Endeavour Mining — Ready to finish strong

Endeavour Mining (LSE: EDV)

Last close As at 18/05/2024

1,415.00

3.00 (0.21%)

Market capitalisation

3,465m

More on this equity

Research: Metals & Mining

Endeavour Mining — Ready to finish strong

In the wake of Endeavour’s Q323 results we have updated our FY23 estimates. Endeavour remains on track to achieve its production guidance of 1,060–1,135koz at an AISC of US$895–950/oz (792koz produced year-to-date at an AISC of US$974/oz). Endeavour has reaffirmed its performance is still set to be weighted towards H223 as previously guided, with Q323 recording the strongest performance this year (production of 280.8koz) and Q423 on track to beat this (estimated at 324.4koz). Q323 results were driven by impressive production at Houndé, reporting 109koz (cf estimates of 84koz). Following the overperformance at Houndé, Q423 is set to be driven by increasing production at its other assets, namely Sabodala-Massawa and Mana.

Tom Batho

Written by

Tom Batho

Analyst

Endeavour-Mining_resized

Metals & Mining

Endeavour Mining

Ready to finish strong

Q323 results

Metals and mining

20 November 2023

Price

1,648p

Market cap

£4,017m

C$1.3805/US$, US$1.223/£

Net debt (US$m) at end-September 2023, excludes lease liabilities, option premium and restricted cash

472

Shares in issue

246.1m

Free float

81.32%

Code

EDV

Primary exchange

LSE

Secondary exchanges

TSX, US OTC

Share price performance

%

1m

3m

12m

Abs

2.3

6.9

3.8

Rel (local)

4.1

6.5

3.8

52-week high/low

2,184p

1,498p

Business description

Following its acquisitions of SEMAFO and Teranga, Endeavour Mining has become one of the top 10 major gold producers globally, with four mines in Côte d’Ivoire, Burkina Faso and Senegal plus a portfolio of development projects, all in the West African Birimian greenstone belt.

Next events

Tanda-Iguela resource update

Q423

Sabodala-Massawa expansion first production

Q224

Lafigué first production

Q324

Analysts

Thomas Batho

+44 (0)20 3077 5700

Lord Ashbourne

+44 (0)20 3077 5700

Endeavour Mining is a research client of Edison Investment Research Limited

In the wake of Endeavour’s Q323 results we have updated our FY23 estimates. Endeavour remains on track to achieve its production guidance of 1,060–1,135koz at an AISC of US$895–950/oz (792koz produced year-to-date at an AISC of US$974/oz). Endeavour has reaffirmed its performance is still set to be weighted towards H223 as previously guided, with Q323 recording the strongest performance this year (production of 280.8koz) and Q423 on track to beat this (estimated at 324.4koz). Q323 results were driven by impressive production at Houndé, reporting 109koz (cf estimates of 84koz). Following the overperformance at Houndé, Q423 is set to be driven by increasing production at its other assets, namely Sabodala-Massawa and Mana.

Year end

Revenue (US$m)

EBITDA (US$m)

PBT*
(US$m)

Operating cash flow per share** (US$)

DPS
(c)

Yield
(%)

12/21

2,903.8

1,517.3

756.5

4.83

56

2.2

12/22

2,508.1

1,261.3

527.2

4.12

81

4.0

12/23e

2,170.5

1,108.0

530.1

2.63

81

4.0

12/24e

1,921.7

997.0

565.2

3.70

95

4.7

Note: *PBT is normalised, excluding amortisation of acquired intangibles and exceptional items. **Operating cash flow per share is calculated after cash tax paid.

Committed to shareholders

Endeavour has continued with its shareholder returns programme, confirming the payment of a US$100m (US$0.40/share) interim dividend for H123, which on an annualised basis represents US$25m, or 14%, more than the minimum dividend commitment for the year of US$175m. This dividend payment takes total shareholder returns to US$777m since Q121, representing roughly 15% of Endeavour’s current market capitalisation and US$354m more than its minimum commitment during this period.

