Earnings call: Endeavour Mining on track with production, plans shareholder returns

Endeavour Mining Corporation (TSX:EDV), a leading gold producer, reported during its recent earnings call that it is on course to meet its production guidance for the 12th consecutive year.

However, all-in sustaining costs are anticipated to be at the higher end of the forecast range, attributed to challenges with power availability and an uptick in gold prices. Despite these cost pressures, the company remains committed to delivering substantial shareholder returns, announcing a policy to return at least $435 million in dividends over the next two years.

Endeavour also celebrated achieving first gold at the Sabodala-Massawa BIOX expansion and the Lafigue mine, both within budget and on schedule. The company's focus on organic growth is evident through its strategic investment in exploration, particularly in Côte d'Ivoire with KulLu Gold, and in advancing its ESG strategy, as reflected by an improved Sustainalytics score.

Key Takeaways

• Endeavour Mining is set to achieve its production guidance for the 12th year in a row.
• All-in sustaining costs are expected to be at the high end due to power issues and higher gold prices.
• A new policy pledges at least $435 million in dividends to shareholders for 2024 and 2025.
• The company has launched first gold at the Sabodala-Massawa BIOX expansion and Lafigue mine on time and budget.
• Endeavour is focusing on organic growth and exploration, with significant investment in Côte d'Ivoire Explorer KulLu Gold.
• The company received an improved Sustainalytics score, highlighting progress in its ESG strategy.

Company Outlook

• Endeavour Mining expects to resolve power availability issues in the second half of the year.
• The company plans to reach nameplate capacity in Q3 and maintain production at 90% of nameplate capacity.
• A strong construction track record with five projects completed in West Africa within two years and on budget.
• Endeavour aims to de-leverage its balance sheet while delivering attractive shareholder returns.
• Commercial production at Lafigue is expected in Q3, with the mine currently operating at 90% of nameplate capacity.

Bearish Highlights

• All-in sustaining costs have risen by 9%.
• Adjusted net earnings were impacted by higher taxes, with current income tax expense increasing to $135 million.
• Losses on financial instruments, including gold hedges and marketable securities, affected financial performance.

Bullish Highlights

• Production increased by 15% in Q2, contributing to higher EBITDA and operating cash flows.
• Safety performance remains strong, with a focus on contractor management.
• The company's de-leveraging plans include significant debt repayment by the end of 2025.

Misses

• Higher all-in sustaining costs due to power availability issues and rising gold prices.
• Adjusted net earnings took a hit from an increase in taxes and losses on financial instruments.

Q&A Highlights

• The company remains focused on capital projects and maximizing returns.
• Assafou is highlighted as a key exploration opportunity.
• Power costs in Burkina Faso and Ivory Coast are stable, with expected grid utilization of 62% and 72%, respectively.
• Executives expressed confidence in improved financial performance in the upcoming quarter.

Endeavour Mining's earnings call underlined its steadfast commitment to production excellence and shareholder value despite facing headwinds from increased costs. The company's strategic focus on organic growth, exploration success, and robust ESG initiatives positions it favorably for continued operational success and financial stability.

InvestingPro Insights

Endeavour Mining Corporation (EDVMF) has been navigating a complex market environment, but recent data and insights from InvestingPro paint a multifaceted picture of the company's financial health and stock performance. With a current market capitalization of $5.39 billion, Endeavour's size reflects its significant presence in the gold production industry.

InvestingPro Tips indicate that management's confidence in the company's prospects is underscored by an aggressive share buyback strategy. This demonstrates a commitment to enhancing shareholder value and a belief in the intrinsic value of the company. Additionally, the company has a track record of raising its dividend for three consecutive years, signaling a dedication to returning value to shareholders, which aligns with the company's recent announcement of a policy to return at least $435 million in dividends over the next two years.

On the performance front, despite not being profitable over the last twelve months, analysts are optimistic, predicting that Endeavour will be profitable this year. This forward-looking perspective is crucial, as it may influence investor sentiment and the company's ability to continue financing its growth and exploration initiatives.

From a financial metrics standpoint, the company's revenue growth of nearly 6% over the last twelve months as of Q1 2024 indicates a steady upward trajectory in sales. However, the negative P/E ratio of -30.72 suggests that the market has had concerns about the company's profitability in the recent past. Still, the PEG ratio of 0.07 points to a potential undervaluation of the stock if earnings growth expectations are realized.

InvestingPro also notes a significant price uptick over the last six months, with a 25.34% total return, reflecting a market that is perhaps beginning to recognize the company's value proposition. This data, coupled with a high return over the last decade, may interest long-term investors seeking a company with a proven ability to navigate market cycles.

For readers interested in a deeper dive into Endeavour's financials and stock performance, InvestingPro offers additional tips and insights. There are 7 more InvestingPro Tips available for EDVMF, providing a comprehensive analysis for potential and current investors.

Endeavour Mining's commitment to shareholder returns and exploration, paired with the insights from InvestingPro, suggest a company that is strategically positioning itself for future profitability and growth despite recent profitability challenges.

Full transcript - Endeavour Mining Cor (EDVMF) Q2 2024:

Jack Garman: Hello, everyone and welcome to Endeavour's Quarter Two and Half-Year Results Webcast. Before we start, please note our usual disclaimer. On the call today, I'm joined by Ian Cockerill, our CEO; Guy Young, our CFO; and Mark Morcombe, our COO. Today's call will follow our usual format. Ian will first go through the highlights of our results. Guy will present the financials and Mark will walk you through our operating results by mine. Before handing back to Ian for his closing remarks. We will then open the line up for questions. With that, I will now hand over to Ian.

