19.8.2021

ENDOMINES Half-year interim report 2021 Restart of the Friday Mine in Idaho – USA and Pampalo Mine - Finland

The full report (PDF) Press release (PDF)
Endomines AB, Stock Exchange Release 19 August 2021 at 09:00 CEST

H1 2021 (vs. H1 2020)

Operational highlights

  • Endomines ends the Care and Maintenance phase at the Friday Mine in Idaho, USA by upgrading the Orogrande Processing facility and continuing development work at the mine.
  • Endomines prepares for the restart of its Pampalo Mine, Finland in 2022 with the decline development progressing at a rate of 80m per month from the 775m RL and infill drilling for grade control purposes down to the 805m RL.
  • Endomines signs a merger plan and decides on the re-domiciliation of the company from Sweden to Finland.
  • Endomines started to prepare a scoping study and a drilling program for its Montana gold assets, US Grant and Kearsarge Gold Projects. 
  • No injuries reported in the last 12 months; LTIFR 0 (0)

Financial highlights

  • Total revenue was 0.1 MSEK (10.5)
  • EBITDA was -40.3 MSEK (-45.3)
  • Total cash flow was 16.1 MSEK (-12.3)
  • Earnings per share was -0.59 SEK (-0.61)

Significant subsequent events

  • On July 2, 2021, Endomines Finland Plc announces entering into a comprehensive financing package with a group of Finnish investors for an aggregated amount of EUR 5 million.
  • On July 19, 2021, Endomines announced the resolutions from the EGM which approved the merger plan between Endomines AB (publ) and Endomines Finland Oyj.
  • On July 20, 2021, Endomines announced that its Interim CEO and CFO Marcus Ahlström have resigned. The Board started the search for a new permanent CEO and is anticipating being able to have that search completed in the fall 2021. 
  • On August 12, 2021, Endomines announced new and very encouraging drill results from Pampalo Deep Project.
  • On August 16, 2021, Endomines announces that ore mining begins at Endomines’ Friday Mine in Idaho, USA and gold production starts in the end of August.

Outlook
During Q3 2021 gold production will restart at the Orogrande Processing facility after a stop of 12 months. Restaffing at both mine and the mill has taken slightly longer than expected due to market conditions caused by COVID-19. Also, delivery of some vital mill equipment and components have been delayed due to longer than expected lead-times. This combined has caused a slight delay to the mill start-up from July to late August. The Pampalo project is moving ahead according to plan and is now expected to start ramping-up to full production earlier than planned, at the beginning of Q1/2022 instead of previously planned Q2/2022.  This will, however, postpone the development ore production to Q1/2022 instead of end of Q4/2021 as earlier announced. 

As a result of these changes, the gold production guidance for the remainder of the year is now expected to be approx. 1,500 oz. The new revised production guidance is primarily due to the strategic decision to postpone the processing of the Pampalo development ore to Q1/2022 to be able to start full gold production sooner than what was earlier planned. These changes will strengthen the company’s 2022 cashflow and give stability to both the USA and Finnish Assets. 

Endomines updates on mid-term goal
The board of Endomines has updated the mid-term goal for the Friday and Pampalo assets:

Friday: When in full production Endomines expects the annual gold production from the Friday mine to reach 7,800-9,000 oz. Full production estimated by Q4 2021/Q1 2022.

Pampalo: When in full production Endomines expects the annual gold production from the Pampalo mine to reach 10,000-11,500 oz. Full production estimated by Q2/Q3 2022.
 

Key figures (Consolidated) Jan-Jun
MSEK if not otherwise stated 2021 2020 +/-
Total revenue 0.1 10.5 -10.4
Cost -40.4 -55.8 15.4
EBITDA -40.3 -45.3 5.0
Depreciation and write-downs -55.2 -11.7 -43.5
EBIT -95.5 -56.9 -38.6
Net result for the period -120.8 -68.0 -52.8
Earnings per share (SEK) -0.59 -0.61 0.02
Cash flow from operating activities -84.1 -59.5 -24.6
Cash flow from investing activities -15.5 -18.6 3.1
Cash flow from financing activities 116.1 65.9 50.2
Liquid assets at the end of the period  28.0 3.4 24.6
Personnel at the end of the period 43 48 -5
LTIFR 0 0 0

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.

Marcus Ahlström, interim CEO and CFO: “During the second quarter Endomines further strengthened its financial position by entering into a comprehensive financing package with LDA Capital for an aggregated amount of EUR 14 million and issued 14 million Warrants. This additional financing arrangement is instrumental for Endomines to continue its path to bringing both Friday and Pampalo mine projects into production and developing its other mine projects in the US.

We have spent one million USD on upgrading the Orogrande Processing facility at the Friday Mine in Idaho, including a new low-cost low-tech solution to tailings dewatering which is scalable for future production needs.

We have also put a greater emphasis on increasing the plant’s instrumentation to
manage our processes better. The production capacity of the mine has been enhanced with the purchase of a new mining fleet, and underground services upgrades to allow deeper ore developments.

We have begun the process of developing an exploration surface drilling program for our Montana gold assets thus allowing us to better understand on how to unlock the potential of these resources.

The
Montana gold assets form a major part of our strategic development going forward, allowing us to become a mid-tier gold mining company. 

The restart and development of our Pampalo mine operation in Finland at the Karelian Gold Line started in April 2021 and is well on target for a production start during the first quarter 2022. We are very excited about bringing our Pampalo mine back into production supported by the currently high gold market price and encouraging results from the first results of our drilling program at the mine.

The re-domicile process of moving the company from Sweden to Finland through a down-stream merger continued throughout Q2 2021 and all necessary steps and requirements were carried out and finalised. The process is still ongoing but is moving ahead according to plan and we anticipate concluding the merger by the beginning of Q4 2021.

Our full focus is now on enabling a successful start-up of the operations both at Friday and the Pampalo mining project. I would like to thank very much for the hard work and strong work ethic that our entire staff have shown this year.”

For further information, please contact:

Marcus Ahlström, Interim 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. The information was submitted for publication, through the agency of the contact persons set out above, at 09:00 CEST on 19 August 2021.

About Endomines
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 and Finland. 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).