Valuation: Still beating peers

Using an absolute valuation methodology, whereby we discount back four years of cash flows and then apply a perpetual ex-growth multiple to steady-state terminal cash flows in FY26, our valuation of Endeavour is US$34.90 (C$47.97 or £28.09) per share, using a 10% discount rate. Using a capital asset pricing model (CAPM) derived using a (real) discount rate of 6.34% (based on inflation expectations of 2.4499% derived from US 30-year break-even rates) Endeavour is valued at US$59.31 (C$81.51 or £47.74) per share (cf US$55.79, previously). To these valuations a further US$4.30–7.45/share may be added to reflect the value of Endeavour’s five-year exploration programme (see The second five-year plan, published on 20 October 2021). In the meantime, we note that Endeavour is trading at a discount to its peers on at least 84% of common valuation measures when consensus forecasts are used and 77% if Edison forecasts are used. The average valuation measures of its peers imply a share price for Endeavour of US$24.50 (C$33.83 or £20.04).

Q323 results

As stated throughout the year, Endeavour still expects production from its remaining assets to be weighted towards H223, which has been reaffirmed by Q323 results. It expects to achieve FY23 production of 1,060–1,135koz at an all-in sustaining cost (AISC) of US$895–950/oz. The strong Q323 production figure of 280.8koz was principally the result of better-than-expected output at Houndé, which reported 109koz (cf estimates of 84koz) as stripping activity came to a close at the Kari Pump pit, providing access to higher grades. The increased production at Houndé was somewhat offset by decreases at both Ity and Sabodala-Massawa (owing to lower throughputs and lower average grades). However, our forecasts for Q423 expect production to increase at both these assets, including Mana, which will ultimately drive production in Q423.

Following the divestment of Boungou and Wahgnion, discussed in our last note, Endeavour continues to support the growth of larger, low AISC and longer-life assets such as the Lafigué greenfield project and the Sabodala-Massawa BIOX expansion, which remain on budget and on schedule for start-up in Q224 and Q324 respectively. At the same time Endeavour continues with its exploration efforts, with US$78m of its intended US$80m FY23 budget now spent and it expects to come in slightly over its estimates for FY23.

As a result, we estimate Endeavour’s earnings from mining operations should continue to improve into Q423:

Exhibit 1: Endeavour Mining FY23 forecasts, by quarter

US$000s (unless otherwise indicated)

Implied Q123

Q223

Q323e
(prior)

Q323 (actual)

Q423e
(prior)

Q423e (current)

FY23e (current)

FY23e
(prior)

Houndé production (koz)

46.6

72.1

84.0

109.4

80.0

80.3

308.4

282.6

Karma production (koz)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Ity production (koz)

91.1

85.9

71.0

72.6

73.2

77.4

327.1

321.2

Boungou production (koz)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Mana production (koz)

44.1

31.1

32.0

30.4

70.4

60.2

165.8

177.5

Sabodala-Massawa

61.5

78.6

74.9

68.5

100.9

108.3

317.0

315.9

Wahgnion

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Total gold produced (koz)

243.5

268.0

261.7

280.8

324.4

326.3

1,118.3

1,098

Total gold sold (koz)

252.1

269.0

261.7

278.0

324.4

326.3

1,125.1

1,107

Gold price (US$/oz)*

1,892

1,941

1,916

1,898

1,838

1,947

1,922

1,894

Mine level cash costs (US$/oz)**

681

757

726

735

562

674

710

675

Mine level AISC (US$/oz)

899

951

961

927

769

883

915

890

Revenue

– Gold revenue

481,200

524,100

501,409

530,000

596,316

635,214

2,170,514

2,103,025

Cost of sales

– Operating expenses

171,400

201,800

189,907

205,300

182,429

219,835

798,335

745,535

– Royalties

29,700

31,800

30,703

31,900

36,067

37,912

131,312

128,270

Gross profit

280,100

290,500

280,799

292,800

377,820

377,467

1,240,867

1,229,219

Depreciation

(101,900)

(99,500)

(107,783)

(114,400)

(147,209)

