Endeavour Mining plc

Good day and thank you for standing by. Welcome to Endeavour Mining second quarter and half year 2026 results webcast. At this time all participants are in listen only mode. After management's presentation there will be a question and answer session so for those who wish to ask a question please dial into the phone line. Please note that due to time constraints we will be prioritising questions from covering analysts. and we ask analysts to limit themselves to two questions before jumping back into the queue. Today's conference call is being recorded and a transcript of the call will be available on Endeavour's website tomorrow. We'd now like to hand the call over to Endeavour's Vice President of Investor Relations, Jack Garman.

Hello everyone and welcome to Endeavour's Q2 and H1 2026 results webcast. Before we start, please note our usual disclaimer. On the call today, I'm joined by Ian Cockerill, Chief Executive Officer, Guy Young, Chief Financial Officer, Djaria Traore, Executive Vice President of Operations and ESG, and Sonia Scarcelli, Executive Vice President of Exploration and Growth. Today's call will follow our usual format. Ian will first go through the highlights of the first half of the year. Guy will present the financials. Djaria will walk you through our operating results by mine. and Sonia will provide an update on our exploration program before handing back to Ian for his closing remarks. We'll then open the line up for questions. I'll now hand over to Ian.

Thank you Jack and hello to everyone joining us on the call today. Now H126 was a record half year for Endeavour. Our strong operating performance has led to record free cash flow generation and together with our healthy balance sheet were well positioned to meet our strategic objectives which prioritize organic growth and shareholder returns. Production of 564,000 ounces at an ASIC of $1,871 per ounce for H1 certainly positions us firmly on track to meet our 2026 guidance with a stronger Q4. Our operational performance drove record-free cash flow generation of $761 million That's up 19% against H2 of last year, despite the significant but expected seasonal tax payments. This cash flow generation supports our balance sheet, which sits in a healthy net cash position of $254 million and underpins our ability to grow the business organically and return capital to shareholders. On Sheldon returns, today we've announced a record $301 million of returns for H1. That's made up of another record, $230 million of dividends and an additional $71 million of buybacks. That's more than double our minimum commitment as we further strengthen our track record of paying significant supplemental returns. On organic growth, we remain on track for FID before the end of the year at the Assafru Project. At the same time, we're working towards our Sabadala-Masawa underground expansion with the first phase of development getting underway in H2 and targeting first ore by year end. And on exploration, we're working towards significant resource updates at our Vindaloo DEET and Coursera discoveries that we expect to publish later this year. In short, we have built a high quality resilient business through our disciplined approach to capital allocation that ensures we target only the highest return opportunities preserving our high margins over the longer term. Now this approach also underpins our ability to reinvest in organic growth to sustain this portfolio quality while offering exposure to sector leading shareholder returns. I'll now walk you through each of those areas in a bit more detail. Starting on slide 7, as I said, we produced 564,000 ounces in H1, which was stable when compared to the prior period, while our all-in sustaining margin increased by 37%, largely thanks to the increased gold prices half on half. Importantly, our margins have continued to increase with the gold price over the last two years. On slide 8, given this H1 performance, We remain on track to deliver both group production and all in sustaining cost within the full year guidance. H1 production of 564,000 ounces represents approximately 52% of the low end of guidance and we expect a stronger production profile later in the year as we move past the wet season and the elevated stripping activity in Q3. and then moving into Q4 when higher grades are expected at most of our mines. On costs, our H1 all-in sustaining costs were $1,871 per ounce or $1,687 per ounce when adjusted for the impact of higher gold prices above the guidance price we used, principally due to the higher royalty rates at the higher price. And that positions us comfortably in the lower half of the guidance range for H1. On capital, we've increased our sustaining capex guidance from $230 million to $280 million, driven largely by increased ore mining and capitalized waste stripping at Hyundai and Lafayette. Non-sustaining and growth capital remain on track with increased stripping activity. The start of the Sabadala Masawa underground expansion and the ramp up of early works at ASIFU expected in H2. On slide nine, you can see we've generated a record $1.6 billion of adjusted EBITDA in H1, up 41% from the prior period, a very healthy 63% EBITDA margin. That's been driven not only by a stronger gold price environment, but also a solid operational performance throughout the half. Moving to free cash flow on slide 10, we delivered another record $761 million in H1, up 19% from the prior period. And that's equivalent to $1,350 for every ounce or per ounce of free cash flow generation. And this is despite the seasonal tax payments that Guy will walk you through later in this presentation. Since we completed our last growth phase in 2024, we have certainly grown free cash flow in each period thanks to strong gold prices and our consistent operational performance. On slide 11, this strong cash flow profile has been mirrored in our balance sheet improvement, which now stands at a healthy $254 million of net cash. This gives us capital allocation flexibility to deliver sector-leading shell returns ahead of and throughout our next growth phase. And that's exactly what we've done for H1. We've returned a record $301 million to shareholders consisting of a record $230 million of dividends and $71 million in buyback. And that's double our minimum commitment and nearly 40% higher than our H225 returns and equivalent to 40% of our free cash flow generation. With H1, We've extended our track record of delivering sector-leading shoulder returns. Since 2021, we've returned just under $2 billion, which is about 85% above our minimum commitment. And this reiterates our sustained commitment to sector-leading returns through both phases of growth as well as cash harvesting. Now we're on track to return at least $1.1 billion over the 2026-2028 period and we expect to achieve this even down to a conservative gold price of $3,000 per ounce. At high gold prices obviously we're well positioned to continue supplementing this return. On slide 14 and our other key strategic objective and that is organic growth. At ASIFU, since publishing the DFS in late April, we've launched early works and are advancing on the critical path to unlock FID by year end. We've completed front end engineering and design work and long lead time item procurement for the crushers, mills, HPGR and apron feeders is now well advanced. Mining convention negotiations are on track for late Q3 and these negotiations are under the terms of the current 2014 Mining Code. The relocation action plan is progressing well following successful engagement with local community leaders with the assistance of government. Overall activities are ramping up in line with the plan and we expect to declare FID and launch construction by the year end. On slide 15, growth isn't just about green fields. There's plenty to be done at our existing assets The underground expansion at Sabadal and Sawa is targeting more than half a million ounces of high-grade ore for the CIL processing plant, and that's to drive higher production over the coming years. The first phase is starting, and that's focused on development and construction of an exploration decline, giving us a platform for more detailed, closer spaced underground drilling. De-watering, earthworks and power establishment is underway with the initial fleet expected to arrive on site in Q3. We're targeting development to reach first or by year end with the second phase of expansion expected to launch later this year, subject to approval. On slide 16, the combined Astafru and Salvador support our growth ambitions to 1.5 million ounces by 2030. but we are not growing for the sake of growth and we are focused on preserving and improving our margins through optimization at our existing mines. At MANA for example we're investing in the power network to ensure stability whilst also automating our underground operations in a in the power sense. At Lefige we recently completed crusher upgrades and feed optimizations which are already improving throughput and Reagent Consumption Rates. At INTI, we're optimizing our re-sign circuit to improve our carbon and cyanide management to improve consumables efficiency and costs. And these initiatives are focused on maximizing the value of every ounce that we produce as we grow the business. Over and above this growth, our exploration program has this year already spent $44 million, advancing our recent discoveries, Vindaloo deeps and Coursera deposits. These deposits could support further growth beyond the 1.5 million ounces and help improve our asset quality certainly well into the next decade. We expect to announce exciting resource updates later this year and Sonia is going to talk through this later on in the presentation today. Before handing over to Guy, I'd just like to touch on ESG. When we launched the first phase of our ESG strategy five years ago, We were determined to deliver tangible impact, ensuring the value we created served all of our stakeholders. That phase culminated last month with our inaugural five-year impact report. Between 2021 and 2025, we generated over $11.5 billion in economic value for our host countries. That headline figure only tells part of the story. Beyond the numbers is where our true impact lies. just to give you a few examples on health our targeted programs have successfully successfully driven a 77 percent reduction in malaria across our workforce since 2021 as well as the communities from which that workforce comes from on education we've created more than 1 800 internships helping young people develop skills to launch their careers on economic empowerment through More than 215 agricultural initiatives, we've supported more than 5,000 direct beneficiaries and their families in building sustainable livelihoods. And so as we look forward towards 2030, our conviction remains unchanged. Creating shared value that benefits all of our stakeholders is certainly key to sustaining our success. With that introduction, let me hand you over to Guy to take you through the details of financials. Guy, over to you.

