AMN - BURKINA FASO: Endeavour acquires True Gold Mining

Endeavour Mining has entered into a definitive arrangement agreement with True Gold Mining which will result in Endeavour acquiring all of the issued and outstanding common shares of True Gold via a court-approved plan of arrangement.

In conjunction with the acquisition, Endeavour Mining announces that La Mancha Holding, its largest shareholder with 30% ownership, intends to exercise an anti-dilution right that will result in an approximate C$82.6 million new equity placement in Endeavour.

True Gold has a 90% interest in the Karma gold mine in Burkina Faso, where production start-up was expected by the end of April. The acquisition will increase Endeavour's forecast gold production rate by approximately 110,000-120,000 oz/year at a low AISC of approximately $700/oz in years 1 to 5, with a mine life of 8.5 years based on current reserves.

Endeavour Mining's attributable Proven and Probable gold reserves will increase by 19% to 5.4 Moz, Measured and Indicated gold resources will increase by 39% to 10.2 Moz, and Inferred gold resources will increase by 123% to 3.9 Moz.

Under the transaction, Endeavour Mining is providing a $15 million convertible bridge loan to True Gold to ensure True Gold remains well funded as it completes construction of the Karma mine. Currently, True Gold has drawn $105 million of its $120 million gold streaming facility with Franco-Nevada Corp and Sandstorm Gold.

Endeavour Mining is providing the Bridge Loan as a financing alternative that allows True Gold to maintain its current liquidity without additional gold streaming.

Endeavour Mining CEO Neil Woodyer says: "The production profile and low cost of True Gold's Karma mine is a very attractive fit with our West African operating portfolio. Karma is nearing production, and Endeavour Mining has both the financial strength and an experienced operations team to ensure Karma's value is maximised during this important stage. While True Gold shareholders are receiving an attractive premium and an opportunity to participate in a larger diversified West African producer, Endeavour Mining shareholders are gaining a new, low-cost mine that boosts group production while reducing group AISC/oz in a value accretive transaction. In the long term, the Karma mine has extensive exploration potential to extend its mine life. Endeavour Mining's enhanced ability to finance an expanded exploration strategy at Karma, and at our own mines, is expected to generate significant value.

“We intend to see Karma complete its production ramp-up and then commence construction of the Houndé project.

“This transaction also demonstrates the strength of Endeavour Mining's strategic relationship with La Mancha and Naguib Sawiris as our long term partner with the shared vision of building a leading, Africa-focused gold producer."

Karma provides a material upgrade to the recently divested Youga Mine and emphasises management's dedication to proactive portfolio management and cash flow maximisation.

On a pro forma basis, Endeavour Mining will have five producing mines; the Houndé project, a long-life and low-cost development project that is construction ready; and an attractive pipeline of development and exploration properties.

Endeavour Mining is a TSX-listed intermediate gold mining company which operates four West African mines in Côte d'Ivoire, Mali, Burkina Faso and Ghana. In 2016, it expects to produce between 535,000 and 560,000 oz at an all-in sustaining cost of $870 to S$920/oz, after the sale of the Youga mine and before the addition of the Karma mine.

www.endeavourmining.com

News courtesy of International Mining