(151,585)

(467,385)

(456,393)

Expenses

– Corporate costs

(13,500)

(14,000)

(15,000)

(10,400)

(15,000)

(10,400)

(48,300)

(57,500)

– Impairments/loss on disposals

0

(14,800)

0

0

0

0

(14,800)

(14,800)

– Acquisition etc costs

– Share based compensation

(8,400)

(8,200)

(6,615)

(5,300)

(7,315)

(7,315)

(29,215)

(30,530)

– Exploration costs

(12,500)

(14,500)

(13,000)

(14,900)

(13,000)

(13,500)

(55,400)

(53,000)

Total expenses

(34,400)

(51,500)

(34,615)

(30,600)

(35,315)

(31,215)

(147,715)

(155,830)

Earnings from operations

143,800

139,500

138,401

147,800

195,296

194,667

625,767

616,997

Interest income

Interest expense

(14,900)

(17,800)

(17,094)

(19,100)

(17,883)

(48,950)

(100,750)

(67,677)

Net interest

(14,900)

(17,800)

(17,094)

(19,100)

(17,883)

(48,950)

(100,750)

(67,677)

Loss on financial instruments

(72,000)

31,100

(2,970)

7,200

(654)

(3,960)

(37,660)

(44,524)

Other expenses

(5,100)

2,600

(7,200)

(9,700)

(2,500)

Profit before tax

51,800

155,400

118,337

128,700

176,759

141,757

477,657

502,296

Current income tax

48,200

91,400

38,718

53,500

50,722

50,510

243,610

229,040

Deferred income tax

(11,800)

(37,200)

0

1,600

0

0

(47,400)

-49,000

Total tax

36,400

54,200

38,718

55,100

50,722

50,510

196,210

180,040

Effective tax rate (%)

70.3

34.9

32.7

42.8

28.7

35.6

41.1

35.8

Profit after tax

15,400

101,200

79,619

73,600

126,037

91,247

281,447

322,256

Net profit from discontinued ops.

5,100

(188,600)

0

(400)

0

0

-183,900

(183,500)

Total net and comprehensive income

20,500

(87,400)

79,619

73,200

126,037

91,247

97,547

138,756

Minority interest

17,300

21,900

16,164

13,900

21,001

20,087

73,187

76,366

Minority interest (%)

84.4

(25.1)

20.3

19.0

16.7

22.0

75.0

55.0

Profit attributable to shareholders

3,200

(109,300)

63,455

59,300

105,036

71,161

24,361

62,391

Basic EPS from continuing ops (US$)

(0.008)

0.321

0.257

0.242

0.426

0.289

0.842

0.843

Diluted EPS from continuing ops (US$)

(0.008)

0.321

0.257

0.242

0.426

0.289

0.842

0.843

Basic EPS (US$)

0.013

(0.442)

0.257

0.240

0.426

0.289

0.098

0.099

Diluted EPS (US$)

0.013

(0.442)

0.257

0.240

0.426

0.289

0.098

0.099

Norm. basic EPS from cont. ops (US$)

0.284

0.255

0.269

0.213

0.428

0.305

1.055

1.056

Norm. diluted EPS from cont. ops (US$)

0.284

0.255

0.269

0.213

0.428

0.305

1.055

1.056

Adj net earnings attributable (US$000s)

65,000

53,700

65,822

69,500

105,581

74,249

262,257

262,449

Adj net EPS from continuing ops (US$)

0.263

0.217

0.267

0.281

0.428

0.301

1.062

1.063

Source: Endeavour Mining, Edison Investment Research. Note: *Average realised price (including Sabodala-Massawa stream). **Excludes royalty costs.

Note that Endeavour changed its definition of cash costs in Q420 to include royalties. The decision was made so that Endeavour could be more consistent in reporting in the context of its peer group. For reasons of comparability with past results, however, as well as ease of forecasting (given royalties are reported as a standalone item distinct from operating expenses), we are continuing to present total cash costs excluding royalties.