Thanks Ian, and hello everyone. I'll now walk through our financial results for the second quarter. Production and unit costs were broadly stable quarter on quarter, but EBITDA and earnings were lower, primarily due to a 10% decline in realized gold prices. The seasonal impact of higher tax payments accounts for the lower cash flow as previously guided. On slide 21, in Q2 we produced 283,000 ounces in line with Q1 levels, as higher production at Iti and Hyundai was offset by lower production at MANA, Le Figue and Sabadala Masawa. All-in sustaining costs of $1,907 per ounce was a slight increase over Q1 due to low gold production and sales at Sabadala Masawa and MANA, increased sustaining capital at Hyundai related to the ramp-up of stripping activity at the Vindaloo Main Phase 3 cutback, and higher processing costs at Sabadala Masawa driven by scheduled maintenance. Despite slightly lower gold prices quarter on quarter, we still generated a healthy all-in sustaining margin of 56% or $2,441 per ounce. We are firmly on track to achieve our full year guidance. In Q3, we will see some higher stripping and lower grades, coupled with the wet season impact that will translate to increased ASIC. But we expect to see a material uplift in grades following the wet season and the completion of our stripping programs in Q4, which will strongly reverse this. On to slide 22, despite the gold price driven step down in EBITDA, our EBITDA margins remain resilient at 60%, reflecting the high quality of our operations. On slide 23, our underlying operating cash flow remained robust during the quarter, absorbing our typical seasonal cash tax payments comprising provisional income tax payments for the prior year, as well as withholding tax payments relating to the cash that we will upstream from our operating entities this year. This expected impact is compounded by the lower realized gold prices and the higher operating costs as mentioned earlier. Given our expected H2 weighted operating performance with production expected to peak in Q4 and with the majority of the year's cash taxes behind us, we are well positioned to continue generating strong cash flow in H2. Looking at the significant quarter-on-quarter operating cash flow movements in more detail on slide 24, firstly, the decline in realized gold prices reduced cash flows by $129 million, while stable quarterly operational performance translated into a marginal decrease of $17 million due to slightly higher operating expenses. Then, as mentioned earlier, income taxes paid increased by $419 million in line with the annual timing of our cash tax payments. Finally, working capital was an inflow of $52 million this quarter and an increase of $144 million compared to last quarter's outflow. This was mainly driven by an increase in supplier payables and timing of gold sales and VAT refunds in Cote d'Ivoire and Senegal. This inflow was partially offset by a build-up of consumables at Sabadala Masawa and Hyundai and a build-up of stockpiles at Hyundai, Itimana and Sabadala Masawa. Moving on to slide 25, our free cash flow of $149 million was lower during Q2, as expected due to the higher seasonal taxes, low realized gold prices, the ramp up in stripping activities, and the strategic investments in our new venture exploration partners, Altair Minerals and Kulu Gold. That said, for the first half of the year, we're pleased to have delivered another record free cash flow performance of $761 million, and looking forward we remain focused on maximizing free cash flow by maintaining our capital allocation and cost discipline. At the end of Q2 we remain in a strong net cash position of $254 million. During Q2 we generated $317 million from our operations. Investing activities of $169 million included sustaining capital of $75 million, 53 million dollars of non-sustaining capital and 9 million of growth capital in addition we invested approximately 25 million dollars through our new ventures program financing activities included a net 315 million dollar drawdown of the group's rcf offsetting dividends paid to shareholders of 200 million dollars share buybacks of 44 million dollars payment of financing fees of 22 million dollars and payments to minority shareholders and many more. This strong balance sheet position provides significant financial flexibility to continue to allocate capital towards both organic growth and our shareholder returns. Finally, on slide 27, I'll walk through some of the net earnings highlights, focusing just on the key line items. In Q2, earnings from mining operations were $613 million. We recorded a loss on financial instruments of $28 million, comprised mainly of foreign exchange losses driven by the strengthening USD on our net assets balance sheet position along with a fair value adjustment on marketable securities. Current income tax expenses increased as expected driven by significantly higher recognized withholding tax expenses following local board approvals for our cash upstreaming. Deferred tax recovery increased by $234 million compared to an expense in the prior quarter reflecting the reversal of deferred tax liabilities after local board approval and payment of withholding taxes associated with cash upstreaming in Q2. Lastly, add-back adjustments included the loss in financial instruments, other expenses of $21 million and a non-cash tax adjustment of $10 million related to foreign exchange on deferred tax amounting to $57 million in Q2. As a result, our adjusted net earnings were $392 million for the quarter, or $1.25 per share. Thank you for your attention, and I'll now hand over to Djaria to walk you through our operating performance.