Ian Cockerill: Thank you, Jack, and hello to everyone joining us on the call today. I'm pleased to report that during my first half year as Chief Executive Officer, we are continuing to deliver against our strategic objectives. On the operational side, we remain on track to achieve our production guidance for the 12th consecutive year, with all-in sustaining costs expected to be near the top end of the range. This is due to the lower-than-expected power availability in Côte d'Ivoire and Burkina Faso, which resulting in the need for more costly self-generation -- power generation, higher gold prices driving increased royalty costs and the higher costs at Sabodala-Massawa and Mana. However, we anticipate a reversal of the power issue in the second half. and we're already seeing that and we remain focused on bringing down the costs that we can control. We were pleased to see our net debt and our leverage stabilize. as our growth projects approach completion. And during the quarter, we started paying down our gross debt as well. We expect our net debt position and our leverage to improve over the coming quarters. With the increased visibility to lower leverage and higher free cash flow generation, we're pleased to announce our new shareholder returns policy. And that policy is that we are pledging to return at least $435 million in dividends to shareholders in 2024 and 2025, which we expect to supplement with additional dividends and opportunistic buybacks. For 2024, we'll pay a minimum of $210 million, which just to put it in context is a 20% increase on our minimum dividend we declared for last year. We were pleased to declare our $100 million dividend for H1 2024, whilst we also completed $20 million of share buybacks during the period, bringing our total return to $120 million, or $255 for each ounce that we produced. I'm also pleased with the progress we've made during the quarter at both of our projects delivering first gold at the Sabodala-Massawa BIOX expansion in April and then first gold at the Lafigué mine in June, both on budget and on schedule in less than two years, which is a tremendous achievement. We've now shifted our focus towards ramping up these two high-quality projects that will continue to improve the geographic diversification and the quality of our portfolio, whilst underpinning a stronger H2 performance this year. We remain focused on growing the business organically, and we are continuing to offset our longer-term organic pipeline through our exploration program. This has made good progress during the quarter by advancing resource to reserve conversion at our key mines and projects, which is a key priority for us this year. You've probably also noticed our key strategic investment in a junior Côte d'Ivoire Explorer called KulLu Gold. We've also returned strong results at the Assafou deposit the Tanda-Iguela and several satellite deposits on the Tanda-Iguela property and we will provide an update on our positive progress that we've achieved later this year on this specific project. Finally, we're continuing to progress our ESG strategy, as we focus on those initiatives that protect our people and the places where we operate whilst also supporting the long-term success of our business. But before I walk through the quarterly details, I wanted to thank our outgoing Chief Operating Officer, Mark Morcombe, and our EVP Exploration Jono Lawrence for their years of dedicated service and their significant contributions during that time. They've both decided to leave to pursue other opportunities and we wish them well in their new ventures. Whilst there will be missed as individuals, they leave behind capable teams who will continue the good work both of them bought to their roles. As we transition into a new phase, focused on maximizing the performance of our existing operations to support our ambitious capital allocation priorities, I've taken this opportunity to restructure and reorganize the leadership to strengthen the operational and technical management within the team and to ensure that we can effectively deliver against our strategic objectives. I'm pleased to welcome Djaria Traore into her new role as EVP Operations and ESG; and Martin White into his new role as EVP and Chief Technical Officer. Both Djaria and Martin have an excellent track record at creating value within Endeavour and I have no doubt that this will continue in their new roles. Over the next slides I'll touch upon our progress this quarter before handing over to the rest of the team for a more detailed update. So looking at Slide 7. Turning to Slide 7 you can see our quarterly production and all-in sustaining margin trend. Production increased quarter-on-quarter to 251,000 ounces in Q2 due to increased production at Ity Hounde as well as Sabodala-Massawa. While our all-in sustaining margin also increased largely due to the improved gold price environment. This was partially offset by the increase in costs associated with lower grid power availability in Cote d'Ivoire and Burkina Faso and the higher royalty rates due to the higher gold prices which Guy will touch on in more detail; as well as the higher costs associated with Sabodala and the minor mines. On Slide 8 you can see how our operating performance is tracking. On the safety side, our industry-leading lost time/injury frequency rate remains stable, but there's always room to improve as we work towards zero harm across all our operations. But in fairness we are pleased with the level of safety performance that we have in the group. Our production remains on track to achieve the guided range, whilst our all-in sustaining cost is expected to be towards the top end of that range. As I mentioned, our all-in sustaining cost this year have been impacted by the high gold prices driving higher royalty costs. The cost impact of lower grid availability, lower grid power availability and increased self-generated power in H1 as well as lower production and higher costs at Sabodala. As we said in January this year, our production performance is weighted strongly towards the second half of the year with increased production expected from Hounde as well as additional production being introduced from the two projects, as they ramp up to nameplate capacity in Q3. On the cost side, we've also started to see significant improvement in power grid availability in Burkina Faso and Cote d'Ivoire which will support improved costs in the second half. And we're also looking at several measures to improve the performance at Sabodala-Massawa. On Slide 9, our operating cash flow increased by $203 million in the quarter and that was due to higher production at higher gold prices, a working capital inflow due to an increase in payables, as the projects advance towards completion and due to the inflow of the $150 million gold prepayment that was previously disclosed. On Slide 10, you can see that despite our continued investment in organic growth and exploration during the quarter, our leverage and our net debt remains stable and healthy. We also reduced our gross debt by paying down $70 million on our RCF. As our two growth projects ramp up in the second half of the year, we will increase our focus on balance sheet improvement bringing our leverage lower. That will further strengthen our financial position, so that we can increase our focus on shareholder returns, while remaining well positioned to launch into our next phase of growth most likely with Assafou from 2026. Slide 11 shows us the shareholder returns are one of our capital allocation priorities and we're delighted to outline our new shareholder returns program. We are going to return at least $435 million in dividends to shareholders over the 2024 and 2025 period, assuming the gold price remains above $1850 an ounce and our leverage remains healthy. For 2024, we'll pay a minimum dividend of $210 million being an increase of 20% on last year's minimum dividend and we also expect to supplement that minimum with additional dividends and opportunistic share buybacks in the higher gold price environment. During our last program, we returned 78% above the minimum commitment during a capital-intensive phase of growth. So we expect to mirror that level of commitment with our updated program. On Slide 12, you can see that by the end of 2025, we will have returned at least $1.35 billion to shareholders. That's approximately 1/4 of our market cap returned over a five-year period. We don't intend to stop there, as we believe this business is well positioned to sustain attractive shareholder returns through the cycle as well as beyond 2026. For H1 this year, we're pleased to declare a $100 million dividend, which we supplemented with $20 million of share buybacks during the period. That's a return of $255 to every ounce produced in H1 and it's equivalent to an attractive indicative annualized yield of over 4.3%, which reiterates our commitment to supplemental returns and opportunistic buybacks. Following our H1 dividend, we will have returned over $1 billion to shareholders since we first started this scheme in Q1 2021. Again, equivalent to $223 returned to shareholders every ounce produced over that period. And that can only – has only been possible because of the high margins that we generate and the healthy balance sheet position we've been able to maintain. Moving on to our organic growth projects on Slide 14. We delivered first gold at Sabodala-Massawa BIOX expansion in early May, after advancing the project from construction launch to first gold in under two years. We delivered the project on budget and on schedule with over 3.5 million man-hours worked without sustaining any lost time/injury. We're now shifting our focus to the ramp-up. And while we're on track to reach nameplate capacity from the BIOX plant of 1.2 million tonnes per annum. In Q3, we're also working on optimizing the existing CIL plant and the new BIOX plant in order to improve both the production and cost outlook. And Mark will take you through some of those initiatives in his section. Moving to our next growth project Lafigue. We delivered first gold in late June, a full quarter ahead of schedule and only 21 months after construction launch and the project was also delivered on budget and within schedule. We're ramping up Lafigue and we expect to reach nameplate capacity in Q3. In July, we were processing at close to 90% of nameplate capacity and the mine is on track to achieve its guidance within the year. And not only do we do that nameplate capacity not just once but we were able to do it fairly consistently. On Slide 15, we can see that as the projects approach completion, I wanted to highlight our industry-leading construction track record. We've now built five projects in the last 10 years in West Africa. All of these projects are being delivered on budget, on schedule and we've built them in less than two years. What's even more impressive is that as these mines become established and ramped up, we've been able to significantly outperform nameplate capacity, due to operational efficiencies and low-cost optimization initiatives. On exploration during quarter two, we continue to prioritize resource to reserve conversion as well as the high priority Assafou project and the target surrounding it. We will show a significant reserve increase in our year-end update, given the success we've seen at Ity as well as in Assafou, where work is underway to convert the sizable measured and indicated resource into reserves with a very high conversion factor. We've also increased our exploration guidance at Sabodala-Massawa to support the near-term non-refractory ore mine plan, which will provide higher grade ore for the CIL plant. And we're advancing two deposits Kiesta C and the Niakafiri West, the shallow high-grade non-refractory oxide opportunities that could support the 2024 mine plan and improve production at the CIL plant in H2. Due to the exploration success at Hounde and at Ity in particular as we get greater confidence in a larger more cohesive ore body, this year as well as the focus on accelerating the development of these deposits at Sabodala-Massawa we've increased our exploration budget from $65 million to $77 million. At Tanda-Iguela or as we will now refer to it as a Assafou on slide 17, we've already defined a 4.5 million ounce resource at two grams a tonne. We're continuing to see positive results at the deposit. And so far we have identified continuations of the mineralization at depth below the current pit shelf and in shallow areas in the southwest of the deposit. So Assafou continues to grow and we're going to provide an update later this year. And it certainly is showing signs of really confirming the success that we originally saw and we're -- as we look at some of our regional targets in close proximity to Assafou. At the Pala Trend number 3 target which is less than one kilometer southwest of the Assafou, we've now defined shallow mineralization over 900 meter strike length and we've discovered a new target about five kilometers Northwest of Assafou called Koume-Nangare with preliminary results highlighting mineralization is hosted within Birimian rocks. We're going to continue to advance exploration at both Assafou and the regional targets this year as we work towards completing the Assafou PFS by year end. We'll then reevaluate the scope of this complex ahead of commencing on the DFS. Before I hand over to Guy, I wanted to briefly touch on ESG. As we continue to progress our ESG strategy, we were delighted to receive an improved Sustainalytics score that ranks Endeavor as the highest gold producer in the sector. One area we have expanded on this year is our reforestation efforts. These include a 40-hectare project at Lafigue with the YES Foundation funding for a new Arboretum at the University of Delaware and planting over 3,200 trees through our One Worker One Tree initiative. And I'm pleased to see the range of initiatives we have in place to work towards our biodiversity targets and continued support of our local ecosystems. And with that introduction let me hand you over to Guy who can take you through the financials. Guy over to you.

