strategic exploration review disclaimer & forward looking statements creating a low cost african...

CREATING A PREMIER AFRICAN GOLD PRODUCER

Strategic Exploration Review November 2016

2

Disclaimer & Forward Looking Statements

CREATING A LOW COST AFRICAN GOLD PRODUCER

For all potential discovery targets mentioned in the presentation,

the potential quantity of ounces is conceptual in nature since there

has been insufficient exploration to define a mineral resource and

since it is uncertain if exploration will result in the targets being

delineated as a mineral resource.

Cash cost per ounce and all-in sustaining cash cost per ounce are non-GAAP

performance measures with no standard meaning under IFRS. This

presentation contains “forward-looking statements” including but not

limited to, statements with respect to Endeavour’s plans and operating

performance, the estimation of mineral reserves and resources, the timing

and amount of estimated future production, costs of future production,

future capital expenditures, and the success of exploration activities.

Generally, these forward-looking statements can be identified by the use of

forward-looking terminology such as “expects”, “expected”, “budgeted”,

“forecasts” and “anticipates”. Forward-looking statements, while based on

management’s best estimates and assumptions, are subject to risks and

uncertainties that may cause actual results to be materially different from

those expressed or implied by such forward-looking statements, including

but not limited to: risks related to the successful integration of acquisitions;

risks related to international operations; risks related to general economic

conditions and credit availability, actual results of current exploration

activities, unanticipated reclamation expenses; changes in project

parameters as plans continue to be refined; fluctuations in prices of metals

including gold; fluctuations in foreign currency exchange rates, increases in

market prices of mining consumables, possible variations in ore reserves,

grade or recovery rates; failure of plant, equipment or processes to operate

as anticipated; accidents, labour disputes, title disputes, claims and

limitations on insurance coverage and other risks of the mining industry;

delays in the completion of development or construction activities, changes

in national and local government regulation of mining operations, tax rules

and regulations, and political and economic developments in countries in

which Endeavour operates. Although Endeavour has attempted to identify

important factors that could cause actual results to differ materially from

those contained in forward-looking statements, there may be other factors

that cause results not to be as anticipated, estimated or intended. There

can be no assurance that such statements will prove to be accurate, as

actual results and future events could differ materially from those

anticipated in such statements. Accordingly, readers should not place

undue reliance on forward-looking statements. Please refer to Endeavour’s

most recent Annual Information Form filed under its profile at

www.sedar.com for further information respecting the risks affecting

Endeavour and its business.

The scientific and technical content of this presentation has been reviewed, verified and compiled by Gérard de Hert, EurGeol, Senior VP West Africa Exploration for Endeavour Mining. Gérard de Hert has more than 19 years of mineral exploration and mining experience, and is a "Qualified Person" as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101").

Amongst Largest and Most Promising Portfolios in West Africa

+200 Targets 7,190 km2 10 Mining Leases 42 Exploration Licenses

390km²

2,140km²

510km²

4,150km²

3CREATING A LOW COST AFRICAN GOLD PRODUCER

1010

98

7

5

Randgold Acacia IAMGOLD B2Gold Semafo EDVEDV2015

$31/oz

$16m

Acacia

$31/oz

$24m

Randgold

$72/oz

B2gold

$42m

$42/oz

Iamgold

$70/oz

Semafo

$59/oz

$56m

$32m

$18m

2016 estimated production and 2015/2016 Exploration budget

Average $51/oz produced

Short Mine Lives Due To Lack of Exploration, Not Potential!