Thank you, Guy, and hello, everyone. I will begin by discussing safety. Unfortunately, this quarter we've reported a fatality when one of our colleagues, Sam Dawuda, who was a team leader with one of our contractors, tragically lost his life during water drainage activities on the 29th May at our Lafayette mine. Any loss of life at our operations is unacceptable. Following the incident, we've completed a comprehensive investigation which identified several key recommendations. These are currently being implemented, particularly in relation to ways of working with and appropriately supervising contractors, reinforcing safety training, including immediate changes around contractors and boarding, but as well as mandatory refresher courses for all frontline supervisors and a supervisor capability program. To reinforce the obligations to our contractors to be 100% aligned with Endeavor Health safety and environment standards, we will also be holding an annual CEO HSE workshop. This workshop will convene the CEOs of our key contractors in practical engagement focused on HSE performance, governance, and culture across all our mining operations. Despite these tragic incidents, our trailing 12 month total recordable injury frequency rate of 0.72 remains low. But we will continue to work toward achieving a zero incident work environment. On slide 13, our first half performance has positioned us firmly on track to achieve our four-year guidance. H1 Productions was approximately 52% of the low end of the production guidance with a stronger second half expected which is driven by a particularly strong quarter fall from Hyundai, ET and Sabado Lamasawa due to higher grid in the mining sequence. While on all in sustaining costs our H1 performance position us in the lower half of the cost guidance range on a royalty adjusted basis with cost improvement expected in quarter four particularly due to the expected higher grade productions and gold sales. It's important to highlight the productivity initiatives we are driving throughout the portfolio to reaffirm our operational excellence. Our focus remains on controlling our costs with proactive business initiatives across the value chain from blast optimizations to short distance haulage. On guidance, at Lafayette, the better than expected throughput in H1 has positioned the mine to achieve productions in the top half of the guidance range with costs in the lower half. At Mana, lower grids following the completion of the CU underground deposit The deferral of the Banner Camp open pit and also the pause in mining at the Avira port of Wona underground mean we are expecting production below the low end of the range with costs above the top end. At a group level, we are firmly on track to deliver our four-year guidance. On slide 31, I'll start with Punde. We increased production during the quarter as we accelerated ore mining in the Kari West pit which has provided good grade soft oxide ore which has supported the higher levels of throughput. Costs have increased slightly as stripping activity of indolumentary accelerated. Similar to all our assets, at Hyundai we have been looking at several optimizations initiatives. We've been improving blastwood fragmentation and reducing truck Cycle Times and Holy Distance through more efficient waste dumping to increase productivity and then offset external cost pressures. Hyundai is well on track for guidance with lower grid expected in quarter three and a significant improvement in grid in quarter four following the completion of wet stripping at the vendor lumens repeat. We've increased our sustaining capital guidance as we have accelerated waste stripping at Vendor Lumaine and ore mining at Cary West. And we pre-ordered some long-leap mining equipment required for next year. Turning now to ET Mine on Flight 32. Production increased this quarter as we sourced higher grade from the Le Plaque and Bacatua pits, coupled with lower planned maintenance compared to prior quarter. which result in overall good plant performance. The higher productions and sales also supported a slight improvement in our oil sustaining cost. ET is on track to achieve its production and cost guidance. Higher grids are expected in quarter four at Le Plaque, while at Walter, mining activity are advancing into higher grid area of the pits, which is anticipated to positively impact production. MANA on slide 33. At MANA, production decreased to 29,000 ounces due to lower grid as we finished mining the steel deposits in quarter one. The lower production resulted in higher oil and sustaining costs, which were compounded by an increase in sustaining capital development in the Wona deposit. During H1, MANA has produced less than expected. due to the quicker than expected depletions of SIWU, but also the deferral of the startup of mining at the Banner Camp Open Pit to later in the year. As a result, miners' production is expected to be below the end, the low end of the guidance range with costs above the top end of the range. During H2O mining, we focused on the Werner deposit with lower tons in quarter three while hyatons and grade are expected in quarter four. Unfortunately during the month of July as a precaution we've paused mining activities in the Aviera portion of the Wuna underground mine as a fracture appeared on the surface in the depleted Wuna open pit above the Aviera deposit. But we also expect to resume mining activities in the majority of the Aviera deposits in mid-Quarter 3, subject of course to our ongoing monitoring. We will be pushing productions while we also explore opportunities to get as close as possible to the guided range. Given the strong performance from the rest of the portfolio, we do not see any impact on group-level guidance, with Lafayette expected to more than compensate any shortfall at MANA. one of the many benefits of operating such a high quality portfolio. Moving to Sabadolla on slide 34. The productions at Sabadolla Masawa decreased due to lower throughputs in the CIL but also lower recovery rates at both plants. The throughput was lower due to maintenance in the plants. The recoveries through the CIL were impacted by semi-refractory ore from the Delia main but also the Nyaka Ferry East Beach. While the bias recoveries were lower due to maintenance activities planned. The oil and sustaining costs increased as we invested in additional mining fleets and increased our waste stripping at the Delia but also Massawa Central Zone Picks. Looking forward, we expect a stronger second half of the year, particularly in quarter four when higher grades from the Nyake Ferry West but also Dahlia South Pit will increase productions in the CIO plants while the throughput is expected to continue improving through the biox plant. But as Ian mentioned earlier, we are also starting the first phase of the development of the high-grade Goloma underground deposit with a target to hit first fall towards the end of this year. This underground expansion is an important stepping stone towards higher levels of production at Sabadella-Massawa, bringing in significantly higher grades into the CIL processing plants. At La Figue on slide 35, in quarter two production, quarter two production decreased slightly as we mined and processed lower grades from the main pit. The all-in sustaining cost has improved as the sustaining waste stripping activity was largely completed during the quarter. We've had a very strong first half of the year at Lafayette, producing nearly 60% of the guidance midpoint already. Thanks to the throughput in H1, outperforming design implates by nearly 10% consistently. Latige is on track to achieve the top half of its production guidance with costs in the lower half of the range. Unlike the rest of the portfolio, the performance of Latige is expected to be weighted toward H1 with slightly lower grades and slightly lower throughput expected in H2 due to lower grades from the main pits and the wet season impacts in quarter three respectively. Thank you everyone and I will now hand to Sonia to walk you through the exploration highlights.