Guy Young: Thanks, Ian and hello, everyone. I will just take you through the Q2 financial highlights. To summarize our financial highlights for the quarter our production from continuing operations was up 15% over the first quarter and our all-in sustaining cost was up 9%. The stronger production along with higher realized gold price drove significantly higher EBITDA and also supported higher operating cash flows in addition to a working capital inflow and the proceeds of the $150 million prepayment that we previously disclosed. Our net earnings and adjusted net earnings were lower largely due to higher tax expenses. I'll now walk through the details starting with our production and all-in sustaining costs. Our production increased by 32,000 ounces to 251,000 ounces for the quarter due to stronger production at Hounde, Ity and Sabodala-Massawa while our all-in sustaining costs also increased $101 per ounce during the quarter due to higher-than-anticipated power costs as well as increased royalty rates due to the higher gold price and higher cost Sabodala-Massawa and Mana. Looking at our ASIC in a bit more detail on slide 22. Our higher operating costs were largely offset by increased volumes of gold sold and lower sustaining capital. A significant contributor to the all-in sustaining cost increase were the higher power costs and royalties. Power costs increased by $52 per ounce due to the lower grid availability during the quarter resulting in us having to self-generate more power and at a higher cost. In addition, we incurred higher royalty costs of $27 per ounce given the higher gold prices. Together these resulted in a $79 per ounce impact on our all-in sustaining cost quarter-over-quarter and approximately $100 per ounce impact on the half year. Given the impact of the lower availability of grid power I wanted to spend some time going through the detail on slide 23. As you can see in the top half of this slide our average grade availability at Ity was 69% last year. And in the bottom half of the slide at Hounde and Mana it was 91%. We prioritize using power from the grid firstly because it's much lower cost than self-generated power. So, for example, at Ity, grid power currently costs around $0.18 per kilowatt hour, approximately 60% of the cost of self-generated power. In Burkina Faso, grid power currently costs around $0.23 per kilowatt hour, which is less than 50% of the cost of self-generated power. The other reason that we use grid power is because the grid is a 23% renewable contribution in Cote d'Ivoire and 13% in Burkina Faso, which clearly supports our low emissions intensity. The reason for the lower grid availability is down to the fact that in April, the Azito and Ciprel natural gas power plants in Cote d'Ivoire had two simultaneous breakdowns, removing approximately 650 megawatts from the grid, which was already strained having lost 250 megawatts of capacity in January. As a result, grid availability fell to a low of 6% in May. Burkina Faso imports about a-quarter of its power from Cote d'Ivoire and was therefore also impacted with grid availability falling to 16% in April. As a result, we have to self-generate our full capacity at Ity, Hounde and Mana, albeit at a significantly higher cost. The Ciprel power station has now been restored, and the Azito power station has been partially restored, while renewable projects have also been accelerated. What this means is the power availability in July has significantly improved to around 62% at Ity, and 72% at Hounde and Mana, which should support improved costs in the second half. If we turn now to earnings on slide 24, our adjusted EBITDA increased during the second quarter to $249 million, while our EBITDA margin remained stable at 45%. Higher production at higher gold prices supported the higher EBITDA, which was partially offset by higher costs. On slide 25, and our operating cash flow. This increased significantly to $258 million during the quarter, driven by the higher production and sales at higher prices as well as a working capital inflow and the $150 million prepayment that we announced in our Q1 results. Here, you can see a bridge of our quarter-over-quarter variances in operating cash flow. And you'll note that the realized gold price and increased gold sales drove an $87 million increase. While operating expenses and income taxes were $160 million higher due to higher mining and processing costs and the timing of payments for the 2023 tax year in Senegal and Cote d'Ivoire. The change in working capital increased by $127 million, driven by improved trade and other receivables and an increase in trade in other payables. Operating cash flow also benefited from the $150 million in proceeds from the previously disclosed gold prepayments. And that will support the company's offshore cash position during the end of its investment phase for a relatively low cost of capital of just over 5%. This is expected to reverse in Q4 this year at the time of settlement. If we move to slide 26 and take a look through our change in working capital, which reversed from an outflow of $82 million last quarter to an inflow of $45 million in the second quarter. The inflow was largely driven by trade and other payables of $64 million due to increased payables across suppliers, minority dividends, royalties and payroll-related liabilities; and an inflow of trade and other receivables of $29 million, which reflects the inflow of VAT receivables in Senegal and the timing of gold sales and proceeds. These inflows were partially offset by a drawdown on inventories of $31 million and prepaid expenses of $18 million that relate primarily to activities around our projects as they ramp up towards commercial production in Q3. As such, we would expect these outflows to start to unwind as we move through the second half of this year. Turning to slide 27. Our net debt was stable in Q2 as we approach the end of our investment phase. Operating activities from continuing operations generating the $250 million, as I've just explained. Investing activities were $171 million, comprised principally of approximately $22 million of sustaining capital, $52 million of non-sustaining capital and $93 million of growth. Financing activities was an outflow of $150 million, which included a $17 million repayment of our RCF, minority dividend payments of $37 million and payment of financing fees of $30 million. Share buybacks were $8 million in the period and payment of lease obligations of around $6 million among some other items. The group incurred a loss of $5 million from the foreign exchange re-measurement of cash balances due to the increase in the U.S. dollar to euro exchange rate during Q2. Looking forward, we remain focused on improving our net debt and seeking to de-lever the balance sheet as quickly as we can. Lastly, if we move through to our net earnings from continuing operations on Slide 26, overall our adjusted net earnings were primarily impacted by higher taxes. I won't go through each of the line items, but just focus on a couple of the key numbers. Our current income tax expense increased to $135 million, largely due to an increase in recognized withholding tax expenses which increased to $74 million as a result of the timing of local board approvals for cash upstreaming in addition to an increase in tax expenses due to higher earnings and the impact of the temporary contribution of 2% of profits before tax to the government of Burkina Faso which was introduced in Q1. The loss on financial instruments included realized losses on gold hedges of $8 million, unrealized FX losses of $7 million and an unrealized loss on marketable securities of $4 million. Along with unrealized losses on NSRs and deferred compensation related to asset sales of $2 million amongst some other items. The adjustments we made include unrealized losses on financial instruments of $12 million largely related to the unrealized loss on gold hedges. Other expenses of $19 million which included legal and other costs for the ongoing arbitration, a net loss from discontinued operations of $6 million, in association with the settlement of historic liabilities under the sale agreement to the Boungou Mine and the loss on non-cash tax and other adjustments of $10 million that relates to the impact of FX remeasurements of deferred tax balances. With that, I'd like to hand over to Mark, to take you through the details from an operational perspective. Mark?