In the wake of the changes made to our forecasts, a comparison between our quarterly and full-year forecast and consensus forecasts for FY23 adjusted net EPS is as follows:

Exhibit 2: Edison-adjusted net EPS from continuing operations estimates versus consensus FY23 by quarter

(US$/share)

Q123

Q223

Q323

Q423e

Sum Q1–Q423e

FY23e

Edison

0.263

0.217

0.281

0.301

1.062

1.063

Mean consensus forecast

0.263

0.217

0.281

0.444

1.205

1.054

High consensus forecast

0.263

0.217

0.281

0.580

1.341

1.360

Low consensus forecast

0.263

0.217

0.281

0.300

1.061

0.548

Number of consensus estimates

N/A

N/A

N/A

6

N/A

11

Source: Refinitiv, Edison Investment Research. Note: Consensus at 12 November 2023

Readers should note the discrepancy between the ‘FY23e’ column and the ‘Sum Q1-Q423e’ column in the exhibit above, which strongly suggests that the analysts who are publishing quarterly forecasts are not the same as the ones who are publishing annual forecasts.

Valuation

Endeavour is a multi-asset company that has shown a willingness and desire to trade assets to maintain production, reduce costs and maximise returns to shareholders (eg the sale of Youga in FY16, Nzema in FY17, Tabakoto in FY18, Agbaou in FY20, Karma in FY22 and Boungou and Wahgnion in FY23, and the acquisition of SEMAFO in FY20 and Teranga in FY21). Historically, rather than our customary method of discounting maximum potential dividends over the life of operations back to FY23, for Endeavour we have opted to discount four years of forecast cash flows in FY23–26 back to FY23, then apply an ex-growth terminal multiple of 10x (consistent with using a standardised discount rate of 10%) to forecast cash flows in that year (ie FY26). We would normally exclude exploration expenditure from such a calculation on the basis that it is an investment. In the case of Endeavour, however, we include it because it is a critical component of the company’s ability to continually expand and extend the lives of its mines.

We have updated our FY26 cash flow estimate to US$4.31/share (cf US$4.08/share previously), which implies a terminal valuation of Endeavour at end-FY26 of US$43.0/share, calculated using a discount rate of 10%. With forecast intervening cash flows, this terminal valuation then discounts back to a present valuation of US$34.90/share (cf US$33.52/share, previously) at the start of FY23, as shown in Exhibit 3.

Exhibit 3: Endeavour forecast valuation and cash flow per share, FY23–26e (US$/share)

Source: Edison Investment Research

Now that Endeavour is one of the world’s most important producers of gold, we believe it can increasingly attract lower-cost finance, which leads us to also consider a CAPM-derived valuation. Long-term nominal equity returns have been 9% and 30-year break-evens indicate an inflation rate of 2.4499% (source Bloomberg, 13 November 2023) versus 2.4197% previously. These two measures imply an expected real equity return of 6.34% (1.09/1.024499) and applying this to our forecast cash flows would imply a terminal valuation for Endeavour of US$67.97/share (US$63.46/share previously) and a current valuation of US$59.31/share (US$55.79/share previously).

Endeavour peer valuation

Endeavour’s valuation on a series of commonly used measures relative to a selection of gold mining majors (the ranks of which it has joined since its takeover of SEMAFO and Teranga) is as follows:

Exhibit 4: Endeavour’s valuation relative to peers

Company

Ticker

Price/cash flow (x)

EV/EBITDA (x)

Yield (%)

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Endeavour (Edison)

EDV

7.7

5.3

4.3

4.4

4.5

3.7

4.0

4.8

7.3

Endeavour (consensus)

EDV

6.4

5.0

4.7

5.4

4.9

5.0

3.9

3.9

4.7

Majors

Barrick

ABX

6.8

5.7

5.5

7.5

6.2

5.8

2.7

3.2

3.9

Newmont

NEM

8.1

6.5

6.3

10.7

6.5

6.4

4.8

4.5

4.6

Kinross

K

4.3

4.6

5.0

4.9

5.2

5.6

2.3

2.3

2.3

Agnico-Eagle

AEM

8.9

8.4

8.9

7.3

7.4

8.0

3.4

3.4

2.8

Eldorado

ELD

5.7

5.3

4.7

5.1

4.5

4.1

0.0

0.0

0.0

Average

 