Thank you Djaria and hello everyone. I wanted to briefly provide an update on exploration at three of our exciting projects. At our home the mine we have discovered an extension to our Vindaloo main deposit called Vindaloo Dips. Windaloo Dips is located immediately adjacent to the processing plant and can be accessed with limited development from the bottom of the Windaloo main pit. The resource is expected to be a large high-grade underground resource and we have already completed the drilling program with a maiden resource as expected later in H2. Given the size, grade, and proximity to the plant, it could offer significant production and life of mine upside in the near term etunde. And importantly, this is not included in our 1.5 million gross outlook. We have also stepped out from the Vindaloo Deep deposit toward the south and identified another deposit called Vindaloo Deep Southeast, which appears to be a fault of fat continuation of Vindaloo Deep. We're currently drilling Vindaloo Deep South-East and expect to define maiden resource there next year. It's Sabodala Massawa. Our exploration program is advancing the Calzada discovery very quickly. We currently have seven drill rigs working on defining updated MNI resources by year end. Causara is a target that is located approximately 35 kilometers south of the Sabodala Massawa processing plant. It has a 10 kilometer long mineralized trend that we are drilling in phases starting with the Causara main in the north. We believe Causara is non-refractory and should be amenable for processing through our Sabodala CIL plant potentially supporting higher production for longer at Sabodala Massawa. On slide 39, at Asafo, we already have five million ounces of high-grade resources defined, supporting a 16-year mine life. We have already defined 0.2 million ounces at the Palatrand tree deposit located one kilometer west of Asafo. and we have stepped out again to the Pala Trend 2 target located only four kilometers west of Assafo. Mineralization at Pala 2 is hosted in the Berymian Rocks and the Tarquayan Sands. So we are targeting both type of mineralization and hope to add incremental resources into the overall endowment at Assafo next year. Thank you everyone. I will hand back to Ian for his closing remarks.

Thanks very much Sonia. Before we open up for Q&A, I just wanted to briefly reiterate our approach to value creation. Here at Endeavor, we view exploration and project development as two of our most important value creation levers. We have consistently discovered more than we have produced, and we have done this at a sector-leading discovery cost, adding top-tier projects like ASIFU into our pipeline. we have a strong track record in building these projects efficiently and on budget successfully expanding the portfolio organically and we have built a high quality cash generated portfolio that has a lot of opportunity for further expansion and optimization within it and it's this cash flow generation coupled with our healthy balance sheet that puts us in a strong position to continue delivering not only sector-leading shelter returns but also sector-leading Organic Growth. And with that let me hand over to the operator and we'll start taking Q&A. Thank you.

Thank you. To ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced and to withdraw your question please press star 1 and 1 again. Please stand by while we compile the Q&A roster.

Thank you.

We will now take our first question. This is from the line of Ovez Habib from Scotiabank. Please go ahead.

Thanks operator. Hi Ian and the Endeavour team. Congrats on a good quarter and a good beat to our estimates. So looking good in Q2. A couple of questions from me. Number one, starting off at Sabudala, looks like you're moving in the right direction with new oxide discoveries at Kawasara. You're looking at going underground at Goluma and Curraconda. Ian, internally, is there a target in mind as to what this operation can do once you bring all these targets in? Can we expect to get back to that 375 to 400,000 ounce level at this operation?

Look, I think The honest answer to that question is that is not impossible but the question is what would be a higher yet sustainable level of production and personally I would feel much more comfortable that when all these things come to fruition You know somewhere in the mid 300s as a more sustainable level of production I think for modeling purposes and for aspiration purposes I think that's more appropriate clearly if we can beat that we will do but you know let's let's build up from where we are now and but importantly get ourselves into a steady state condition and move away from this boom and bust which is you know sadly characterized as Sabadala and let's get into a more steady state consistent predictable level of performance that would be my preference

I think that would be the preference of the market as well. So I think that's a right way to think about it. So thanks for that. Next question I may say would be for Sonia. You know, it looks like, Sonia, you're very excited on the potential of Winderodeep's Kavasara as well. I mean, you've got seven rail rigs at Kavasara and looks like, you know, that could kind of move towards, you know, coming into the production profile at Sabadala. and that's become a focus very quickly. Are there any other targets we should be keeping an eye on around ETI or Lafigue or any of those other assets that could kind of move the needle?