Mark Morcombe: Thank you, Guy and hello to everyone, joining the call today. Before I go into our mine-by-mine detail, let's look briefly at our safety performance. We've maintained our industry-leading lost time injury frequency rate from continuing operations of 0.11 per million hours, while increasing the number of people on site through the final phases of project construction and on bringing Lafigué into production. Overall, we are very proud of our safety performance, yet we must remain focused on improving key aspects such as training frontline supervision and operational reviews to ensure that we eliminate all serious injuries and incidents. With four out of five of our reportable incidents year-to-date coming from contract to workforce, we've put even more focus on contractor management through a suite of safety reviews across all operations including workplace inspections, audits and general safety days. Looking at the portfolio performance, we are on track to achieve our full year production guidance for the 12th consecutive year, while we expect to be near the top end of our cost guidance. At Ity, given the strong start to the year we expect production to be above the top end of the guidance range and all-in sustaining costs to be within the range. Production is on track at Houndé, Mana and Lafigué while all-in sustaining costs are on track at Houndé and Lafigué and expected to be near the top end at Mana. At Sabodala-Massawa our production is expected to be below the low-end of the guidance range, while our costs are expected to be above the top end of the guidance range, due to mining and processing of lower-than-expected grade non-refractory ore from the Sabodala pit and the impact of a larger volume of semi-refractory transitional ores from the Massawa Central Zone pit with lower recovery rates in the processing plant. At a group level, production is expected to be stronger in the second half of the year with improvements in performance at Houndé as well as Sabodala-Massawa and Lafigué as they both ramp up, adding incremental low-cost production to the group profile. I will now walk through each mine starting with Sabodala-Massawa on Slide 32. Production increased during the second quarter due to increased tonnes milled with the start-up of the BIOX plant and average grades processed partially offset by decreased recovery rates. While at the same time, all-in sustaining costs rose as a direct result of higher mining unit costs driven by increased diesel consumption and higher sustaining capital. Following the mining and processing of lower-than-expected grade, non-refractory ore from the Sabodala pit and additional volumes of semi-refractory ore from the Massawa Central Zone pit with lower associated recoveries. Sabodala-Massawa is expected to achieve production for the full year below the bottom end of its production guidance with an all-in sustaining cost above the top end of the guidance range. Moving on to slide 33. At Sabodala-Massawa, we're looking to focus on optimizing both the existing CIL plant and the BIOX plant as we ramp up production to improve the outlook for 2024 towards the guided range. Firstly and as a priority, we're looking to incorporate some higher-grade resources into the near-term plan for the CIL plant. Our exploration budget at Sabodala-Massawa has been increased by around 20% this year as we accelerate the grade control definition of the Kiesta C deposit where we are already pre-stripping and the Niakafiri West deposit with the ability to introduce higher grade oxide ore into the CIL feed in the second half supporting higher grades and higher recovery rates for the CIL plant. We're looking to continue improving costs with optimization initiatives like solar power that should reduce power costs at the operation by approximately 20% and in-pit tailings in the Sabodala pit, which will help reduce both the land [ph] requirements for infrastructure, future capital associated with TSF construction plus reduced water return to the processing plants and ultimately reduce closure costs. And we expect these two initiatives to come into the plan in 2025. As we ramp up the BIOX plant, we're also looking at various optimization initiatives to ensure that we are generating the maximum return from the refractory ore that we're mining and processing. We've already added a pipeline to connect from the BIOX rotation circuit under flow through to the leach tanks in the CIL plant, so that as we advance through the transitional semi-refractory ore in the Massawa deposit, we're not only recovering the refractory gold through the BIOX plant, but we are also separating and recovering the semi-refractory ore that does not flow from the flotation underflow and diverting it to the CIL plant for processing. We've been very pleased with the additional assets recovered and look to increase this as we ramp up BIOX throughput. We're also looking to accelerate mining activities in the Massawa Central Zone pit to get to deeper elevations and gain access to more high-grade fresh ore, improve our orebody knowledge through targeted drilling and metallurgical test work in order to maximize the blend characteristics. With the volume of semi-refractory ore stockpile and remaining to be mined, we are planning to increase mill and flotation circuit throughput beyond the nameplate capacity in order to increase the production of concentrate for the BIOX circuit. We're very pleased to deliver first gold from the BIOX expansion in April and equally happy that the BIOX and neutralization circuits are performing well as we ramp up beyond 50% of nameplate capacity. There is still more work to be done to ramp up throughput and have all sections of the plant running smoothly though there are many positive signs as we continue to complete tasks identified through the commissioning process. Looking forward, the focus for the BIOX plant is on pre-stripping in the Massawa North Zone pit to provide another source of ore to blend with the Central Zone pit and on ramping up mill throughput to improve the outlook for this year and beyond. Moving on to slide 34. I want to quickly provide an update on the solar project, one of the key optimization initiatives for Sabodala-Massawa, which is expected to reduce both energy costs and emissions. We launched the construction of the 37-megawatt photovoltaic facility, and a 16-megawatt battery system in August last year for an initial capital cost of $55 million. We're making good progress with 50% of the initial capital now incurred. And as you can see on the slide, we've already installed the first few solar panels, which will continue through to the end of the year. We are on track to commission the solar plant in quarter one 2025. Moving on to the Houndé mine on slide 35. Houndé is on track to achieve its production and cost guidance for the year with performance strongly weighted towards the second half due to the mining sequence. Half one performance was also impacted by lower grid utilization, which had a negative impact on costs as well as the 11-day strike that occurred in the first quarter. During the first half, all mining activities were focused on the Kari West pit while stripping activities focused on the higher-grade Kari Pump and Vindaloo Main pits. During the second half, all mining activities will increase at the Kari Pump and Vindaloo Main pits, supporting higher average grades and production at lower cost. In addition, as Guy mentioned, we've seen significantly improved grid power availability so far in the third quarter with the addition of the wet season supporting increased hydroelectric capacity in the region, we do not expect further issues with grid availability. At Ity on slide 36, production increased in the second quarter due to higher average grades processed and higher recovery rates, partially offset by a slight decrease in tonnes of ore milled. All-in sustaining costs remained stable despite the impact of lower grid availability during the quarter due to increased volumes of gold sold. Given the strong first half performance largely due to higher grades mined and processed from the Ity and Bakatouo pits. It is on track to achieve production above the top of its guidance range with all-in sustaining costs within the range. Construction of the second TSF was successfully completed during the second quarter and deposition has now commenced on the new facility. The mineral side of construction is also progressing well. Turning to our Mana mine, on slide 37. The underground ramp-up has supported improved overall performance at the mine site. But during the quarter, production decreased as a result of lower tonnes milled and lower average grades processed as the focus was on increased development while access to stopes was improved. We will focus on improving costs in the second half, which were impacted by the decreased power availability during the first half as well as increased development during the period due to a loader getting stuck in a stope at Siou while performing remote loading, which took more than four weeks to get out during the second quarter and necessitated mining of a bypass drive which impacted stope production volume and grade. We have had no such events like this in the last six years of production at Siou. And importantly, the loader is now back in service. All-in sustaining cost increased, as mentioned, due to lower gold volumes sold and increased development costs as well as the increased reliance on self-generated power associated with the reduced availability on the national grid. We expect stronger production in the second half of 2024 as development activities in half one should enable us to access more stopes at the Wona underground deposit supplemented by consistent stope production from Siou. Mana is on track to achieve its full year 2024 production guidance at an all-in sustaining cost near the top end of the guidance range. Moving on to slide 38 and Lafigué. We were pleased to deliver first gold at Lafigué on the 28th of June. Not only did we construct Lafigué in less than two years but the first gold pour was delivered on budget and ahead of schedule. We are now deep into the ramp-up phase and it is going well with processing at up to 10,000 tonnes per day equivalent to 90% of nameplate. We expect to achieve commercial production in quarter three when we reach the nameplate capacity of four million tonnes per annum. Importantly, we've been really pleased with how smoothly the HPGR is running. Lafigué is on track to achieve its guidance this year, which is in line with the definitive feasibility study assumptions. I will now hand back to Ian.

