Endeavour Mining Creating a premier gold producer in West Africa Neil Woodyer, CEO Mines & Money London December 05
Disclaimer & Forward Looking Statements Cash cost per ounce and all-in sustaining cash cost per ounce are non-gaap performance measures with no standard meaning under IFRS. This presentation contains forward-looking statements including but not limited to, statements with respect to Endeavour Mining's plans and operating performance, the estimation of mineral reserves and resources, the timing and amount of estimated future production, costs of future production, future capital expenditures, and the success of exploration activities. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as expects, expected, budgeted, forecasts and anticipates. Forward looking statements, while based on management s best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the successful integration of acquisitions; risks related to international operations; risks related to general economic conditions and credit availability, actual results of current exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Endeavour Mining operates. Although Endeavour Mining has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements. Please refer to Endeavour Mining s most recent Annual Information Form filed under its profile at www.sedar.com for further information respecting the risks affecting Endeavour Mining and its business.
Endeavour Mining: a growing West African gold producer Listed on TSX (symbol EDV ) On track to produce 475k 500k oz in 05 At AISC of between $930 - $980/oz From five mines in four countries In West Africa Focused on: Growing operational cash flow and profits Extending mine lives by adding reserves & resources Share price CDN$0.60 Continually improving the asset base Strong capital structure and balance sheet Growth through build and acquire strategy to create value Issued Shares (M) 590 Market Cap (US$M) 65 Net Debt (US$M) 7 Enterprise Value (US$M) 38 0: share consolidation was approved by shareholders on 5 November 05; data reflects share price and number of shares as of 7 November 05 The US$63 million cash investment by La Mancha is inclusive of an expected US$5 million of attributable cash held in SMI (representing 55% of an anticipated US$45 million cash balance at closing), with the balance being invested into the La Mancha subsidiary being sold to Endeavour 3
With strong operational and financial performance For 9 months ended 30 Sept 05, Produced 380,000oz At AISC of $97/oz EBITDA of US$34m to 30 Sept 05 Net income of US$57.m Generated $73m free cash flow (before tax and financing) Cash balance of $3m Attributable P reserves of 4.8moz 4
West Africa has a long history of gold mining Known as the Gold Coast Between 400 and 500, West Africa was the world s most important supplier of gold Mansa Musa I of Mali a 4th century African king is the richest person in all history 5
Supported by highly prospective geology Africa has a number of greenstone gold belts but the Birimian is the most productive on the Continent 6
China Australia Russia West Africa United States Peru South Africa Canada Mexico Brazil Australia South Africa Russia West Africa United States Brazil Peru China Mexico Canada West Africa is an important world producer of gold West Africa is a major global gold producing region 04A Gold Production (Moz) with considerable unmined reserves Unmined Gold (Moz) 0.0 5.0 6.3 300 5 6 76 0.0 5.0 9.6 9.4 8.9 7.4 6.0 5.9 5.3 3.9 3. 50 75 08 06 9 78 67 49 3 0.0 0 Source: World Gold Council, SNL Estimated P gold mine reserves as defined by the World Gold Council and the USGS 7
United States West Africa Canada China Russia Peru Brazil Australia South Africa Mexico Peru China Russia Mexico West Africa USA Canada Australia Brazil South Africa An ideal environment for developing meaningful mines with competitive operating costs Mainly mid-sized, 0 year+ mines Median Gold Mine Size (04A Production, Koz) 50 3 05 05 00 63 58 56 45 39 50 37 00 50 0 8 with globally competitive cost positions Global Cost Position (04 AISC US$/oz),00,36 994 996,039,000 90 93 937 73 75 783 800 600 400 00 0 Source: World Gold Council, SNL Shows median production for gold mines producing >75koz in 04 (removes sub scale private operations) 8