Thanks a lot, Issa, for the question. Look, in Sabo Dalla Massawa, we are talking a length of Causara, but I assure you it's not the only target. We actually have identified A complete new look at the entire area, multiple targets. We leveraged our understanding of the mineral system, applied AI tools, and we have identified over 23 targets. So there will be plenty more to be on the Causara. Now, in the other region, EIT, we're really excited from the results that we have been having what we call the EIT Eastern Board. This is located south-east of our current operation. If you think where La Plaque Open Pit is, it's continuing to La Plaque, from La Plaque to the south on a 10-kilometer corridor where we have identified a continuous structural setting that is mineralized north south and up and down we have tested in the past that these 10 pieces but now we are connecting all that the portion together this is definitely a big excitement for ET and we will be busy between this year and next year to upgrade the resources in the area and more to come toward the end of the year In Lafigue, we're actually progressing inferred resources around the Lafigue May Pit that will be moved into indicated by the end of this year, as well as two more targets, Target 1 and Target 11, where we initially drilled a couple of extensions in the beginning of the year and we are now putting together the next drilling campaign that we will start in the next couple of months following the rain reason so Lafigue as well more to come within the similar trend of the main Lafigue ore body then from that ASA4 is proving to to be a very exciting area Of course everybody knows about Asafo but what we're starting to see is a set of other prospects both in the Tarquian sand similar to Asafo system but also in the Biremian especially on what we call the Pala trend too. Now we just started with a couple of diamond drilling holes to prove the concept and the existing of the mineralization and we had very great results and now we are planning for the next phase of the drilling campaign that we will start this year and will continue in the next year. and then of course we also stepped into new jurisdiction and in NECA Saxon we're a little bit more down the line and long term but we just have a position ourselves on over 720 square kilometer of permit so our joint venture partner is just put in application for several permits we completed a first reconnaissance field work and we are continuing with sampling so that's something as I said it's long term but it's moving in the right direction and then in Guyana with the placement with the Altair investment we're starting now to put our booth on the ground and starting to see the potential in the area as well so there is definitely different activities that are happening beyond the Kawsara and Windaloo Deep South extension.

Okay so that's a lot in terms of exploration excitement there so thank you so much for all the color. I think I've hit my two question limit so I'll get back in the queue but thanks for taking my questions.

Thank you. We will now take the next question. This is from Alan Gabriel from Morgan Stanley. Please go ahead.

Yes, hi, and thank you for taking my question. A couple of questions from my side. Firstly, on the Kawsara, I would like to follow up. Is the prospect covered and governed by the same mining permit at Sabodala Masawa or will you need to kick off a new permitting process should this prospect be pursued further? That's my first question. I'll save the second for later. Thanks.

Thank you very much. Actually, the prospect sits into the Exploration Permit as we are progressing our drilling campaign to move it to indicated resources. We are also working in parallel to complete the environmental work that is required to move the portion into the Exploration Permit and it will feed into The current mining permit for Sabodala Massawa. So that is really the trend. Now the timeline, we're looking at two to three years between completing the environmental work and all the necessary piece of work to move this into the into the mine permit.

Thank you, that's very clear. And another question, I guess this one is for Guy. Guy, a lot has happened to supply chain since you've guided for the SFO CapEx and you have probably done quite a bit of procurement during the first half of this year at the time of big supply chain dislocations. How confident are you in the initial budget that you have provided for SFO?

Hi, Alain. Thank you. So as Ian mentioned, we have started procuring some of the longer lead items. so far for the tenders that have come in and the orders being placed they are completely in line with the costing that we have in the original budget so that is not not an area that we're seeing any potential inflationary or overrun potential at this stage thank you thank you very much

Thank you. We'll now move to our next question. This is from Amos Fletcher from Barclays. Please go ahead.

Yeah. Hi there, everyone. Excuse me. A couple of questions. First one to Guy just on working capital. Congrats on releasing a decent amount in Q2. I was just wondering if you can give us a steer on where you expect things to shake out during the second half in terms of, you know, where we could see some more releases coming through. Thanks.

certainly so apologies up front for what might be a slightly detailed and protracted answer but our Q2 inflow agreed very welcome the key driver of that though was an extension to our trade payables and this is more a question of timing than than anything fundamental or structural that we can necessarily expect to see in coming quarters we did see some receivable inflows now that that's Partially down to some gold receipts and timing thereof. Again, nothing structural, but some good news as we've seen on the VAT. So in Senegal and Cote d'Ivoire, we've managed to tighten the turnaround time between submission and receipts of VAT reimbursements. We're certainly looking to hold that line and potentially improve it slightly into the second half. The question really then becomes Burkina VAT. And whilst we have seen some very welcome reimbursements, cash direct cash reimbursements from the state, I don't think we should be counting on any further reimbursements to be able to completely offset the accruals we're making. So I think inevitably we're going to see some extension or increase in Burkina Faso VAT overall balances into the second half. A big swing factor is stockpiles. I think we've spoken already quite a bit about some of the stripping that we've got planned, particularly in Q3, but then also some residual in Q4. When we are doing our stripping, particularly at Le Figuet, we tend to draw down on our stockpiles. There will be, therefore, some incremental drawdowns going into the second half of those stockpiles. But as we see the Q4 production ramp up, there probably will, counteracting that, be some increase in stockpiles, particularly at Hyundai and Sabadala. So I think overall stockpile broadly slightly up in the second half, where I think we've unlikely seen that much material movement is in consumables. We built our consumables in H1, particularly at Sabadala and Hyundai. but that was effectively for planning in and around our maintenance programs and catering for some logistics difficulties that we were facing in Burkina. I would expect the consumables therefore at a group level to be relatively flat. So the short summary of that protracted answer is I think the Q2 inflow whilst welcome is not necessarily going to be repeated in Q3 and Q4 but I do think that our working capital outflows for H2 are going to be relatively well managed and should be a smaller swing than we've seen in historical quarters.

Okay that's great and then can I ask a follow-up question just on I just wanted to ask how the negotiations on the Mining Convention are going. Have there been any material changes as a result of those negotiations since we last discussed this at Q2?