Ian Cockerill: Thanks very much, Guy and Mark. So, despite a challenging H1, our operations remain on track to deliver production guidance for the 12th consecutive year, as Mark said previously, with costs expected to be near the top end of our guidance range. We've now delivered our two growth projects ahead of schedule and are in the process of ramping them up to support a stronger H2 performance. Beyond H2, these projects underpin our more diversified and high-quality portfolio. As we transition out of this phase of growth, our key capital allocation priorities are de-levering our balance sheet to prepare the business for the next phase of growth and delivering attractive shareholder returns. Our new shareholder returns program will do exactly that as we continue to increase our minimum dividend commitment while we remain committed to paying supplemental returns in the form of additional dividend and opportunistic share buybacks. Our very important and historically successful exploration program continues to generate value supporting our near-term outlook while providing long-term growth optionality and we will provide updates later in the year of the progress of the Assafou and some of our other cornerstone mines such as Ity. We're focused on safely delivering against our key objectives for the benefit of all of our stakeholders. We thank you for listening. And now I'll hand you back to the operator and open up for any Q&A. Thanks very much.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Ovais Habib from Scotiabank (TSX:BNS). Please go ahead, your line is open.

Ovais Habib: Hi, Ian and Endeavour team. Glad to hear that both growth projects are on track. But really sad to hear Mark and Jono are leaving the company. A couple of questions from me. Number one in regards to the ramp-ups are you at all worried that the ramp-ups at Sabodala and Lafigue are both taking place in Q3 when it's typically the rainy season at that time?

Ian Cockerill: Look it's a great question. There's no doubt that traditionally that's been a trickier time. I think first and foremost let's talk about Lafigue. Lafigue has close to two million tonnes of material raw material sitting literally directly ahead of the plant. So, as the plant was being constructed we were producing. So, we've got material literally in a loaders distance from the plant. So, even if it rains and we can't get into the pits, we've got more than enough material available to go into the plant. At Sabodala, it's a much drier environment at Sabodala. So, I'm not unduly worried about that. More if I have any concern at Sabodala, it's making sure that we have adequate access to the fresh ore. I mean there's no doubt that we have been delayed in getting into Kiesta. We had a court ruling for the eviction of the artisanal miners. But we were prevented from the enforcing the eviction order by the authorities. Wait until after the election and then and then and then that's taken much longer than they should have done and it's not helped us. But I'm pleased to say that that eviction has taken place. It took place without any incident. The artisanals moved off site and we're busy preparing Kiesta for buildup on production. So there's always a risk in quarter three, but I don't think it's going to be too much of a problem for us in those two cases. Mark, I don't know if you want to add anything to that? Okay.

Ovais Habib: Thanks for that Ian and I appreciate the color. Just moving on then regarding on the exploration side Tanda-Iguela. You've mentioned that you've identified now the Pala Trend 3 and discovered the Koume-Nangare targets as well. Now, they're both in close proximity to Assafou. And now will these targets be included in the Assafou PFS that's expected in Q4? Or will this be additional to that when you release the PFS?

Ian Cockerill: Yes, another very good question. I mean the Assafou deposit in and of itself is more than big enough to run a PFS. What the Pala Trend and the other deposit Koume-Nangare, what that does it certainly adds extra -- it's a real Hollywood problem, because it adds extra optionality, but it will not be included in the PFS, because it's not fully defined as yet. But certainly, the initial work that has been undertaken there, tells us that the our initial optimistic outlook for these little what I would all call satellite ore bodies, appears to be justified, but it would form part of a later additional optionality to the PFS. But the PFS will take place specifically on the Assafou deposit. Jono is with me. Jono, do you want to add anything else to that?

Jono Lawrence: No, Ian that's very clear. And they're early days of other one -- our most advanced is Pala Trend 3. But the aim is not to bring those into the PFS for this year, and was more looking further on. The PFS is focused on the Assafou main deposit.

Q – Ovais Habib: Perfect, thanks guys. And just last question on my end. Any additional new talks on Burkina Faso and/or Ivory Coast that are looking to change their mining codes and also -- and are these countries consulting with Endeavor on these potential changes?

Ian Cockerill: Yes. Look, I mean I think the proposed changes that have been put forward by -- I'm talking now specifically, with respect to Burkina Faso. There was a concern when they were first mooted earlier on this year. I mean I remember sitting with the Minister of Mines and saying, look, we respect the fact that as a government you have the right to lay down the rules of the game, that you want for investors. But please bear in mind, that people have invested in your country, on the basis of certain preexisting rules of the game. So if you're going to change the mining code, we would strongly -- not insist, we strongly hope that you would respect existing conventions. And at the time, the proposed changes that they ventilated earlier on in the year was somewhat sort of ambiguous or silent on that point. What has come out subsequently, is that they want to implement the changes -- in fairness those changes really are just putting Burkina Faso almost in line, with the rest of West Africa in terms of royalties, ownerships, investment into local projects and god knows what. But more importantly, they confirmed that existing conventions would be respected. So for us at Mana, that means that Mana will operate under existing agreement until the end of 2027 and Houndé under its existing agreement until the end of 2029.

Q – Ovais Habib: Perfect. Thanks for that Ian. And thanks for taking my questions. And best of all -- best of luck to both Jono and Mark. Thanks.

Operator: Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Raj Ray from BMO (TSX:BMO). Please go ahead. Your line is open.

Q – Raj Ray: Thank you, operator. Good afternoon, Ian and team. My first question is a little more visibility on the ramp-ups at Lafigué and Sabodala. And I think Mark had commented, but I didn't catch the figure. With respect to your nameplate capacity at Lafigué, what percentage of nameplate capacity are you currently at or consistently achieving at this point? And secondly on Sabodala-Massawa same thing what percentage of nameplate capacity are you currently at? And then if I look at the recovery for Q2 Sabodala-Massawa BIOX circuit [ph] I do understand it's a commissioning period. But can you touch upon if you're seeing any issues, with the recovery and that pipeline rerouting you have done to recover some of the underflow was that a function of what you saw in terms of recovery from the mixing the sulfide on the transition in Q2?

Mark Morcombe: Yes, thanks. It's Mark. I'll take us through Lafigué first and then go on to Sabodala. So Lafigué is a it's a simple circuit and it's the first time we're using an HPGR but we've actually been very, very happy with how that's performing. And we're sort of at the point now where we're getting 10,000 tonnes a day, which is about 90% of the nameplate. So now it's a matter of just stabilizing that and then getting the CIL and the gravity circuit stable. So we're pretty happy with how Lafigue is progressing. At Sabodala, the BIOX circuit is a more complicated circuit. It does take longer to ramp up. We're sort of nominally at 50% there. The point made about the flotation underflow that was always going to be something that was part of the project. And it's for the transitional ore. There is more transitional ore in the pit that was initially envisaged. So we could see that as we were mining. And as part of the project, we started setting up the pipeline and getting everything ready so that we could bring the flotation underflow through to the CIL plant. This is something that you do see in other BIOX plants. I know certainly from experience out of [indiscernible] we had the same setup. So when you've got a semi refractory ore not all of it will float and go to the BIOX. If you just let the flotation tailings run to the TSF, you'd be putting a fair bit of gold in the TSF. So what we do is we run it to the leach tanks. It doesn't – it's already obviously been pre-crushed and ground. So that is not an issue. And then we can introduce it into the leach tanks at the CIL plan. We installed additional capacity there a few years ago as part of that Phase 1 expansion. So it's not upsetting or impacting the CIL plant performance at all or the throughput or anything like that, which is good. And so now we're getting sort of comfortable with the way that it operates and understanding the – what we need to do just to make sure that we balance the PH and the density control and so forth. But certainly the early days are very encouraging in that respect.

Raj Ray: And Mark, as a follow-up to that, so we are end of July now. Are you seeing an increasing trend in recovery? And then also any issues in the BIOX with respect to controlling any of the antimony or arsenic and also any temperature issues, given we are operating in a hotpot environment?

