outs or cash tax paid. So we'll provide you with more numbers, but I'll have to ask you to wait until we provide guidance early next year.

Okay, thanks. And then just final one on the numbers again. You mentioned you got the reverses of the $150 million prepayment coming through in Q4. Just can you remind me where that will flow through the financial statements?

It'll be coming through our operating cash flow line.

So deduct $150 million from operating cash flow to adjust the prepayment?

Correct, Daniel. There'll also be an interest charge, so I think it's $158, but yes. Okay. Great. Thanks a lot.

Thank you. Now we're going to take our last question for today, and it comes from Felicity Robson from Bank of America. Your line is open. Please ask your question.

Good afternoon and thank you for taking my question. There have been some issues with grid power availability this year and you've seen some improvement in the quarter. Can you give us some colour on what measures are being taken to mitigate some of this volatility and how the solar plant project is progressing, please?

Your question around the grid power, so obviously, as we mentioned, we've had huge challenges with the grid availability, both in Burkina Faso and Côte d'Ivoire, during the first two quarters of the year. Just want to be clear, this is not a structural problem. There were short-term problems, and immediately what we've seen is a good reaction from both authorities in Côte d'Ivoire and Burkina, The issues have been addressed. We've seen a significant improve starting in quarter three, so much so that on some of our sites, we're nearly back to our budget plan availability. Of course, the issues that we've seen in Burkina and Cote d'Ivoire is not particular to those countries. And I believe as your population increase, the demand will increase. For sure, we've seen that few projects are already in line or coming to line in Cote d'Ivoire and in Burkina, so we do not expect such instability to continue. So, and if you will refer maybe to Cote d'Ivoire, what we've seen as soon as those issues were being addressed, we've absolutely brought in additional gensets, especially at La Figue, so that we're currently in a position to fully power our mine sites on those generators.

Excuse me, Felicity, any further questions?

Thank you. Dear speakers, there are no further questions for today. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.