6.8

6.1

6.1

7.1

6.0

6.0

2.6

2.7

2.7

Implied Endeavour share price (US$)

17.70

15.96

15.88

30.19

25.04

25.10

30.68

30.09

29.89

Implied Endeavour share price (C$)

24.44

22.03

21.92

41.68

34.57

34.65

42.35

41.53

41.26

Source: Edison Investment Research, Refinitiv. Note: Prices as at 13 November 2023.

Of note is that, without exception, Endeavour’s valuation is lower than the averages of all nine of the measures shown in Exhibit 4 when consensus forecasts are used and eight of the same nine measures when Edison’s forecasts are used. On an individual basis, it is lower than its senior gold mining peers on at least 38 out of 45 (84%) valuation measures if Edison forecasts are used and 35 out of 45 (77%) valuation measures if consensus forecasts are used. Reverse engineered, the average valuation measures of its peers suggest a share price for Endeavour of US$24.50 (C$33.83 or £20.04), implying the share price is at a 17.8% discount. The current London Stock Exchange share price is £16.48, equivalent to US$20.16 at an exchange rate of US$1.2230/£.

Exhibit 5: Financial summary

US$'000s

2019

2020

2021

2022

2023e

2024e

2025e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,362,121

1,847,894

2,903,756

2,508,100

2,170,514

1,921,651

2,313,963

Cost of Sales

(884,869)

(1,061,891)

(1,675,393)

(1,607,100)

(1,077,362)

(924,633)

(1,071,077)

Gross Profit

477,252

786,003

1,228,363

901,000

1,093,152

997,018

1,242,885

EBITDA

 

 

618,443

910,295

1,517,263

1,261,300

1,107,952

997,018

1,242,885

Operating Profit (before amort. and except.)

 

281,400

546,072

859,409

645,300

640,567

603,729

798,798

Exceptionals

(199,159)

(201,532)

(266,000)

(382,600)

(52,460)

0

0

Other

(9,392)

8,886

(32,263)

(51,900)

(9,700)

0

0

Operating Profit

72,849

353,426

561,146

210,800

578,407

603,729

798,798

Net Interest

(51,607)

(53,774)

(70,623)

(66,200)

(100,750)

(38,545)

(32,906)

Profit Before Tax (norm)

 

 

220,401

501,184

756,523

527,200

530,117

565,184

765,892

Profit Before Tax (FRS 3)

 

 

21,242

299,652

490,523

144,600

477,657

565,184

765,892

Tax

(97,253)

(158,466)

(178,253)

(175,600)

(196,210)

(113,588)

(146,523)

Profit After Tax (norm)

123,148

342,718

578,270

351,600

333,907

451,596

619,369

Profit After Tax (FRS 3)

(76,011)

141,186

312,270

(31,000)

281,447

451,596

619,369

Net loss from discontinued operations

(4,394)

0

0

9,100

(183,900)

0

0

Minority interests

33,126

44,719

64,486

35,400

73,187

68,610

106,829

Net profit

(80,405)

141,186

312,270

(21,900)

97,547

451,596

619,369

Net attrib. to shareholders contg. businesses (norm)

90,022

297,998

513,784

316,200

260,721

382,986

512,539

Net attrib.to shareholders contg. businesses

(109,137)

96,466

247,784

(66,400)

208,261

382,986

512,539

Average Number of Shares Outstanding (m)

157.4

160.8

250.7

247.8

247.0

247.3

247.3

EPS - normalised (c)

 

 

57.20

185.34

204.95

127.59

105.56

154.84

207.22

EPS - normalised fully diluted (c)

 

 

56.95

181.51

203.21

125.32

104.08

152.67

204.32

EPS - (IFRS) ($)

 

 

(0.72)

0.60

0.99

(0.23)

0.10

1.55

2.07

Dividend per share (c)

