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Endeavour Mining's adjusted net earnings down 33% in 2022 on lower gold sales and higher costs

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(Kitco News) - Endeavour Mining (TSX: EDV) reported today that its FY-2022 production from continuing operations amounted to 1,400koz of gold (2021: 1,436koz), achieving the top end of the guided 1,315-1,400koz range.

The company said that FY-2022 production from continuing operations decreased by 36koz or 3% over FY-2021 due to lower production at Boungou, Mana and Wahgnion as a result of mining and processing of lower grade ore.

Endeavour added that 2022 all-in sustaining costs amounted to $928/oz (2021: $864/oz), achieving the guided $880-930/oz range "in spite of industry-wide inflationary pressures."

The company's revenue decreased by $134.0 million from $2,642.1 million in FY-2021 to $2,508.1 million in FY-2022 due to the lower gold sales compared to the prior period, which was partially offset by the higher realized gold price. Gold sales from continuing operations decreased from 1,478koz in FY-2021 to 1,393koz in FY-2022.

For FY-2022, the company said it recognized a net comprehensive loss from continuing operations of $31.0 million compared to net comprehensive earnings from continuing operations of $304.6 million in FY-2021, due primarily to an increase in the impairment expense and a decrease in earnings from mine operations due to lower gold ounces sold and higher costs in the year.

In FY-2022, adjusted net earnings attributable to shareholders for continuing operations decreased to $404.7 million (or $1.63 per share) from $605.2 million (or $2.52 per share) in FY-2021 due to lower gold production, higher operating expenses and higher taxes.

Importantly, as previously announced, Endeavour's FY-2022 dividend amounts to $200.0 million or approximately $0.81 per share, which represents $50.0 million or 33% more than the minimum dividend commitment for the year.

The company also reported that its proven and probable reserves amounted to 16.8Moz at year-end 2022, a decrease of 1.0Moz compared to the previous year as discoveries and resource conversion at Ity, Houndé and Lafigué did not fully offset depletion at Boungou, Mana, Sabodala-Massawa and Wahgnion. Measured and indicated resources amounted to 27.3Moz at year-end 2022, remained flat compared to the previous year.

Endeavour said that its production guidance for FY-2023 amounts to 1,325-1,425koz, which marks an increase over the FY-2022 guidance of 1,315-1,400koz, while group AISC is expected to remain consistent with that achieved over recent quarters at $940-995/oz. Group production is expected to be more heavily weighted towards H2-2023.

President and CEO Sebastien de Montessus commented, "2022 was another successful year for Endeavour during which we delivered on all our objectives and met guidance for a tenth consecutive year. Strong operating performance generated over $1.0 billion in operating cash flow which has allowed us to deliver significant value to all stakeholders while continuing to fund our organic growth and improving our balance sheet strength with more than $120 million of net cash at year end.

"We are also pleased to report that the Sabodala-Massawa expansion and the Lafigué greenfield build are progressing well with both projects on track for first production in 2024, with costs in line with expectations. Moreover, our exploration programme continues to provide a platform for future growth with the discovery of the promising Tanda-Iguela deposit in Cote d'Ivoire, which has the potential to become another cornerstone asset for the Company."

He added, "We have entered 2023 with considerable momentum and we look forward to continuing to deliver against our strategic objectives for the benefit of all our stakeholders."

Endeavour Mining 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 portfolio of advanced development projects and exploration assets in the highly prospective Birimian Greenstone Belt across West Africa.

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