No thread on EVR? Unusual for a gold producer not to have a thread, unless you gold bugs are keeping this all to yourselves!
ENDEAVOUR MINING REPORTS STRONG Q2, WITH CASH FLOW OF $47.6 MILLION FROM PRODUCTION OF 50,728 OZS OF GOLD
• Gold production totaled 50,728 ounces for the quarter and totaled 102,691 ounces for the first half, significantly above annualized previous guidance
• The full year 2012 production guidance has been updated to between 187,000 and 202,000 ounces of gold from 170,000 to 190,000 ounces. Total cash cost per ounce for production from the two mines (excluding royalties and purchased ore) has been updated to $670 to 690 from $645 to 685 previously.
• Q2 2012 total cash cost (excluding royalties and purchased ore) was $618 per gold ounce produced, which is below prior guidance.
• H1 Cash margin (revenues from gold sales less cash costs and royalties) of $84.0 million continues on plan to meet our $150 million estimate for the full year (based on a $1,600/oz gold price).
• Q2 operating cash flow from mine operations was $56.1 million, which, after adjusting for $8.5 million of cash proceeds received in early April for March production, resulted in adjusted operating cash flow of $47.6 million.
• Adjusted net earnings were $21.4 million or $0.09 per share.
• During the first half of 2012, the Corporation invested $41.3 million from its operating cash flow into its operations and exploration programs. Of this, $36.1 million was capitalized and $5.2 million was expensed as exploration. These investments in operational improvements and growth include:
ƒ Sustaining capital at Nzema: $6.0 million
ƒ Sustaining capital at Youga: $1.7 million
ƒ Development capital at Nzema $8.9 million
ƒ Near-mine exploration: $14.6 million
ƒ Agbaou exploration and development: $7.2 million
ƒ Regional exploration: $2.9 million
• At June 30, 2012, the Corporation had cash & equivalents and marketable securities of $143.9 million and continues to hold a 38.5% interest in Namibia Rare Earths Inc. (TSX:NRE) with a market value of $7.1 million. As at June 30, 2012, the Corporation had drawn $100 million of its $200 million corporate loan facility.
• During Q2 2012, the Agbaou Gold Project in Côte d’Ivoire entered the construction phase, with planned gold production of 103,000 ounces per year at a cash cost of $635 per ounce beginning in Q1 2014.
• Positive drill results from near-mine targets at Youga and Nzema continue to show good potential for mine life expansion at both operations and Endeavour plans delivery of two Preliminary Economic Assessments (PEAs) by year-end, one from each of the two mining areas. Toward that end, in Q2, the drill program at the Ouaré gold deposit in Burkina Faso was completed and an updated mineral resource estimate in preparation for a PEA has commenced.
ENDEAVOUR MINING TO ACQUIRE AVION GOLD TO BECOME A 300,000 OZ/YR GOLD PRODUCER
Summary of the transaction:
• Acquisition of Avion in an all share transaction with each Avion common share exchanged for 0.365 of an Endeavour common share valuing Avion at CDN$0.88 per share or CDN$389 million, using closing prices on the TSX as of August 7, 2012
• The acquisition will immediately increase Endeavour’s forecast gold production by approximately 50% to 282,000 - 304,000 ounces for 2012
• Endeavour is providing a US$20 million short term exchangeable loan to Avion (“Bridge Loan”) to restart the Tabakoto mill capacity upgrade, leading to further gold production growth to over 450,000 ounces per year when Agbaou reaches steady state production.
• Endeavour’s NI 43-101 compliant, attributable Proven and Probable gold reserves will increase by 31% to 2.8 million ounces and Measured and Indicated gold resources increase by 52% to 6.0 million ounces, and Inferred gold resources increase by 167% to 3.3 million ounces