Positive EBITDA year-to-date driven by solid production

THIRD QUARTER Q3-2017 (vs Q3-2016)

  • Gold production was 94.1 kg (83.0)
  • Milled ore was 37,422 tonnes (36,104) at head grade of 3.0 g/t (2.7)
  • Cash Cost was 1,081 USD/oz (1,113)
  • Revenue was 27.6 MSEK (27.4)
  • EBITDA was 1.1 MSEK (1.3)  
  • Total cash flow was 1.6 (-7.4)
  • Profit after tax was -8.3 MSEK (-12.3)
  • Earnings per share was -0.79 SEK (-1.17)

JANUARY-SEPTEMBER YTD-2017 (vs YTD-2016)

  • Gold production was 299.4 kg (215.2), +39 per cent, with the increase driven by higher gold grade, improved production efficiency and increased tonnage
  • Milled ore was 125,847 tonnes (108,724) at head grade of 2.8 g/t (2.4)
  • Cash Cost was 1,136 USD/oz (1,265)
  • Revenue was 91.1 MSEK (64.5), +41 per cent
  • EBITDA was positive and amounted to 0.2 MSEK (-9.3)
  • Total cash flow was -15.5 MSEK (25.9)
  • Profit after tax was -30.3 MSEK (-40.6)
  • Earnings per share was -2.89 SEK (-4.12)

SIGNICANT SUBSEQUENT EVENTS  

  • Endomines has on 7 November 2017 received a waiver on its bank loans on expected breaches of loan covenants as of 31 December 2017
  • The Company announced on 26 October 2017 that it has appointed Marcus Ahlström as its new CFO as of January 2018

 
OUTLOOK FOR FULL YEAR 2017

The Company expects to produce between 350 and 400 kg gold from the Pampalo underground mine by continuing the selective mining strategy. 

Company strategy
In addition to investing in the Karelian Gold Line, Endomines is re-evaluating its strategy to increase its focus on mergers and acquisitions. The Company intends to broaden its asset base and build a longer-term growth platform by acquiring assets in stable jurisdictions, preferably with relatively short time to production and limited capital expenditure requirements. Endomines’ primary focus will remain on gold. The Board is currently evaluating certain options in line with this strategy, along with plans for the Company’s financing.

Key figures (Consolidated)

Jul-Sep Jan-Sep Full year
MSEK if not otherwise stated 2017 2016 +/- 2017 2016 +/- 2016
Revenue 27.6 27.4 0.2 91.1 64.5 26.6 102.1
Cost -26.6 -26.1 -0.5 -90.9 -73.9 -17.0 -109.8
EBITDA 1.1 1.3 -0.2 0.2 -9.3 9.5 -7.7
Depreciation and write-downs -7.7 -13.7 6.0 -27.1 -31.2 4.1 -95.4
EBIT -6.6 -12.4 5.8 -26.8 -40.6 13.8 -103.1
Net result for the period -8.3 -12.3 4.0 -30.3 -40.6 10.3 -125.0
Earnings per share (SEK) -0.79 -1.17 0.38 -2.89 -4.12 1.23 -12.49
Cash flows from operating activities 2.9 6.2 -3.3 -2.4 -9.2 6.8 -13.6
Investments -1.1 -12.6 11.5 -11.7 -28.7 17.0 -40.3
Financing -0.3 -1.0 0.7 -1.4 63.7 -65.1 62.8
Total cash flow 1.6 -7.4 9.0 -15.5 25.9 -41.3 9.0
Liquid assets at the end of the period 13.8 46.4 -32.6 13.8 46.4 -32.6 29.4
Personnel at the end of the period 41 43 -2 41 43 -2 44


Production figures Jul-Sep Jan-Sep Full year
2017 2016 +/- 2017 2016 +/- 2016
Milled ore (tonnes) 37,422 36,104 1,318 125,847 108,724 17,123 150,917
Head grade (Au gram/tonne) 3.0 2.7 0.3 2.8 2.4 0.4 2.6
Gold recovery (%) 83.8 85.3 -1.5 83.5 82.8 0.7 82.9
Hourly utilization (%) 34.2 34.0 0.2 39.6 35.7 3.9 37.6
Gold production (kg) 94.1 83.0 11.1 299.4 215.2 84.2 325.0
Gold production (oz) 3,025 2,667 358 9,626 6,918 2,708 10,449
LTIFR - - - 8 6 - 8
Average gold price (USD/oz) 1,288 1,335 -47 1,255 1,257 -2 0
Cash Cost (USD/oz 1,081 1,113 -32 1,136 1,263 -127 1,195

CEO Saila Miettinen-Lähde:
“We continued our solid operational performance in the third quarter, producing 94kg of gold. Having produced 299kg in the first nine months of the year, we are well on our way to meeting our increased production guidance of 350-400kg of gold for the full year 2017.
 

Our underground exploration drilling program in the deep extension of the Pampalo mine was completed during the third quarter. Drilling has confirmed the continuation of the mineralization of the Pampalo deposit, and preliminary results indicate there to be ore tonnage for approximately one additional year’s production within the next 100 vertical meters below the current production area. Financial analysis of the deep extension of the mine, including a necessary investment in decline, is in progress and will be completed by the year-end.

We have continued the planning for our regional exploration efforts in the Karelian Gold Line. A new exploration strategy was outlined in August, aiming at defining new targets through the creation and use of extensive three-dimensional models of the area. The models will utilize existing exploration data from several disciplines, including geochemical samples, diamond drilling and geophysics as well as structural observations and geological maps. Furthermore, new data from modern methods, such as infrared scanning of drill cores, will be added over time to enhance the quality of the models. We are excited about the new insights we are getting through this work and view the prospects along the Karelian Gold Line very positively.”

Full quarterly report    
The full quarterly report is attached to this press release as well as available on the Company´s website, www.endomines.com .

Financial calendar
The year-end bulletin will be published on Thursday 15 February, 2018.
 
Contact person
Saila Miettinen-Lähde, CEO, +358 40 548 36 95, saila.miettinen-lahde(at)endomines.com

This press release is a translation from the Swedish original which was published on 9 November 2017. In the event of difference between the English translation and the Swedish original, the Swedish interim report shall prevail.

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 08:45 CEST on 9 November 2017.

About Endomines
Endomines is a gold concentrate producer with mining, development and exploration operations in Eastern Finland along the 40 kilometer long Karelian Gold Line. Through various regulatory approvals, Endomines controls the exploration rights to this entire area. Endomines vision is to participate in the future structural transformation and consolidation of the Nordic mining industry. The Company may therefore be involved in acquisitions of interesting deposits or companies, should such opportunities arise.
 

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

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About Us

Endomines consists of the parent company, Endomines AB, with two wholly owned subsidiaries: Endomines Oy and Kalvinit Oy. The operations of Endomines Oy include exploration and development of gold deposits and planned gold mining. Kalvinit Oy is focused on the development of the industrial mineral ilmenite deposits. The Company’s present mineral deposits are all located in Finland. The Company acquired all shares outstanding in the two subsidiaries, Endomines Oy and Kalvinit Oy, through a non-cash issue. These subsidiaries were founded in the mid-1990s and have been financed by private individuals and Finnish institutions since inception.

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