Yeah, Amos, look, the negotiations on the Mining Convention are going extremely well. We've indicated to government that a mining convention that you know very closely mirrors that which we already have at Lafayette would work for us. There will be one or two minor things that we might want to discuss further but we wouldn't want to delay the signing of that mining convention. What I can say is that the Minister of Mines has given us the undertaking that the convention will be signed under the 2014 Mining Convention. So it will be a 10% free carry by the state. So the concerns that maybe it will be a 15% free carry don't appear to be valid. And we are looking, we said that we want to get this done within Q3. That is by mutual agreement. If we can do it a little bit quicker than that, clearly we will. And it will obviously be a key factor in us moving rapidly to FID. But as things stand at the moment, I'm not seeing anything that we can't live with. Minor tweaks here and there, but they will be subject to ongoing negotiations. and what would those be? Really more a question of making sure that allowances and agreements are valid not only for external suppliers but also for local suppliers so there is a consistency in application of this Mining Convention to all people. nothing at the moment that's stopping us from from moving ahead and we've seen a final sort of draft and you know we're relatively comfortable with it okay great thank you thank you next question today is from Richard Hatch from Berenberg please go ahead and thanks very much and

Thanks Ian and team and thanks for the call. Two questions. The first one is just on Manor. I mean I appreciate your kind of discussions and colour around like what's going on with the asset but I mean how should we think about this mine sort of into the medium to longer term because I guess we've been talking about it for a good couple of years about how it's been operationally challenging and it doesn't seem to be improving so what is your medium term sketch for this thing in terms of volume and cost and then the second question is just around capital return so lovely additional dividend today I guess if we move into Q3, Q4 you're going to throw off a bit more cash with less tax being paid so How should we think about that dividend come Q4? Should it be higher than this one on the assumption that the gold price remains flat in the second half?

Thanks. Richard, I'll talk to Mana and Guy will talk to the capital returns. I think the most important thing to think of when it comes to Mana is it's only been fairly recently that we've We've effectively completed the move to a complete underground operation and not a mixture of underground and some surface material. We've also done a lot of work on optimizing those costs that we are capable of controlling, looking at productivity improvements and what have you. We've now moved from multiple underground contractors to one and that has been very successful in helping us avoid sort of underground conflicts you know logistical conflicts and what have you and certainly helped us improve the the short-term issues that we've got there at the moment you know are what they are they're short-term I mean these things happen in mines if one looks at the costs of clearly costs are driven as much by your ability to produce the ounces divided by your costs and you know one of the there are two key factors driving higher costs on that or three factors high cost one slightly lower production this quarter secondly we've had to do a lot more self-generation of power because the state have been unable to supply us and many others. So those I think are key issues. And obviously the other one, the other key factor influencing the cost there is the big step up in royalties that we've seen in Burkina Faso. Not helping us. So when one looks at the controllable costs, those that we can control, actually the guy's not doing too bad a job. It's the non-controllable administered costs that are starting to weigh down on the operation on the sort of the longer term you know mana being an underground mine it looks like it's got a short reserve life but actually it's got a fairly large resource and you know it constantly rolls over and replenishes itself you know we do need to drill that out what we're seeing we've done some deeper drilling we do see that at deeper levels you know the extension of the existing all bodies similar grades It is simply a question of us getting into it. There's no doubt that it's higher cost than we like but I said previously that there is a utility value to mana in terms of how it helps us enhance our underground mining skills and that's going to be helpful when it comes to places like Sabadal at Buruma and then ultimately even a little bit further south to mana at the Hyundai mine. but you know we're not asset huggers we have built a high quality portfolio through portfolio management this is part of a broader portfolio we do believe it has potential and importantly at these prices it still makes money it still throws off cash so you know bluntly unless we could realize more value through our divestment we're going to continue to operate it mine it for cash and use that for reinvestment Thank you very much.

We maintain that at $3,000 gold and below 0.5 times leverage, we've got our minimum commitment of a billion. The first half of this year, we had a realized gold price of above 4,500. And we had clearly stated at the time of the release of the policy, at that kind of level, we would be doubling our shareholder returns, which we've importantly done. So I think the kind of message is, We do what we say, but what we said isn't going to change. And therefore, at current gold prices of whatever, 4,100, then we would still look to supplement significantly in both dividends and share buyback, but probably not to the extent of doubling, which we would have at around 4,500. So while it's not necessarily a straight line, I think that indicatively is what one can expect in the second half.

Thanks, Guy. Thanks, Ian. Cheers.

Thank you. And the next question today is from the line of Alex Bedwani-Steefel. Please go ahead.

Hey, everyone. Just a simple question following on from the MANA discussion. Can you just elaborate a little bit about the fracture that was identified at the surface? What caused it and what turned up through the monitoring? Should we be concerned at all through the rest of the year? about disrupting any other areas that might be active.

Thank you Alex for the question. What we've noticed is indeed a small fracture at the surface which obviously we've been monitoring. So definitely the production is expected to be impacted by that event and temporarily what we've decided is really to post mining activities and purely as a precautionary measure, the affected area remains under close monitoring with a partial re-entry expected shortly. We will not re-enter that area until we have a full validation from our geotech. So are we seeing an impact? Yes. But what we are currently doing as well is to really push on productivity initiatives. The expected impact that we will be seeing will be completely offset by the other asset, mainly Lafayette. We are also, as I mentioned earlier in my section, we've delayed the banner camp, which is the open pit from quarter one to now quarter four. So that definitely will bring in additional higher grade and additional ounces that we expected as well. but on top of that as I mentioned we are doing some productivity initiatives and the major one that we've been focusing on with the with the team is really how to reduce our re-entry time and where we are we're seeing year to date MANA has actually increased their mind tones productivity by almost 19 percent so going to H2 I'm expecting the team to continue with the productivity initiative and also try to accelerate the startup of MANA camp and I came by the quarter four.

Thanks, Djaria. Just a follow-up to that. So based on the commentary, it's not over active ore zones, right? So the zones that the fracture was identified, when were they planned to come into the mine plan?

So that area, we still currently maintain it closed. It does not affect the entire Avira, it's only the northern part, the southern, the central are still active, then Guna and Wuna are still active so we are really talking a very very limited area of the Avira underground.

Okay thank you, appreciate it Djaria.

Thank you. We'll now take the next question. This is from Anita Soni from CIBC. Please go ahead.

Hi, I think all the MANA questions have been asked, which was my concern as well, so thanks for that discussion. Secondly, I guess I wanted to ask on Sabadolla Masala, just moving into the back half of the year, what kind of, I guess, rebounding grades and recovery rates are you expecting right now? It looks like it's lagging a little and needs a little bit of an uptick to achieve the guidance. So do you provide some color on that and apologies if you've already addressed that.