Mark Morcombe: So if we talk about the antimony and arsenic and so forth obviously, that is something that we would do through blending. The bulk of the antimony issues that we will see will come more once we get into the North zone and that's obviously all about blending. So it's less of an issue today. You mentioned about the temperature the – it's an exostemic reaction. So it probably doesn't matter whether it's minus 30 degrees or plus 30 degrees both are going to heat up naturally. So it's all about the cooling capacity that you have for them and that aspect is running well. We've been very happy with the way that the BIOX circuit is run in general. And then following that you've got the countercurrent detoxification and the neutralization circuit and that whole part of it is running very nicely.

Ian Cockerill: I think Raj, Mark is exactly right. That – the second part of the BIOX plant is the complex plant – the complex part of the plant. And the one where potentially the most risk. What we're seeing is that the recovery of gold from the sulfide concentrate is absolutely coming out at spec. We're getting more than 90% recovery. So the complicated side of the plant is working really well. Where we have the current issue is in the flotation side, where we're not getting the mass pull of sulfide because we have insufficient real fresh ore and we're getting this sort of interference from the transitional ore. And Mark and team have put in place that initiative to instead of taking that flotation underflow straight to tailings putting it through the original oxide plant. And we are seeing a modest increase in recovery. So that little should we call it sort of bypass processing does seem to be working and paying dividends.

Raj Ray: Okay. That's great. And go ahead.

Mark Morcombe: I was just going to say one other point about the BIOX plant is when we talk about throughput, the throughput that matters is the concentrate generation from the flotation circuit, not necessarily what comes in the front end. So, we are looking to increase the front-end production or capacity, so that we can generate the right quantum of throughput from the flotation circuit.

Raj Ray: Okay. That's great. Thank you. And then one last question for Ian. On your new dividend policy I mean, the supplemental dividends or share buyback that you have talked about, obviously it's gold price dependent, as well as we said maintaining a healthy leverage at 0.81 right now. Like through the cycle, what kind of leverage are you comfortable with?

Ian Cockerill: Look, if you look back from when we started this program, when we started the dividend program, we had a leverage -- it was almost three times. And then we bought it right down once Ity and Hounde started to ramp up. And then went positive ahead of going into the build phase for Sabodala and Lafigue. We're at 0.8. We thought actually we were going to be slightly higher on leverage at the end of Q2 than we are. Obviously, we've been helped by the gold price somewhat. But certainly, it's always been our desire to be at or around 0.5% through the cycle, but it will fluctuate from time to time. So if there was a magic formula that said, if this and this and this, then we're going to be paying out that. We look at all sorts of parameters when it comes to the supplemental dividends. I think to put in perspective, we're saying that for this year, we're going to be paying out $210 million. Last year, the guaranteed minimum was $175 million. We've paid out a total of $266 million in 2023 which is the supplementals and the buybacks on top of the guarantee. And we still want to do that. But at the time that we work on our dividends, we'll look at all the things that we need to do. We look at our current performance. We look at the state of our balance sheet. We look at capital requirements. Importantly, all decisions that we make around dividends will be recognizing that shareholders deserve to be paid something today, but not at the detriment of the long-term sustainability of the business. So it's up to us to try and get that balance. And it's difficult to say, what that's going to be. And that's why we've couched our policy in the terms of there's a guarantee which is a healthy increase from what it was before. And we're still committed to supplemental and to buybacks as and when the opportunity arises. And that's the way that we framed the new policy.

Raj Ray: Okay. That’s great Ian. Thank you very much.

Operator: Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Wayne Lam from RBC (TSX:RY). Please go ahead. Your line is open.

Wayne Lam: Good morning guys. Maybe just on Sabodala, on the increased proportion of ore from the main Sabodala pit the past couple of quarters, understanding that you're doing the stripping for future tailings, but just wondering if that's also been driven by the lower amount of available oxide or transition ore for Massawa? And then just want to clarify on the comment on a potential throughput expansion. Was that on the CIL or the BIOX? And is the semi-refractory material still planned to go through the CIL going forward?

Mark Morcombe: Hi Wayne, it's Mark. Thanks for the question. The Sabodala pit mining is something that we actually started in 2021. And the reason for that was firstly, it was a decent higher-grade ore source for the CIL plant. And secondly, we did recognize back then we had two choices. We could either build a second TSF. And the first TSF at Sabodala is an upstream raise. And we don't want to continue doing upstream raise TSFs. And if you convert that to a downstream raise fully lined, you're talking about by the time you finish all the wall raises, you're talking $70 million to $80 million of capital plus a massive land take. And we believe firmly that when you look at the geotechnical characteristics of the Sabodala pit and the proximity to the processing plant, it was ideal to do in-pit. So a significant saving on capital costs, lots of benefits in terms of reduced operating cost and also water return, and then ultimately reduce closure costs. And it was always going to be a long-term proposition to A, mine and B, get it ready. So that was always part of the plan. And we had less ore unfortunately as we were going through the bottom end of the pit than what was in the plan and that's what's necessitated some of the short-term changes if you like. And as was mentioned, we are moving into the Kiesta C pit, which we've started the waste stripping in and we've got the grade control drilling underway and so forth. So that will come into the feed in the second half of the year. The expansion that was mentioned or the throughput increase that was mentioned I should say is not the CIL plant. It's to do with the BIOX plant. And it's basically putting as much ore through the front end of the plant as possible through the crushing and the grinding circuit, because as mentioned, the limitation in the plant is the amount of mass pull that you get through the float circuit. And so with the transitional ore that we're talking about, the mass pull will be lower because some of it won't float and that will go through to the CIL plant. The remainder of that floats go through the BIOX plan. And hence by putting a greater volume into the float circuit, we can get that nameplate BIOX feed capacity that we're talking about. When we talk about the -- what transitional goes to which plant, we'll do test work based on sulfide/sulfur ratio in particular to determine if it's -- if we think that the recovery is acceptable, we will put it through the CIL plan. If we think it's unacceptable then we'll put it through the BIOX plan. So there will be anything above say 75% will go through to the CIL plant. And below that we would put it through to the BIOX plant. And so that's -- now that we've got everything set up, we can accommodate all of the transitional ore that we're mining.

Wayne Lam: Okay, great. Thanks for that color. And then maybe just following-up on the in-pit tailings when in 2025, is that expected to be completed in terms of the depletion of the pit? And then do you have the permitting for the in-pit tailings deposition? Or what are the contingency plans if that doesn't come into place?

Mark Morcombe: That's a very good question. Thanks Wayne. So it's due to come in, in the second quarter with mining to be completed in the first quarter next year. We have all of the approvals that we require to date. There's one final piece and that is a -- what we call a stakeholder engagement that needs to be done where we basically communicate with the local community and take them through all of this and then get the final -- I guess it's like the final check if you like. It's just the way that the processes work and quite rightly. If on the incredible remote chance that didn't come, we can always do additional raises on TSF-1. As mentioned, it's an upstream raise dam but it's actually a very, very large footprint dam and it's a very well-managed facility. It's something that we would prefer not to do. We would ultimately like to just run with the one TSF and to be able to close that and to be able to rehabilitate that facility. But it is always a back up plan.

Wayne Lam: Okay, great. Thanks. And then maybe just last question on the ramp-up of the BIOX plant. Mark, obviously, you've been key to the build and the ramp-up given your past experience at Obuasi. Maybe a broader question, but just curious about the decision to kind of split the COO role now? And what's the kind of remaining in-house experience with refractory processing as the BIOX now moves through the ramp-up period?

Mark Morcombe: So Wayne, just one thing I guess I've been involved with Obuasi and here, but I'm not on the ground. We've got very, very good people on the ground who've got an extensive amount of experience who is doing the work and very, very comfortable with what I'm seeing there. And then we've got some good support. We've got some -- a consultant who's actually worked on every single BIOX plant that's ever been built who's with us as well. And so we've definitely got some good capacity there.

Wayne Lam: Okay. Got it. All right. Yeah. Thanks for taking my questions. Mark best of luck and hope you get some time off after a number of successful builds.

Operator: Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Carey MacRury from Canaccord Genuity (TSX:CF). Please go ahead. Your line is open.

