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Endeavour Mining Agrees To Partnership With La Mancha, Acquires Stake In Ity Gold
Mine
By Allen Sykora of Kitco News
Monday September 21, 2015 09:38

Editor's Note:Updating earlier story with comments from Endeavour CEO at webcast.

(Kitco News) - Endeavour Mining Corp. (TSX: EDV; ASX: EVR) said Monday the company has entered into a long-term strategic partnership with La Mancha
Holding S.àr.l., with the deal allowing Endeavour to both receive an infusion of cash and acquire a major stake in the Ity Gold Mine in Côte d'Ivoire.

La Mancha Holding is a privately held gold-investment company controlled by the Sawiris family.

Endeavour will acquire La Mancha's indirect 55% interest in Société des Mines d'Ity S.A., which operates the Ity Gold Mine, plus various regional exploration
properties.

Upon completion of the transaction, La Mancha will be issued approximately 177.1 million Endeavour ordinary shares representing 30% of the enlarged share
capital, Endeavour reported. Based on Endeavour’s market value, the new shares issued to La Mancha would be valued at $77.9 million, Endeavour said.

However, La Mancha also will invest $63 million cash into the business. La Mancha has also expressed an in-principle commitment to invest up to $75 million to
support Endeavour's growth.

“One of the main points is that the transaction will significantly strengthen our balance sheet,” said Neil Woodyer, chief executive officer of Endeavour.

Endeavour said the injection of capital will reduce its debt from $242 million to $159 million. Also, the company said it now will have an annual gold production
rate of 580,000 ounces from five operations across West Africa, compared with 500,000 ounces otherwise. Further, Endeavour will have further growth
opportunities in Africa.

“Very significantly, we increase our reserves by about 22% and we also reduce our all-in sustaining cost,” Woodyer said.

Endeavour’s total gold production was 255,000 ounces for the first six months of 2015, with an all-in sustaining cost of $922 an ounce. If 45,000 ounces of Ity
output had been included, production would have been 300,000 ounces with an AISC of $888, Endeavour said. The company adds that it intends to continue the
studies undertaken by La Mancha at Ity that envision construction of a processing facility that could increase annual gold production to over 120,000 ounces for
over 10 years with average AISC of less than $725 an ounce.

Sebastien de Montessus, the chief executive officer of the La Mancha Group, will become president of Endeavour. Among other conditions, the transaction is
subject to approval from Endeavour's current shareholders.

“It’s important to realize there is compelling value immediately to our shareholders,” Woodyer said. He later added, “It adds to our current profile, it reduces our
costs and -- very, very importantly -- secures a committed cornerstone investor who is firmly in line with our existing investors.”

He estimated that talks over the deal began three or four months ago. The extra cash that would be received under the agreement helps Endeavour in the
current low gold-price environment, the CEO said. This also helps the company with future expansion.

An aggressive exploration program at Ity has increased measured and indicated resources since 2011 from 0.2 million ounces to 2.9 million, Woodyer said.

“By adding the brownfield Ity CIL development project alongside our Houndé project, we will have strengthened our pipeline for near-term growth,” Woodyer said
in an Endeavour news release. “With the additional exploration properties, we will become the mining company with the largest exploration package in Côte
d'Ivoire, which is one of the most prospective greenstone belts in the world.”

Naguib Sawiris, chairman of the La Mancha Group, described himself as committed to Africa and the gold-mining industry.

“My strategic goal is to create value with a long-term approach. The Endeavour board and management shares this objective and has a successful track record
of building and acquiring assets in Africa,” he said. He later added, “By combining our African assets and management skills we will grasp future opportunities to
create a leading African gold producer."

By Allen Sykora of Kitco News; asykora@kitco.com

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