It is estimated that EDV should have spent at least $10m/year more in exploration in the previous years to support resource replacement and to be in line with peers

Exploration spend, $m/yearExploration spend, $/oz producedAverage Mine Life of operating assets

Endeavour spent less than peers on exploration… … As a result it suffers from shorter mine lives

*Excluding purchases of Ity and Karma, exludes Hounde project

*


5

Previous Exploration Strategy Was Based

On Converting Inferred Resources


133

1,603

165

1,693

273

1,582

154

311274

1,023

65

244

HoundéAgbaouNzema Tabakoto

2014 20152013‒ Previous 3 years focused on replacing depletion/production by drilling in-mine or near-mine already existing inferred resources for conversion to indicated and subsequent reserves

‒ Insufficient exploration investment previous 3 years to support inferred resources renewal

‒ Re-launching near-mine and brownfield exploration to define new inferred resources and bring them to Indicated/reserve status

Inferred Resources Evolution (excluding acquisitions)

Exploration Became a Core Focus in 2016

with New Structure in Place

SVPWest Africa Exploration

Resource Manager

HR Manager

New VenturesManager

Expert Geologist

FinanceManager

NI 43-101 Compliance

Greater ItyExplo Manager

Regional CIExplo Manager

AgbaouExplo Manager

HoundeExplo Manager

KarmaExplo Manager

Regional BFExplo Manager

Tabakoto/KofiExplo Manager

Abidjan based


Sr GeosJr GeosDBTechsAccountSupport



Sr GeosJr GeosDBTechsSupport


Sr GeosJr GeosTechsAccountSupport

Sr GeosJr GeosTechsSupport

Highly experienced team– Strong knowledge of West African

Birimian belts

– Senior staff from BRGM, Randgold,Iamgold, Areva, La Mancha, etc

– 20 Seniors Geologists

– 7 Exploration Managers

– 40 Juniors Geologists

– 130 Technicians and Support Staff

CEO

COOEVP

ProjectsEVP

Exploration & Growth

CI GovernmentRelations Advisor

Legal Advisor

Exploration Strategic Review Launched in 2016

Strategic Objectives

1Extend mine lives to +10 years

2 Discover our next mine

Methodology

Step 1: What is our potential?• Quantify and Rank exploration potential across all

mines and portfolio• Risk-weight the potential and define the associated

expenditures over 2017-2021 action plan

Step 2: What is our priority? • Set priority ranking based on strategic interest of

doing exploration on the property and risk/reward basis


5

950

800

700

18

750

600

850

1,100

1,050

4

1,000

14 1611 1210

900

76 1398 15

650

17

Gold Fields

AngloGoldAshanti

Newcrest

Kinross

IAMGOLD

AISC, $/oz

Golden StarTeranga

Endeavour2015A

Semafo

Nordgold

Perseus

Resolute

Randgold

Endeavour2016A

Newmont

Average mine life, years

Benchmark of West-African Producers

Bubble size represents production

Source: UBS Research, based on 2015A only West-Africa production. Mine life excludes expansion and development projects such as Kinross’ Tasiast Phase 2 and Resolute’s UG project

8CREATING A PREMIER AFRICAN GOLD PRODUCER

Endeavour(output of strategic

exploration review)

Exploration objective is to generate 2x more reserves than depletion (ie. Find +10Moz of Indicated) over the next 5 years

What does increasing to +10-year mine life represent?

Action Plan to Reach Strategic Objectives

Target Output

5 year exploration program

highlighting potential to find

>10Moz of indicated resources

at < 20$/oz

Action Plan• Quantify the exploration potential per

target, permit, project, country and within the Company

• Set ranking and priorities, select best targets and related exploration program per target

• Propose a realistic 5 year exploration program/budget allowing EDV to increase existing mine life by adding new low cost, high value ounces (< 20$/Oz discovery cost, AISC production cost <$800/oz)

• Concentrate greenfield exploration efforts on highest potential, large targets with the highest probability of becoming a new stand-alone operation


Exhaustive screening of all >200 potential

targets

130+ target screened through multi-criteria

data analysis

First filtering

Quantifying min/max and mean size and grade

(Length x width x 100m depth x density x average grade issued from existing drilling or nearby analogs)

