News Bureau

March 24, 2020

Endeavour to acquire SEMAFO!

Endeavour Mining Corporation has entered into a definitive agreement whereby Endeavour will acquire all of the issued and outstanding securities of SEMAFO by way of a Plan of Arrangement under the Business Corporations Act. The Transaction will create a top 15 global gold producer and the largest in West Africa with six operations and an attractive growth pipeline.

Endeavour to combine with SEMAFO to create a leading West African gold producer focuses on

1: Creates top 15 global gold producer with +1 million ounces of gold production per year,

2: Creates a leading West African gold producer with six operations and an attractive growth pipeline,

3: Strengthens strategic positioning and enhances ability to manage risks.

4: Offers the ability to deliver significant synergies at corporate, country and asset level,

5: Enhances capital market profile with greater ability to fund growth,

6: Exchange ratio of 0.1422x represents a 27.2% premium to the 20-day VWAP for SEMAFO and is accretive on all metrics to Endeavour,

7: Combined management team leverages the strong skillsets of both companies  

8: La Mancha strongly supports the transaction and commits to inject $100 million in the combined entity. 

Due to the strong strategic rationale for local consolidation, both sets of Board of Directors have unanimously approved the Transaction. Management will host a joint conference call and webcast to Transaction Rationale:

1: Creates a leading West African gold producer with enhanced strategic positioning and greater ability to manage risks while benefiting from significant synergies,

2: The combined entity would benefit from four cornerstone mines, with combined production of over 800,000 ounces per year, and increased capital allocation efficiency due to its enhanced project and exploration pipeline.

3: The combined entity would have an enhanced capital markets profile with greater ability to fund growth. On a Pro-forma basis, a combined Endeavour and SEMAFO would have:

4: More than 1.0 Moz of gold production in 2020 (based on current company guidance), placing it among the top 15 gold producers globally

5: All-In Sustaining Costs below $900/oz in 2020 (based on current company guidance), placing it within the bottom third of the industry cost curve & 6: 10.5Moz of Reserves and 20.7Moz of M&I Resources (inclusive of reserves based on the most recently published figures from both companies), plus an additional 6.3Moz of Inferred resources.

Michael Beckett, Chairman of Endeavour, stated: “This combination will create one of the leading gold companies, with the largest portfolio of operating assets located entirely in West Africa. In addition to being immediately accretive on all key metrics, this transaction will enhance our scale as well as providing improved trading liquidity, greater asset diversification and a reduced risk profile for all shareholders.

We will also continue to benefit from having La Mancha as a cornerstone shareholder, who will invest $100 million into to the combined entity and hold a 25 per cent interest on a pro forma basis.”

Sébastien de Montessus, President & CEO of Endeavour, stated: “This combination offers a rare opportunity to bring together two leading West African mine operators with a shared strategic vision, complementary assets, and management teams with a proven track record. We believe this transaction represents a compelling value equation for both sets of shareholders with the potential for a meaningful re-rating, whilst providing increased asset diversification and enhancing our ability to manage risks within the business.

Together, we will create a leading West African gold company with production of more than 1 million ounces of gold annually, supported by a robust pipeline of development projects and a significantly enhanced exploration portfolio focused on the highly prospective Birimian Greenstone Belt.

With both companies having recently completed build-out phases and mine ramp-ups, the combined business is well-positioned for a sustained period of strong cash flows. Our enhanced capital markets profile should provide added trading liquidity, free float and size, characteristics that investors are seeking in today’s market environment, and we will continue to allocate capital in a disciplined and efficient manner with a focus on maximizing shareholder returns.”

Benoit Desormeaux, President and CEO of SEMAFO, stated:

"This transaction has received strong support from our key shareholders who recognize it as an exciting value-creating opportunity to bring together two companies with common values and shared cultures built on decades of successful West African experience. For our shareholders, this transaction offers the benefits of both an upfront premium and a significant re-rating opportunity within a stronger merged company.

Our team, and I, are thrilled to be joining forces with Endeavour and we look forward to the opportunity to leverage our combined skill sets to create value for all shareholders. We will leverage our expertise in Montreal to build a technical hub to realize operational, technical and exploration synergies while advancing studies on our enhanced project pipeline.”