Carey MacRury: Hey. Good afternoon, guys. Maybe just on the de-leveraging, is there a specific target we should think about in terms of how much debt repayment you could make in the second half assuming gold prices stay kind of where they are?

Guy Young: Hi, Carey. It's Guy here. Thanks for that. We -- what we're ultimately looking to do is to try and ensure that we are as de-levered as possible ahead of what would be the next phase of build, right? So if I look to a more formalized balance sheet target, I think we should probably be talking at the end of 2025 at which point we'd like to be as close to completely de-levered as possible. What remains to be done in the second half of this year, clearly going to be dependent both in terms of ounces and gold price. But we should be able to see a fairly significant repayment of the RCF between now and then just bearing in mind what I referenced during the slides which is we do also have a call on cash in terms of the prepaid which we need to settle in Q4. So on a net basis, we should be seeing our RCF coming down by a couple of hundred million.

Carey MacRury: And our share -- is debt reduction more of a priority than share buybacks? Or should we kind of expect a mix of those going forward?

Guy Young: I think we would probably come up with a hybrid solution. So if you ask me personally, I'd like to pay back debt as fast as possible I don't like the cost. But clearly, when we talk about overall shareholder returns, we would be looking at capital allocation along with our existing policy. So of course, we would consider it. I don't believe we're at such a level of leverage that we can't afford an inverted-commerce to be making opportunistic buybacks which is kind of what Ian was referring to. We do formally commit to our dividend payments and then we'll be looking to both supplemental and opportunistic buybacks. And I don't think that's necessarily going to be an or statement in the second half.

Carey MacRury: Okay. Great. And maybe one last one if I can. It looks like your production guidance is kind of 40%/60% H1 versus H2. Just wondering if you can give us a bit of color on sort of the H2 split. I know I think you guys are still Q4 weighted. So just maybe high level what we can expect Q3 versus Q4?

Mark Morcombe: Yeah. So we're definitely going to have higher production in Q4, as we go through the ramp-up of the two plants in Q3. So we can expect a delta between the two of -- sort of in the range of I'd say 50,000 ounces but we're certainly ramping.

Carey MacRury: To 50,000 higher in Q4 versus Q3?

Mark Morcombe: Yeah, that's correct.

Carey MacRury: Okay. All right. Very thanks.

Operator: Thank you. We will now take our next question. Our next question comes from the line of Richard Hatch of Berenberg. Please go ahead. Your line is open.

Richard Hatch: Thanks. Yeah. Thanks for the call much appreciated. Just a few questions please. Firstly, Guy, just on that de-leveraging point, how much sort of de-leveraging should we be expecting going into Q3? I think a lot of investors that I would speak to have been focusing on that free cash flow generation the de-leveraging. And I'd just be interested to hear if all holds equal gold price holds equal what kind of deleveraging should we expect? And with that is there -- did I read into your comments correctly that perhaps some of that working capital release that you saw in the second quarter comes back and there's a bit of a headwind into the third and same goes for tax. What's the kind of steer on cash tax as we go into Q3/Q4, because I think that one sort of can surprise us to the downside just depending on how much withholding tax you pay? That's the first one. Thanks.

Ian Cockerill: Thanks, Richard. Yes, I think you've touched on probably all of the key aspects that we're trying to consider. If I start with our favorite which is tax. We've got in -- as I think everyone's mentioned in their notes on this already, the higher tax in the first half is predominantly due to withholding tax that is frankly slightly earlier in the year than you would have seen in prior years. And that's essentially us trying to ensure that we had everything ready in anticipation to make sure that we got the funds repatriated as soon as possible. So, arguably withholding tax is not going to be as high in the second half. But you correctly point out, we are going to have some CIT payments coming through in the second half, which is a significant - it's a significant bill that we're going to need to consider from a cash perspective. Clearly, we've got both dividends and then arguably supplementals to be considering in the second half. At the moment, the other thing that I'm just wanting to ensure that we've got a reasonable grip on is the growth capital that remains outstanding. So you would have seen from the balance sheet, and our words on growth capital, there are going to be still some cash outflows associated with our growth CapEx. And then last but not least, I do have to keep repeating just to make sure everyone is on the same page. But we do have the $150 million settlement requirement in Q4. So when we add all that together given our -- what we're anticipating in terms of cash generation in the second half, I could certainly see our leverage coming down, and I'd like to see it coming down from its sort of current levels. We just talked about numbers of 0.8 much closer towards 0.5. But the exact quantum, I'm afraid I'm just going to have to be judged as we see both production cash flows and where some of those liabilities and payments of liabilities come up in the second half.

Richard Hatch: Okay. Thanks. That's really helpful. Second one just on Sabodala-Massawa. I mean first half clearly challenging 105,000 ounces and you flagged that you're going to be below the low end. I wonder if -- and above the top end on the cost. I wonder if I could just push you a bit harder just to see if you can quantify what kind of quantum of below the low end is that going to be? Are we talking kind of $250 million-$275 million or a little bit better than that? And the same gauge for the cost? Are we are you in a position to kind of help us to try and get a steer as to where the costs sort of shake out for the full year please?

Mark Morcombe: Thanks. I'll answer that. I will leave a lot of the sort of the granularity on this discussion to Jack, but not on this call. I'm sure that you can continue to press him outside of this meeting. We are doing what we can to optimize the production and get as close as possible to the lower end of guidance. We do have a number of initiatives that have been identified that we've been working on for some time. We mentioned Kiesta. We've also got the Niakafiri West pit, which we are doing -- we're receiving a model on that shortly. And so there are a number of initiatives where we can increase the production from the CIL plant. Equally, we're ramping up the BIOX plant. It is early days and we will continue to push and to continue to push the throughput with the aim to getting the BIOX concentrate volume to the nameplate levels, which -- all of which will help to get us towards the lower end of production guidance. Running in parallel with that. Obviously, we've got the other assets which we are pushing to offset to some extent Sabodala including Ity which is performing very, very nicely and is above the top end of the guidance range.

Richard Hatch: Okay. Understood. Okay, thank you. And then -- I mean we haven't really spoken too much about the Lillian situation. I appreciate it's in kind of arbitration at the moment. Is it prudent to kind of not assume that that money gets paid this year? I'm just sort of -- that also could be quite helpful to your leverage position and our your balance sheet and such like. So you got anything potentially to add on that scenario just to so we can just kind of think about how that cash gets received as and when it does?

Ian Cockerill: Richard, I think, it's exactly right to be prudent and assume no inflow. That doesn't mean to say that that's the likely outcome. But from a modeling and a scenario perspective I certainly always like to follow a policy of understate your revenue and overstate your costs. We are not certain when there will be a final resolution on that. It is going through the whole sort of legal process. And unfortunately that is very much out of our hands. But my sense is that we are closer to a conclusion on this unfortunate issue than we have been for a long, long time. But I don't want to be should we call it either over optimistic or overly negative about where we're going to land up. But we will come to a resolution. It's in everyone's interest to get there sooner rather than later and I'm confident that we will.

Richard Hatch: Okay. Understood. Thank you very much, Ian. And the last one is just a few investors have sort of expressed surprise on Mark and Jono's departure this morning people have been with the business for some time completely get it people leave after a period of time. Is this just simply a case of you hit some pretty significant milestones mark and now it's time to move on. Or can you just perhaps give the market just a bit more color on your thoughts would be helpful? Thanks.