Attractive jurisdiction to operate and explore Gold Production as a % of GDP Country Policy Perception Fraser Institute Best Practices Mineral Potential Investment Attractiveness West Africa Peru 4.%.9% Ghana* 4 th / 30 7 th / 30 5 th / 30 South Africa.3% Burkina Faso* 3 rd / 30 3 th / 30 6 th / 30 Australia 0.8% Côte d'ivoire* 0 th / 30 9 th / 30 9 th / 30 Russia 0.5% Liberia 8 th / 30 7 th / 30 th / 30 Mexico 0.4% Guinea 0 th / 30 8 th / 30 3 th / 30 Canada 0.3% Mali* 9 th / 30 6 th / 30 6 th / 30 China 0.% Mauritania 4 th / 30 3 rd / 30 7 th / 30 Brazil 0.% United Senegal na na na 0.% States 0.0% 3.0% 6.0% 9.0%.0% Source: World Gold Council, Fraser Institute, SNL * Indicates countries where Endeavour Mining operates Shows rank out of all African countries rated by Fraser Institute 30 countries total; Policy Perception measures the effects of government policy on attitudes towards exploration investment; Best Practices Mineral Potential ranks regions based on geological attractiveness; Investment Attractiveness is a combination of the Policy Perception and Best Practices Mineral Potential rankings 9
'000 ounces Endeavour Mining s successful Build & Acquire strategy 900 AISC/oz 800 03: $,37 ~800,000 ozs Houndé: FS in 03, fully permitted for 06 construction decision potential Q4/07 production 700 04: $,00 600 05 (9m): $97 50 Ity Heap Leach: 5 th mine, potential to extend to 09/00 with definition of additional resources and CIL reserves 500 3 400 60 Agbaou: FS in 0, construction and start up in 03, low-cost operations 300 50 Tabakoto: 3 rd acquisition, mill expanded, converted to owner mining, improved mill feed 00 00 80,000 ozs 0 Nzema: nd acquisition, recapitalized - 00A 0A 0A 03A 04A 05E 06E 07E 08E 70 Youga: st acquisition, now a mature mine Source: Historical figures based on company filings 0
Creating value for all stakeholders YTD Share Price Performance Source: Factset; Company website
Further opportunity for consolidation Gold production is highly fragmented Tasiast (Kinross) MAURITANIA MALI with limited consolidation amongst major miners Consolidation Reserves held by Top 3 Miners Mexico 6% SENEGAL Tabakoto Inata Essakane Sabodala Yatela Karma BURKINA OJVG Sadiola Taparko Bissa FASO Loulo/Gounkoto Yaramoko Natougou Fekola Yanfolila Morila Houndé Mana Youga Lefa Corridor Kiaka Morila Tri-K Syama Banfora South Houndé Tengrela GUINEA Batie West COTE D'IVOIRE GHANA New Liberty Bonikro Ahafo, Akyem Ity Chirano Ashanti Belt LIBERIA Esaase (Edikan, Grumesa) Bogoso Wassa Agbaou Iduapriem Nzema West Africa Canada China Brazil Australia South Africa 36% 53% 55% 58% 59% 68% Peru 70% 5+ Notable producing companies 80+ Relevant development & exploration projects USA 7% Russia 78% 0% 0% 40% 60% 80% Source: SNL, Wood Mackenzie Held by Top 3 companies by reserve base
In the most cost-effective region to grow Cost to Acquire Production (US$/oz) Cost to Build New Projects (US$/oz),600,400,395,600,400,477,00,8,00,6,000 860,000 800 800 600 600 400 400 00 00 0 West Africa West Africa + 30% Premium Global average 0 West Africa Global average Source: SNL, Wood Mackenzie Cost to acquire production calculated as: EV / 05E production Cost to develop new projects calculated as initial development capex (adjusted for 4 month build period) / average annual LOM production 3
Summary: a premier African gold producer Endeavour Mining has a clear focus on: Growing operational cash flow and profits Extending mine lives by adding reserves & resources Continually improving the asset base Strong capital structure and balance sheet Growth through build and acquire strategy to create value 4
Appendix 5
Endeavour Mining Top Ranking in West Africa Number of Mines / Projects 05E Production (koz) Production Growth AISC 05E (US$/oz) 5 500+ 0% 97 5 66 (3%),0 3 57 (%) 859 455 (6%),038 96 4% 78 58 (%) 67 76 % 77 73 (%), 366 (3%),060 495 %,006 3 (3%) 95 08 3%,87 06 %,9 98 5% 937 7 (7%) 730 08 4%,04 39 43%,3 Operating mines Source: Factset, company flings, broker reports Attributable to West Africa 05-08 Production CAGR Projects 6