Endeavour and Teranga merge to create a new Top 10 gold producer

HIGHLIGHTS:

· Creates a new top 10 senior gold producer with industry-leading low production costs and diversification across three countries

· Combines highly complementary assets with potential for significant synergies

· Strong cash flows and healthy balance sheet to fund attractive dividends and growth, whilst building a strong net cash position in 2021

· High potential for re-rating given potential best in class operating and financial metrics and attractive valuation compared to other senior gold producers

· Re-rating potential also underpinned by an enhanced capital markets profile with intention to seek a second listing on the London Stock Exchange as a Premium issuer targeting FTSE 100 entry

· Exchange ratio of 0.470x represents a premium of 5.1% based on the closing price on November 13, 2020, reflecting a balanced contribution from both sets of shareholders 

· Combination strongly supported by cornerstone shareholders with voting support agreements received

· La Mancha commits to inject $200 million in the combined entity

George Town & Toronto, November 16, 2020 – Endeavour Mining Corporation (“Endeavour”) (TSX:EDV) and Teranga Gold Corporation (“Teranga”) (TSX:TGZ; OTCQX:TGCDF) are pleased to announce that they have entered into a definitive agreement (the “Arrangement Agreement”) whereby Endeavour will acquire all of the issued and outstanding securities of Teranga by way of a Plan of Arrangement under the Canada Business Corporations Act (the “Combination”). Management will host a joint conference call and webcast today, at 8.30am Toronto time, 1.30pm London time (information provided in the section below).  

Existing Endeavour and Teranga shareholders will own approximately 66% and 34%, respectively, of the combined company on a fully diluted in-the-money basis. Pursuant to the Plan of Arrangement, Teranga common shares will be exchanged at a ratio of 0.470 Endeavour ordinary shares for each one Teranga common share (the “Exchange Ratio”). The Exchange Ratio represents a modest premium of 5.1% based on the closing price of Endeavour and Teranga’s shares on the TSX on November 13, 2020 and 9.4% based on the 20-day volume weighted average price of both companies for the period ended November 13, 2020.  

Sébastien de Montessus, President and CEO of Endeavour, said: “This combination offers an attractive opportunity to both sets of shareholders. By combining our complementary assets, we will enhance our strategic position on West Africa’s highly prospective Birimian Greenstone Belt and we will have the ability to deliver material synergies. The combined entity will become a new senior gold producer and enjoy an improved capital markets profile, underpinned by a healthy balance sheet and strong cash flow capabilities to support a sustainable dividend.

This transaction is immediately accretive to our shareholders on a NAV basis and broadly CFPS and EPS neutral over the next two years. It will be strongly accretive from 2023 when Sabodala-Massawa is ramped up into a top asset in the region while immediately adding geographic diversification into mining-friendly Senegal. The Wahgnion mine provides immediate cash flow and the rapidly advancing Golden Hill and Afema projects offer further growth optionality. The Teranga management team has done an outstanding job unlocking value and we look forward to continuing to deliver returns for shareholders through the creation of a business with outstanding prospects.

Richard Young, President and Chief Executive Office of Teranga, said: “We have taken Teranga from a single asset producer to a low cost, mid tier gold producer over the past few years.  This combination with Endeavour, strongly supported by our two largest shareholders, allows Teranga shareholders to benefit from an improved valuation as owners of a best in class senior gold producer with among the lowest costs as well as among the best balance sheet, free cash flow yield, growth pipeline and dividend yield.”

ABOUT ENDEAVOUR
Endeavour Mining is a multi-asset gold producer focused on West Africa, with two mines (Ity and Agbaou) in Côte d’Ivoire, four mines (Houndé, Mana, Karma and Boungou) in Burkina Faso, four potential development projects (Fetekro, Kalana, Bantou and Nabanga) and a strong portfolio of exploration assets on the highly prospective Birimian Greenstone Belt across Burkina Faso, Côte d’Ivoire, Mali and Guinea.
As a leading gold producer, Endeavour Mining is committed to principles of responsible mining and delivering sustainable value to its employees, stakeholders and the communities where it operates. Endeavour is listed on the Toronto Stock Exchange, under the symbol EDV.

ABOUT TERANGA
Teranga is a mid-tier gold producer operating long-life, low-cost mines and advancing prospective exploration properties across West Africa, one of the world’s fastest growing gold jurisdictions. The top-tier gold complex created by integrating the recently acquired high-grade Massawa project with Teranga’s Sabodala mine, the successful commissioning of Wahgnion, Teranga’s second gold mine, and a strong pipeline of early to advanced-stage exploration assets support the continued growth of Teranga’s reserves, production and cash flow. Through its continued success and commitment to responsible mining, Teranga creates sustainable value for all stakeholders and acts as a catalyst for social, economic, and environmental development.

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