Mark Morcombe: Okay. Look thanks. It is a good question. And last year in January we were having a management break away. And as part of that the CEO, asked for the time. So he's committed for the next five years for Endeavour. And I think, I thought about it for a while and I thought and I didn't actually put my hand up I felt by May this year it's five years for me and I was sort of really just setting my sights to get through five years it would be at the point where we have got the two new projects through construction and the ramp-up happening. So I'll be finishing at the end of quarter three. If you look at slide 10 the robust financial position evolution of leverage. You could also call that evolution or life cycle of a COO because it's basically the tenure of time that I've been in Endeavour. I joined two days prior to the official opening of the Ity CIL. And I think it's been quite a journey if you look at what we've achieved through that time. And it's -- now that we've got these two projects built and the ramp-up is happening. We've got very, very good people on the ground. We've got very, very good teams supporting them in the regional and corporate offices. And I certainly wish Djaria and Martin all the best. And obviously to Jono too who is going to be hanging around a little bit longer. But yes I hope that sort of gives a little bit of color.

Richard Hatch: It does. Thank you very much. And yes, thanks for everything and well done for building a good team around. And thanks Ian and the team for the time and for the questions.

Ian Cockerill: Richard if I could just add something to that. I mean I don't know how many people on this call have actually been in a similar position to what Mark has been in as a COO of a really sort of high stressed situation. It's punishing on individuals. And you get to a point where you think okay there's a natural cycle as Mark has said. It's important to take a break. Otherwise, you get complete and utter burn out, and you don't want anyone to do that. There's absolutely no doubt that, Mark has played a key role in helping this company get to where it is now. And we're looking to the future. And I salute Mark to saying that this is a natural sort of break. It's the start of a new process -- it's looking to the future. It's even the same with Jono. I mean, Jono has been with the group even longer than Mark. He's been very instrumental in many of the projects that we've currently built. Jono and his teams were part of finding those. Jono said that, he started his program of getting his non-exec directors ticket through the Australian side of things and that's where he wants to go. And I respect that. And the challenge for us is to make sure that the team going forward is as good hopefully even better than what we've had. And I'm confident that, we have a good team. We've got a great balance of skills experience. It's -- it's a strong team. I don't think any investor should feel unduly concerned that, there will be a deterioration in standard in this company. And this company and the team that's left is absolutely focused on making sure that, we deliver the best for everyone. And I would certainly like, again, publicly to thank both Mark and Jono for their complete amount of professionalism in their careers with us. And I along with everyone else in the company wishes them well.

Richard Hatch: Thanks. That's very helpful color. Thank you so much.

Operator: Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Don DeMarco of National Bank Financial. Please go ahead. Your line is open.

Don DeMarco: Thank you operator, and hello, Ian and team. First of all, congratulations on the strong quarter at ET. But to my first question maybe I'll just continue on the thread of the last question. And Ian thank you for all of that color. We see that the management changes include the departure of Jono as EVP Exploration and this follows other exploration staff departures Patrick Silvie and so on, planned or otherwise. So what are your plans to backfill this vertical? And do you have sufficient exploration bench strength as you do with operations in Djaria and Martin or will you be looking outside the company?

Ian Cockerill: Look first and foremost Patrick's not left. Patrick got elevated to the esteemed heights of being a non-exec. And trust me he's more than capable of interfering as a non-exec sort of helping guide us. So we certainly have not lost Patrick. One thing, I think it's fair to say is, that the processes and the approach to exploration that Patrick brought to Endeavor have been remarkably successful. And I would remind people that, when Patrick joined the group everyone was very, very suspicious. There's a guy coming from the oil and gas sector what the hell does he know about gold mining in West Africa. And completely transformed, reenergized the whole exploration program. And to date, we've produced over 19 million ounces in the last seven or eight years at under $25 an ounce. That's a credit to what he did. He's still around. There was a natural progression coming through with Jono, Jono's moving on. Yes, Silvia left. Silvia was with us for 11 years. And she decided that, she wanted to do something a little bit different. People get stale in jobs after a time. So we have made an offer to Jono's replacement. That individual has accepted, has signed the contract is currently still employed by their existing employer and their existing employer has requested that we don't make public, who they are. But when the individual is named, I think people will be comforted that this is someone who's got a good track record, good experience. And it is exactly the right sort of individual to lead us into the future. You're exactly right, Don. Exploration is one of the -- its part of the USP of Endeavor. And one of the key characteristics that we look for, in sort of the replacement head of exploration was someone who actually understood that. And I'm comfortable, that this individual will bring exactly the right sort of approach and style and enthusiasm and energy to exploration. I'm very comfortable that we're going to be in good hands.

Don DeMarco: Okay. Thank you. Well, certainly we can take a lot of reassurance from that. To my next question, could you comment on the pecking order in your development pipeline after Tanda-Iguela. You got good opportunities in Burkina, but I'm wondering if you'll be prioritizing based on jurisdictional preferences?

Ian Cockerill: Yeah. It's a great question. First and foremost, if you're sort of a proper purist when it comes to capital allocation, you make sure that you look at your best opportunities. Then you actually have to look at all these, sort of the factors surrounding them which would be as you say the sociopolitical, economic, all those other things. And at the end of the day, money is a coward. Money goes where it feels, it's safest; where it's been most protected and where it's most secure. So I am very comfortable with Assafou. We have other opportunities in the pipeline, spread across various parts of the -- of West Africa. We'll be talking a lot, in future about what we could --how we see things evolving at Ity. So there's no certainty as to what the -- I should call it the sequencing of future organic development is. We actually do have some good opportunities within this group. And at the end of the day, the single biggest factor is which optionality, do we have that gives us the maximum return in the shortest possible time. That really is the key driving factor. And Guy and I are very focused on sort of looking at all capital projects and making sure that we don't squander our money and we put it where it's going to give us a good blended optimal return.

Don DeMarco: Okay. So I think I heard you say Assafou might be at least at this point in time next in line after Tanda-Iguela?

Ian Cockerill: It's the obvious one. It's the obvious one. But there are other potential opportunities in-house. But it's too early to talk about those this year.

Don DeMarco: Okay. Thank you. Thanks again, that's all for me and good luck heading into the back-end loaded year.

Operator: Thank you. Our next question comes from the line of Lawson Winder of BofA Securities. Please go ahead, your line is open.

Lawson Winder: Yes. Thank you, operator and good afternoon gentlemen. There's not a lot of time here left in the allocated time for the call I don't think. But two things I wanted to touch on quickly. So, one power costs, so historically respectively they've been 62% and 72% in Ivory Coast and Burkina I think -- or 91% and I think you said they're now at 62% and 72%. Is that what we assume for the balance of the year? And by the way thank you for that guidance on how that impacts cash costs. Yes first question.

Ian Cockerill: Okay. I'm going to get Djaria to answer this because this is very much in Djaria's ballpark and it gives you a chance to listen to Djaria as well.

Djaria Traore: Okay. This is Djaria. So, if I understand correctly you were asking about the power costs in Burkina and Côte d'Ivoire. We haven't seen any changes currently in the cost. I think for the grid utilization in terms of our H2 forecast I think is about 62% and 72% respectively. So, we're not really expecting the actual to really differ from those numbers.

Lawson Winder: Okay. And -- yes okay. I'll just leave it there. Thanks very much for that answer. I apologize. I got to get to another call. Thank you very much.

Ian Cockerill: Lawson just perhaps to give it a little bit more flavor. I mean -- okay, well for other people's benefit. We had -- we were down at 20% power from the grid. So, we're going to go back to a more normalized situation at around about 60%. So, that's why there will be a fairly significant cost-saving in the second half of the year. And it's what really impacted us in quarter two. We did -- we originally were concerned that maybe power costs were going to be sorry grid power was not going to be available in Côte d'Ivoire for quite some time. But in fact it came back a lot quicker than we have been led to believe it would. But anyway it's now back to a slightly better position much more in line to what we've seen historically.

Lawson Winder: Okay. Thank you.

Operator: Thank you. There are no further questions. Speakers please continue.

Ian Cockerill: Okay. Thank you very much everybody. Thanks for some really good questions and we look forward to speaking to you again when we come out with quarter three. And I've got every confidence that we'll be reporting back on even better numbers in quarter three. Thanks very much. And for those of you who are going on holiday, enjoy your holidays and we'll talk again soon. Thanks very much and good bye.

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