Thank you, Adita. So what we're expecting at Sabadola for quarter three, the production will be fairly stable. We expect as well a small decline in grid, especially for the CIL plants. but it will be offset by the expected better grid from Massawa North zone stockpile that we plan to start feeding towards the end of this quarter. But when you look at the entire H2, we're expecting a much stronger H2 with much better grid, especially from Niyaka Prairie West as well as the Delia South Peat to feed into the CIL plants. which again will increase the production. We also expected a much better recovery in both the plants and definitely your throughput as well. I think in previous discussions you did ask about throughput. We are seeing a consistent minimum of 10% above the NEM plate. We're also trying to raise that 15% which we discussed. We're not there yet. I think what was important for me is that we consistently reached that 10% and that's where we currently have. When you look at the recovery, I think it's improving. We've reached about 84% in the month of June, and that is the type of level of recovery that I want to see consistently in the SDP. It's not yet there. We still range between 78, 80, 81%, but I know that at peak we have been reaching 84% as well. So continue working with the team to ensure that that 84% or so remains consistent.

Okay. In order to achieve those higher grades, I'm sorry, I did not hear which pit that you were talking about. Is there stripping involved? I'm just trying to understand what you have to get through by the end of this quarter in order to be able to access those things. What are the key deliverables, roadblocks?

I think what I said is that for quarter three, the production will remain stable. I'm expecting a small decline in grade especially from near Kateri East which is for the CIL plant. The grade at Massawa Central is more or less stable. We won't start feeding the Massawa North Zone stockpile which is transition because we still need to feed it. So we expect from that stockpile of much higher grade that what we have at Massawa Central but again is the stockpile. The remainder of the quarter four we will be feeding the CIL plants from Niaka Ferry West as well as the Delia which both of them bring in a much higher grade through the CIL plants that we're currently seeing.

I think I think you need to just give a bit more color on this. There's not Anything specifically there has to be a big stripping campaign. This is the continuous process that we're working through. As we naturally migrate into better quality material, that will give us the better grades that Djaria has been referring to. There's not a major campaign that we have to prepare ourselves for like we're seeing perhaps say at Hyundai where big stripping at Hyundai in Q3 that will definitely open up higher grade material from mining in Q4. It's not as heavy as that. Thank you.

Thank you. We'll now take the next question. This is from Marina Calero from RBC Capital Markets. Please go ahead.

Good afternoon. Thanks for the call. Most of the key questions related to the quarter have been asked. So just have a couple of higher high level questions. The first one is on West Africa. We have seen the regional security picture deteriorated in recent months. Are you experiencing any disruptions or increased lead times on fuel or consumable deliveries to your sites, particularly in Burkina?

Marina, I would perhaps question your comment about the deterioration in the security situation. In the areas that we operate in, I think it's fair to say we're not seeing a deterioration in the security situation. It's actually been, specifically with respect to Burkina Faso, because my sense is that's where your question is focused. Burkina Faso has been actually, I would say, quite stable over the past six to nine months. Certainly, government seems to be much more in control of the area and the situation on the ground is actually quite stable. With regards to supplies and what have you, at the beginning of this year, the government insisted on bringing in a national logistics company, which meant that our existing logistics teams or contractors that we use were sort of pushed to one side in favor of this effectively state-owned enterprise. And that certainly did impact Supplies of things like explosives and what have you. Not so much fuel funnily enough, but that was really a question of inter-government departmental permitting that should have taken place between the new logistics provider and the providers of permits for that provider to actually bring our stuff to mines. that initial sort of administrative should we call it confusion has died down and we're now seeing better performance it's still not in my view ideal I would still prefer that we could run things you know with our own contractors but you know that's the rules of the game that's what we have to work with but it has certainly improved from the very beginning of the year and your genuine February was really tough but it seems to settle down and it's got more into the rhythm and we are in terms of material on site that we require consumables you know we're in much better shape than we were at the beginning of H1.

That's great to hear. My second question is more on M&A. At your recent exploration day, you clearly defined the geological areas where you see the best opportunities. Some of your peers might be divesting assets in other African countries such as Tanzania, DRC, Zambia. Do you see yourself operating in these countries if the asset meets your quality standards?

Look, I mean, we've identified, as you quite rightly say, we've identified where we would prefer to operate. Obviously, as or when things come along, you always look at them. But whether you actually go ahead and do anything, honestly, I couldn't give you a general answer to such a broad question because Every single opportunity you look at on a case-by-case basis. But our main focus is continuing where we are as well as the other areas that we have identified. But if there's a compelling opportunity that we believe we have the ability to genuinely add value and it's cost-effective and it meets our return criteria. Obviously we will look at it but there's nothing in the pipeline that we're actively involved with at the moment.

That's very clear. Thank you.

Thank you. We'll now take the next question. This is from Mohamed Sidibe from National Bank of Canada. Please go ahead.

Thank you, Ian and Tim, for taking my questions and congrats on this strong quarter. So I think most of my questions were answered and specifically around, I guess, your capital allocation priorities around the capital return and I guess any sort of inorganic growth priorities. I think you have a very cash balancer, but maybe on the good cost performance in the quarter. I think, could you provide us maybe with a high level commentary around inflationary pressures you're seeing? at your operations um you know of course your your delivery on the operating front is definitely helping manage that but what else have you been doing to kind of mitigate the cost and specific as yet let's see a pretty good unit cost performance on the process cost um so yeah any color on inflation that you're seeing at the assets and how you've been able to offset it would be great thank you sure thanks thanks um um i think just briefly on the kind of