Top selection of 40 most significant

targets

Risked mean Indicated Resource

per Target

Risked-probability weighted potential

per targetHigh/Medium/Low

Exploration budget required per target to

reach Indicated resource level status

Strategic Prioritization

Screening and Ranking Methodology

Conservative Approach



Methodic and Exhaustive Review to Quantify and Rank Potential

• Visit to all sites with Exploration Managers/Chef-Senior Geologists, EDV experts

• 6 months detailed review of all past exploration, synthesis of all available and validated data in database

• All Geochem (Stream and Soil), all geophysics (air and ground)

• All Geological and Structural data (Outcrops, cores, Maps, regolith, structures, artisanal mining)

• All Drilling (Auger, RC, DD, Geotech) , logs and analytic results

• 130+ Targets screened through multi-criteria analysis of all data to identify and support exploration targets for evaluation

• All targets referenced and classified according to :

– Current state of project knowledge (from grassroot to development)

– Quality of supporting data (drilling, available nearby analogs, structural trends, favorable geology, etc.)

– Distance to producing facilities:

• Mine Exploration then Near Mine exploration within a 5 km radius from facilities

• Brownfield Exploration between 5 and 15 km from facilities

• Greenfield Exploration for over 15/20 km from facilities (tentative stand alone future projects, or feeding the facilities if high grade)

– Geological framework, mineralization type, mineability, exploration game changer

• All targets characterized by a minimum-maximum and mean size of tentative deposit (length, width, depth), including estimated average grade when calibration is available

• Selection of the 30% (40) most significant targets over the full portfolio in term of localization, mean size, and nearby upside (possible clusters), all gathered per relevant PE (Exploration Permit)or PEX (Exploitation permit)

12

Further Selection, Ranking and Risk Evaluation

• Each selected target (~40) was risked and characterized by a Probability of Occurrence (POO), based on geological confidence/structural understanding/ type of expected mineralization/existing positive intercepts/trend extension, strong and coherent gold in soil and Auger anomalies

– POO 0.8 to 1: Very high confidence (some Mine and Near Mine Exploration or already Identified /tested targets)

– POO 0.6 : Probable deposit, with a size and grade distribution according to prognosis (Oz and average grade)

– POO 0.4: Less than average Probability of Occurrence, kept in the planning due to its possible size (High Risk- High Reward type) or due to its short distance to mine

• All selected exploration targets were set within a 5 year window, according to mine priorities, permit duration, requested exploration efforts, and budget

• All selected targets characterized with:

– The required drilling amount/yearly budgets and the related timing of Indicated resource definition

– Proposed yearly budgets include estimated manpower, drilling, analysis, support, geophysics, geochem, etc

– A 2017-2021 required risked exploration spending necessary to discover the targeted risked mean indicated Oz per target


Output: Ranking of Potential

4

3

1

6

5

2

0.5-1.5Moz0.5-1.0Moz

4.0-6.0Moz

Greater Ity

2.5-3.5 Moz

Houndé

1.5-2.5Moz

True Gold

0.5-1.0Moz

Côte d’Ivoire

Regional

Tabakoto Agbaou

Total Potential to find 10-15Moz over next 5 yearsMoz

48%52%

10-15Moz

Near Mine to Brownfield < 15km

Greenfield

Note: See mine sections for full details. Based on average gold grade of 2.0-3.5g/t for Greater Ity, 1.8-2.5g/t for Houndé, 2.0-4.0g/t for Tabakoto, 1.0-1.5g/t for TrueGold and 1.5-3.0g/t for Côte d’Ivoire regional. The potential quantity of ounces is conceptual in nature since there has been insufficient exploration to define a mineral resource and since it is uncertain if exploration will result in the targets being delineated as a mineral resource.


