Endeavour Mining plc (LSE:EDV) (TSX:EDV) (OTCQX:EDVMF) is pleased to announce that it has closed the sale of its 90% interest in its non-core Karma mine in Burkina Faso to Néré Mining for a total consideration of up to $25 million plus a 2.5% Net Smelter Return royalty.

Sébastien de Montessus, President and CEO of Endeavour, commented: “The sale of our non-core Karma mine to Néré Mining is in line with our strategy of actively managing our portfolio to focus management efforts on high margin, long-life and low all-in sustaining cost, core assets.

A key consideration in the sale process, was the selection of a party that will maintain our trusted partnerships in Burkina Faso, by committing to operate the mine in the best interest’s of our employees and local stakeholders. We are very pleased to sell Karma to Néré Mining as we have confidence that they can leverage their experience and knowledge gained from their local investments to maximise Karma’s future prospects.

We are very proud of what we have accomplished at Karma, in particular the growth and development of our local employees, who we wish to thank for their commitment, professionalism and contribution to Endeavour’s success over the past several years.”

TERMS OF THE AGREEMENT

Under the terms of the Agreement, the total consideration consists of the following:

• $10 million was received prior to closing, in the form of a reimbursement of historical shareholder loans
• A deferred cash payment of $5 million to be paid 6 months after closing
• A contingent payment of up to $10 million, payable 12 months after closing, based on a sliding scale, linked to the average spot gold price as follows:
  • Less than $1,700/oz – No Payment
  • $1,701 – $1,950/oz – US$5 million payment
  • $1,951 – $2,049/oz – US$8 million payment
  • Greater than $2,050/oz – US$10 million payment
• A 2.5% NSR royalty on all ounces produced in excess of 160koz of recovered gold from 1 January 2022

The transaction has been closed, with an effective date of 10 March 2022.

UPDATED GROUP GUIDANCE

Following the sale of the Karma mine, Endeavour has updated its production and all-in sustaining cost guidance for continuing operations to account for the removal of Karma’s guided production of 85 – 100koz at a AISC of $1,200 – 1,250/oz for 2022, with guidance for the other operations remaining unchanged. As shown in Table 1, 2022 production guidance for continuing operations has decreased from 1,400 – 1,500koz to 1,315 – 1,400koz, while AISC guidance from continuing operations has decreased by $10/oz to $880 – 930/oz.

Table 1: Consolidated Production Guidance for Continuing Operations

ABOUT NERE MINING

Néré Mining is a Burkina Faso based consortium led by Elie Ouedraogo (a board member of both Karma & Mana and a prominent Burkinabé business figure). Mr. Ouedraogo owns 29% of the share capital of Néré Mining, is the chairman of Riverstone Karma (the company that has the mining license for the Karma mine) and is a director of Semafo Burkina Faso (a subsidiary of Endeavour Mining plc and the company that has the mining license for the Endeavour Group’s Mana mine).

ABOUT KARMA

Located approximately 185 km northwest of Ouagadougou, the capital of Burkina Faso, the Karma mine is a low-grade heap leach operation consisting of several shallow, low strip ratio, free-dig open pit gold deposits. In 2017, an optimization project was completed to lift the stacking capacity. Ore is treated at a 5Mtpa heap leach facility. The first gold pour took place in April 2016 and commercial production was achieved in October 2016. Karma produced approximately 88,000 ounces of gold at an all-in sustaining cost of $1,195/oz in 2021. Endeavour owned a 90% stake in the Karma mine, with the remaining 10% owned by the State of Burkina Faso.

ADVISORS

Endeavour’s legal advisors for the transaction were Norton Rose Fulbright and Linklaters LLP. Raymond James Ltd acted as financial advisor.

QUALIFIED PERSONS

Clinton Bennett, Endeavour’s VP Metallurgy and Process Improvement – a Fellow of the Australasian Institute of Mining and Metallurgy, is a “Qualified Person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and has reviewed and approved the technical information in this news release.

ABOUT ENDEAVOUR MINING PLC

Endeavour is one of the world’s senior gold producers and the largest in West Africa, with operating assets across Senegal, Cote d’Ivoire and Burkina Faso and a strong portfolio of advanced development projects and exploration assets in the highly prospective Birimian Greenstone Belt across West Africa.

A member of the World Gold Council, Endeavour is committed to the principles of responsible mining and delivering sustainable value to its employees, stakeholders and the communities where it operates.