We did see a slight uptick in our ASIC in Q2, primarily driven by mining volumes. That was both at MANA and at Sabadala. The MANA increase in tonnage was, however, at a lower grade as we depleted SEER, which Djaria touched on earlier, as well as some development at WOANA. Sabadala was An increase in tonnage again associated with waste for Delia and in Massawa central zone again which Jara has touched on with some maintenance both equipment and processing plant maintenance at Sabadala. Those items gave rise to that small increase in Q2. When we look forward into the rest of H2 there are elements on cost So we are going to see another increase, albeit relatively marginal, in our mining costs. And that is fundamentally again driven by volume and our waste stripping, which I think we've spoken on quite a bit on the call already. When it comes to inflationary elements, and here we're looking predominantly at fuel and explosives, We are not seeing anything at this stage that would make us change what we've already said in terms of broad guidelines. And that is that we've got around a dollar increase in ASIC for every dollar increase in oil. So the guidance itself remains as previously mentioned. but from our perspective at this point that's not going to be and shouldn't be regarded as a significant inflationary pressure into the second half. All of those are being offset by a variety of productivity measures which Djaria did go through on a site by site basis. I think the key thing just to remind everyone on the cost Subject is the likely impact that the production profile is going to have on our costs. So I don't think you should be looking into H2 with very significant inflationary measures on the cost line. It's more a question of understanding the production profile, which being lower in Q3 is inevitably going to see a spike in ASEC in Q3 but then as I referenced in my section we expect that to fully reverse with the higher production in Q4. Thanks for that Colin.

Thank you. We'll now take the next question. This is from Daniel Major from UBS, please go ahead.

Hi, thanks for the questions. So the first one's maybe revisiting Some of the commentary on the capital returns, etc. So if I look at, you know, you're exceeding your minimum commitment, but even at $4,000, the free cash flow would by far exceed your sort of capital return. So if we look at consensus, there's something like a $3 billion net cash position at the end of next year. What do we need to see to You know, factor in that you don't need any more cash and you're going to pay 100% commitment to the market of all of that cash out. That's the first sort of part. What is the level of cash on the balance sheet gives you all the optionality you need? And then the second point just on the M&A front, any comment on the Barrick reports earlier in the quarter?

Hey Dan, I'll probably take the first piece and then I imagine Ian will take a second. So just in terms of the overall shareholder returns piece, it's difficult to say anything other than to reiterate, but if the concern is more in and around building cash balances on the balance sheet, no, that's not our intention. We've stated it before and I'll state it again. Your question on what is it going to take for us to fundamentally shift in terms of that supplemental? My answer for that is just to have the cash on the balance sheet. So the things that we're obviously looking forward and trying to predict and just make sure that we have in hand is our organic growth pipeline. So we've got 50 to 100 million coming through this year on growth capex. We want to make sure that we are going to be able to fully fund ASFU off our balance sheet. In order to do that and look forward a couple of years, we are having to take a decision today based on today's spots and today's cash balance as to what we feel comfortable in being able to distribute. So within our overall framework of capital allocation and the billion to potential doubling that depending on gold price, we stand by that. If there is excess cash at any point that doesn't Thank you very much.

I guess you've got to factor in your own gold price and we're trying to factor in your capex assumptions, but if you were on our side, would you be putting in 100% free cash flow distributions in 2027, 2028 to prevent Endeavor building a growing cash position?

Okay, nice pointed question. Thanks, Dan. So Guy Young personally speaking here, if I were in your shoes, no, I would have thought that that's would be excessive to look at 100% free cash flow distribution. So if you look at our H1, I think we're at about 41%. Free cash flow distribution somewhere in that kind of region until such time as we've got a cash balance that then cannot be used by an organic growth pipeline. So the closer we get to asset food completion and we're still building cash, then I would expect us to move up in terms of percentage free cash flow. But until that started and we're through some of that project, I think it would be rash for us to be distributing 100%.

Okay, so you continue to build cash on the balance sheet until you finish the asset fee. That's the right message.

I think at least until we've got a high degree of certainty with regards to the total build, yes.

Okay, that's great, thanks. Sorry, yeah, maybe the question.

Yeah, look, Daniel, I have to say when I saw that comment, you know, bluntly I was quite surprised. I'm not sure where it came from. and as you know, we really don't sort of comment on market speculation and that's why we were silent. What I would say is if you're looking at M&A from a growth and a value creation perspective, our approach to that is absolutely unchanged. We have said all along that our growth is going to be more Guenole Pichovin You've heard today from Sonia some very significant opportunities in terms of our brownfields, opportunities that can feed into the pipeline. We've consistently produced more ounces than we've depleted and that really will be where our focus is. We're comfortable with where we are at the moment. We can operate in these areas and going forward you know certainly it would make a lot of sense for us to go and and look at perhaps what will be a perception of lower risk areas if we were to do any M&A so we're selling we're moving out of assets in Mali so it hardly makes sense for us to think about going back into a place like Mali. So let me leave it at that.

Great. That's useful color. Thank you.

Thank you. And we'll now take the next question. This is from Felicity Robson, Bank of America. Please go ahead. Hi.

Thank you for taking my question. Just one on Lafayette, which is performing well and exceeding nameplate design. Is there any further operational upside we can expect from the asset in the short term?

Thank you Felicita, I'll take that one. Yes, I think we've been very pleased about the performance of Plastiget and really thanks to the team on the ground I think there's few initiatives who were in place especially in and around the plant and that's really what has led to now this really good result. I think going forward we have also pushing through some of the other productivity initiatives one of them is really around reagent usage as well as how can we what can we do to really reduce our operating costs one of the initiatives that we have is really how can we increase the recycled water and also the reagent dosage and we're testing some alternative flocculants and what we've seen as a result so far is that we've seen a reduction in our consumption by about 30%. So those are the sorts and the type of initiatives that we want to really bring around while we continuously again upgrading in and around the plant. That 10% above the nameplate that I mentioned to you earlier is really a result again of upgrades that have been done, initiatives on the ground and that's really what we want to continue pushing. Latige is not different for many of our sites we push our plant we make sure that each one of them sweats we look at opportunities we want to be able to mine best margin ounces and make sure that when we fill them and we process them we get the best recovery every ounce count every percentage point on recovery count so with the team that's what we're focusing on really make sure that we stabilize We've seen that 10% and how far can we take it?

Okay, thank you.

Thank you. And there are no further questions. We'd like to thank you for joining the Endeavour Mining Q2 and half year webcast.