0

37

56

81

81

95

137

Gross Margin (%)

35.0

42.5

42.3

35.9

50.4

51.9

53.7

EBITDA Margin (%)

45.4

49.3

52.3

50.3

51.0

51.9

53.7

Operating Margin (before GW and except.) (%)

20.7

29.6

29.6

25.7

29.5

31.4

34.5

BALANCE SHEET

Fixed Assets

 

 

2,330,033

5,093,409

5,404,900

4,968,300

5,328,390

5,479,102

5,386,681

Intangible Assets

5,498

24,851

10,000

0

0

0

0

Tangible Assets

2,254,476

3,968,746

4,980,200

4,517,000

4,877,090

5,097,802

5,005,381

Other**

70,059

1,099,812

414,700

451,300

451,300

381,300

381,300

Current Assets

 

 

652,871

1,168,382

1,366,000

1,446,400

1,081,158

1,085,987

1,445,658

Stocks

266,451

305,075

311,300

320,700

271,314

240,206

289,245

Debtors

83,836

104,545

139,900

163,400

234,898

214,444

246,689

Cash

288,186

751,563

906,200

951,100

516,346

572,737

851,124

Other

14,398

7,199

8,600

11,200

58,600

58,600

58,600

Current Liabilities

 

 

(354,931)

(661,171)

(567,100)

(1,045,600)

(724,078)

(704,388)

(762,966)

Creditors

(312,427)

(612,862)

(552,700)

(690,800)

(699,278)

(679,588)

(738,166)

Short term borrowings

(42,504)

(48,309)

(14,400)

(354,800)

(24,800)

(24,800)

(24,800)

Long Term Liabilities

 

 

(963,736)

(1,647,799)

(1,818,100)

(1,281,800)

(1,595,500)

(1,595,500)

(1,595,500)

Long term borrowings

(770,902)

(1,026,337)

(878,600)

(517,000)

(877,000)

(877,000)

(877,000)

Other long term liabilities

(192,834)

(621,462)

(939,500)

(764,800)

(718,500)

(718,500)

(718,500)

Net Assets

 

 

1,664,237

3,952,821

4,385,700

4,087,300

4,089,970

4,265,201

4,473,873

CASH FLOW

Operating Cash Flow

 

 

628,617

1,046,370

1,415,306

1,211,200

892,273

1,028,890

1,220,180

Net Interest

(35,413)

(53,774)

(26,900)

(66,200)

(100,750)

(38,545)

(32,906)

Tax

(109,494)

(186,332)

(205,573)

(189,200)

(243,610)

(113,588)

(146,523)

Capex

(401,227)

(335,599)

(587,496)

(534,300)

(888,575)

(614,000)

(351,667)

Acquisitions/disposals

3,654

(19,000)

(4,700)

12,900

145,000

70,000

0

Financing

2,402

100,000

(89,400)

(101,200)

(19,938)

0

0

Dividends

(6,154)

(88,288)

(159,800)

(223,800)

(249,154)

(276,365)

(410,696)

Net Cash Flow

82,385

463,377

341,437

109,400

(464,754)

56,391

278,387

Opening net debt/(cash)*

 

 

518,607

525,220

323,083

(13,200)

(79,300)

385,454

329,063

Other

(88,998)

(261,240)

(5,154)

(43,300)

0

0

0

Closing net debt/(cash)*

 

 

525,220

323,083

(13,200)

(79,300)

385,454

329,063

50,676

Source: Company sources, Edison Investment Research. Note: Presented on a pro forma basis with SEMAFO fully consolidated (income statement, balance sheet and cash flow statement) from FY18 balance sheet and Teranga from FY20 balance sheet. EPS normalised from FY18 to reflect continuing business only. *Excludes restricted cash. **Includes restricted cash and investments.


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This report has been commissioned by Endeavour Mining and prepared and issued by Edison, in consideration of a fee payable by Endeavour Mining. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Endeavour Mining and prepared and issued by Edison, in consideration of a fee payable by Endeavour Mining. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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