Endomines AB Q1-Q3 2019 Business Review - Focus on ongoing ramp-up of Friday mine and mill

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Endomines AB, Stock Exchange Release 7 November 2019 at 08:30 CET

Jan-Sep 2019 (Jan-Sep 2018)

Operational highlights

  • The operational focus was on the continued ore production at the Friday mine and ramp-up and optimisation of the processing plant
  • Mining has progressed well and a significant ore stockpile at the mine and the mill sites has been produced
  • No gold concentrate was sold in Q3 2019 from Friday, however gold recovered from the clean-up of the Pampalo mill generated some revenues during the reporting period
  • No injuries reported in Q3 2019, LTIFR 15 (9)

Financial highlights

  • Total revenue was 5.1 MSEK (97.4)
  • EBITDA was –33.7 MSEK (0.6)
  • Total cash flow was 42.9 MSEK (43.9)
  • Earnings per share was -0.84 SEK (-0.54)

Significant subsequent events
Endomines announced the appointment of Greg Smith as the CEO on November 6. Greg Smith has a broad background in energy, merchant banking and resource business from more than 30 years working in senior management and executive positions. He has extensive knowledge and experience of mine development in the US. Marcus Ahlström who has been acting as Endomines’ Interim CEO since May 3rd 2019, has been appointed Deputy CEO of Endomines. He will also continue as CFO of Endomines.

Production guidance for 2019:
On August 9 Endomines announced that the previous production estimate of 5,000-8,000oz gold in concentrate during 2019 will not be achieved. This was due to reparations of damages that the Friday tailings pond suffered during the 2019 winter/spring season, causing longer than expected delays to the production phase. Based on the commissioning of the plant, the results of the drilling campaign and test mining the production plan is currently being updated by the management team. Once completed, Endomines will release an updated production guidance for the Friday mine for year 2019.

The ramp-up of Friday mill is now ongoing. Once the mill is successfully commissioned and ramp-up completed Endomines will release an updated production guidance for the Friday mine.

Key figures (Consolidated) Jan-Sep
MSEK if not otherwise stated 2019 2018 +/-
Total income 5.1 97.4 -92.3
Cost -38.8 -96.8 58.0
EBITDA -33.7 0.6 -34.3
Depreciation and write-downs -5.0 -34.9 29.9
EBIT -38.7 -34.3 -4.4
Net result for the period -44.4 -19.5 -24.9
Earnings per share (SEK) -0.84 -0.54 -0.30
Cash flows from operating activities -69.7 -11.1 -58.6
Investments -45.3 -108.8 63.5
Financing 157.8 163.8 -6.0
Liquid assets at the end of the period 61.9 62.4 -0.5
Personnel at the end of the period 32 40 -8
LTIFR 15 9 6

LTIFR = The Lost Time Injury Frequency Rate is based on reported lost time injuries resulting in one day or more off work per 1,000,000 hours worked on a rolling 12-month basis. LTIFR has been calculated for the whole company including contractors.

Deputy CEO and CFO Marcus Ahlström: “During the third quarter Endomines successfully completed the rights issue raising approximately 156 million SEK corresponding to approximately 94,4 per cent of the offered shares, this shows strong support for Endomines growth story and enables to further develop our assets and successfully return back to being a gold producing company. I still would want to thank all our existing shareholders as well as the new ones who have embarked on the Endomines story and showed us support.

In the third quarter we were able to commence the ramp-up of the Friday mining and milling operations and the work is now fully ongoing. The ramp-up of the mine have progressed according to plan and should be reaching full forecasted production rates by the end of the year. Unfortunately, we had some issues when starting to commission the mill and because of that we were not able to start the gold concentrate production in the third quarter as previously planned. The work continues and the successful commission of the mill will take place during Q4.

We have continuously also strengthened our team in Idaho, and I am very pleased to welcome both our new mine manager Dave Bryan as well as mill manager Bill Dafoe, both of whom bring wealth of experience and in depth understanding to our production processes combined with strong commitment to successfully complete the ongoing ramp-up.”

For further information, please contact:

Marcus Ahlström, Deputy CEO and CFO, +358 50 544 68 14, marcus.ahlstrom@endomines.com

This information is information that Endomines AB is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication through the contact person set out above at 08:30 CET on 7 November 2019.
Endomines is a mining and exploration company with its primary focus on gold. The Company explores for gold along the Karelian Gold Line in Eastern Finland and develops mining operations in Idaho, USA. Endomines aims to improve its long-term growth prospects by increasing its exploration activities and through acquisitions. Endomines aims to acquire deposits that are situated in stable jurisdictions and can be brought to production rapidly with limited investments.

The shares trade on Nasdaq Stockholm (ENDO) and Nasdaq Helsinki (ENDOM).