Out-put: Low Discovery Costs

$10m

$15m

$25m

$30m

$45m

$55m

$13/oz$20/oz

$25/oz

$15/oz$15/oz$11/oz

Côte d’Ivoire

Regional

True GoldAgbaouTabakotoHoundéGreater Ity

Average discovery costExploration budget

Annual budget of $35-40m with anticipated average discovery costs <$15/oz

33%

Côte

d’Ivoire

50%

Mali

17%

Burkina

Faso

5-year budget


What are the priorities with annual budget of $35-40m

2017

9%

100%

7%

21%

24%

9%

31%

9%

4%

2021

100%

12%

7%

43%

27%

6%

2020

100%

13%

2%

35%

35%

6%

2019

100%

10%

4%

21%

20%

26%

20%

2018

100%

7%

3%

25%

20%

22%

23%

True GoldRegional CIItyAgbaouHoundeTabakoto

Priorities: 1. Tabakoto due to its short mine life 2. Agbaou to extend oxide mine life3. Ity to extend HL and Improve CIL case4. Houndé (once in production) to maintain 250kozpa level after 4th year

Priorities: 1. Ity Greater Area 2. Houndé to prolong mine life3. Tabakoto and Agabou exploration will be

success driven


Why are we confident?

• Conservative approach all along the full review– Selection of only 40 targets among the 130+ identified

– Most of the selected targets correspond to coherent gold in soil or Auger clusters, and are located in favorable geology along or parallel to proven or prolific structural or shear zones

– At least half of the selected targets have already seen some positive drilling (DD/RC/Auger)

– Only mean size has been considered for each selected target

– Probability of Occurrence applied for each selected target

• Although impressive, the targeted new ounces are reasonable when put into perspective

– New targeted Ounces in the Greater Ity ~700 km2 area are only at the same level as what has already been produced and discovered on the Ity licenses (35 km2), with similar geology.

– New targeted ounces in Houndé area are in the same order of magnitude as what has already been discovered to date (all selected targets already received some positive drillings)

– 2/3 of new targeted ounces should be coming from the Greater Ity and Houndé portfolio which hold the better defined and highest quality exploration targets.

– The average yearly spending of $35-40M is in line with our peers

• We are confident that this goal is achievable, thanks to: – The quality of our exploration portfolio and the results of past exploration

– The conservative nature of the chosen approach in this evaluation

– The quality and experience of our exploration team


Conclusion

• Exploration Strategic Review has outlined that:

– It is reasonable, over the next 5 years, to replace through exploration only,

twice its yearly production in resources and therefore to sustain and extend

mines lives to +10 years

– It is possible to discover, develop and prepare at least one new multi-

million ounces project to succeed Houndé and Ity

– Few companies have the quality and depth of our exploration portfolio

• Over the next 5 years, Endeavour plans to spend $175 to 200M aiming at discovering between 10 to 15 Moz indicated resources, at an average discovery cost <$15/oz

– Average spending of ~$35 to 40M/year (average 300,000m drilling/year)

– Mali is most urgent short-term priority for resource renewal due to shortest

mine life

– The largest exploration potential is seen in the Greater Ity and Hounde

areas with 2/3rd of the total new ounces to be discovered

• EDV has the properly qualified and staffed exploration team to conduct this program


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

$1,150/oz

$1,050/oz

$1,100/oz

$750/oz

$1,000/oz

$1,200/oz

$850/oz

$800/oz

$950/oz

$900/oz

$700/oz

$650/oz

$600/oz

$550/oz

$500/oz

$450/oz

Mine life, years

SOLD

Agbaou(175-180koz)

Nzema(100-110koz)

Tabakoto(150-160koz)

AISC, US$/oz

Ity HL(75-80koz)

Ity CIL 165koz

starting 2019

Karma(100-110koz)

Bubble size represents production

Côte d’Ivoire Burkina Faso Ghana Mali


Possibility to run HLin parallel

Mine life as at 2016

Youga

Decreased costs from >1,300/oz

Houndé+250koz starting Q4-2017

Cut-back

Karma with North Kao

Significant Exploration Potential Confirms Ability

to Increase Portfolio To +10 Year Average Mine Life

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