integrated management discussion & analysis and financials€¦ · and financials for the three...

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INTEGRATED MANAGEMENT DISCUSSION & ANALYSIS AND FINANCIALS For the three months and six months ended June 30, 2020 (Expressed in Thousands of United States Dollars) (unaudited)

Q1

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MANAGEMENT DISCUSSION & ANALYSIS

SECTION 1

TableofContents

1.BUSINESSOVERVIEW.............................................................................................................................................. 3

1.1.OPERATIONSDESCRIPTION......................................................................................................................... 3

2.HIGHLIGHTSFORTHETHREEMONTHSENDEDJUNE20,2020.............................................................................. 4

2.1.CORPORATEHIGHLIGHTS............................................................................................................................ 4

2.2.OPERATIONALANDFINANCIALHIGHLIGHTS.............................................................................................. 4

3.OPERATIONALREVIEWSUMMARY......................................................................................................................... 6

4.BUSINESSREVIEW................................................................................................................................................... 7

4.1.ENVIRONMENT,SOCIALANDGOVERNANCE.............................................................................................. 7

4.2.COVID-19RESPONSE................................................................................................................................... 8

4.3.OPERATIONSREVIEW.................................................................................................................................. 10

4.4.PROJECTSUPDATE...................................................................................................................................... 18

5.OUTLOOK................................................................................................................................................................ 19

5.12020OUTLOOK........................................................................................................................................... 19

6.RESULTSFORTHEPERIOD...................................................................................................................................... 22

6.1.STATEMENTOFCOMPREHENSIVE(LOSS)/EARNINGS................................................................................ 22

6.2.CASHFLOW................................................................................................................................................. 24

6.3.ACCOUNTINGPOLICIESANDCRITICALJUDGEMENTS................................................................................ 27

7.NON-GAAPMEASURES........................................................................................................................................... 28

7.1.ALL-INSUSTAININGMARGINANDADJUSTEDEBITDA................................................................................ 28

7.2.CASHANDALL-INSUSTAININGCOSTPEROUNCEOFGOLDSOLD............................................................. 29

7.3.ADJUSTEDNETEARNINGSANDADJUSTEDNETEARNINGSPERSHARE..................................................... 30

7.4.OPERATINGCASHFLOW............................................................................................................................. 31

7.5.NETDEBT/ADJUSTEDEBITDARATIO........................................................................................................... 31

7.6.RETURNONCAPITALEMPLOYED................................................................................................................ 32

8.QUARTERLYANDANNUALFINANCIALANDOPERATINGRESULTS........................................................................ 33

9.RISKFACTORS......................................................................................................................................................... 35

9.1.BUSINESSRISKS........................................................................................................................................... 35

9.2FINANCIALRISKS.......................................................................................................................................... 36

10.CONTROLSANDPROCEDURES.............................................................................................................................. 39

10.1.DISCLOSURECONTROLSANDPROCEDURES............................................................................................. 39

10.2.INTERNALCONTROLSOVERFINANCIALREPORTING................................................................................ 39

10.3.LIMITATIONSOFCONTROLSANDPROCEDURES...................................................................................... 39

CAUTIONARYNOTEREGARDINGFORWARD-LOOKINGSTATEMENTS....................................................................... 39

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This Management Discussion and Analysis (“MD&A”) should be read in conjunction with Endeavour Mining Corporation’s(“Endeavour”,the“Company”,the“Corporation”,orthe“Group”)condensedinterimconsolidatedfinancialstatementsforthethreeandsixmonthsendedJune30,2020whichhasbeenpreparedinaccordancewithInternationalAccountingStandard34-Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards (“IFRS”) or(“GAAP”)aswellastheauditedconsolidatedfinancialstatementsfortheyearsendedDecember31,2019and2018andnotestheretowhichhavebeenpreparedinaccordancewithIFRS.ThisMD&Acontains“forward-lookingstatements”thataresubjecttoriskfactorssetout inacautionarynotecontainedherein.Thereader iscautionednottoplaceunduerelianceonforward-looking statements.All figuresare inUnitedStatesDollars,unlessotherwise indicated. Tabular amountsare in thousandsofUnitedStatesDollars,exceptpershareamountsandwhereotherwiseindicated.ThisMD&AispreparedasofAugust05,2020.AdditionalinformationrelatingtotheCorporation,includingtheCorporation’sAnnualInformationForm,isavailableonSEDARatwww.sedar.com.

1. BUSINESSOVERVIEW

1.1. OPERATIONSDESCRIPTION

EndeavourMining isamulti-assetTSX-listed intermediategoldproducer, focusedondevelopingandoperatingaportfolioofhighquality,low-cost,long-lifeminesinWestAfrica.TheCompany’sassetsincludetwomines(ItyandAgbaou)inCôted’Ivoire,twomines(HoundéandKarma)inBurkinaFaso,twopotentialdevelopmentprojects(FetekroandKalana)andastrongportfolioofexplorationassetsonthehighlyprospectiveBirimianGreenstoneBeltacrossBurkinaFaso,Côted’Ivoire,MaliandGuinea.

As a leading producer, Endeavour is committed to principles of responsible mining and delivering sustainable value to itsemployees, stakeholders, and the communities where it operates. The Company adopts an active portfolio managementapproachtofocusonhighqualityassetswithaninvestmentcriteriabasedoncapitalefficiencyandreturnoncapitalemployed.

Figure1:EndeavourMining’sPrincipalPropertiesinWestAfricaasofJune30,2020

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http://www.sedar.com/

2. HIGHLIGHTSFORTHETHREEMONTHSENDEDJUNE30,2020

2.1. CORPORATEHIGHLIGHTS

• OnMay1,2020,Endeavourannouncedthat it filed the jointmanagement informationcircular for theextraordinarygeneralandspecialmeetingsofEndeavourandSEMAFOheldonMay28,2020.Thepurposeofthemeetingswastoseek approval for the previously announced proposed acquisition by Endeavour of all the issued and outstandingsecuritiesofSEMAFObywayofaPlanofArrangementundertheBusinessCorporationsAct(Quebec),amongstothermatters.

• On May 27, 2020, Endeavour announced that it published an enhanced 2019 Sustainability Report which detailsprogress towards implementing theWorldGoldCouncil’s environment, social and governance reporting framework,theResponsibleGoldMiningPrinciples,aswellastheCorporation’sperformanceagainstkeyindicatorsin2019.

• OnMay28,2020,Endeavourannouncedthatitsshareholdersvotedoverwhelminglyinfavourofthespecialresolutionin supportof theplanofarrangementpursuant towhichEndeavour indirectlyacquiredallof theSEMAFOcommonsharesonthebasisof0.1422ofanEndeavourcommonshareforeachoutstandingSEMAFOshare.

• OnJune26,2020,Endeavourannounced InvestmentCanadaclearance for theSEMAFOtransactionmeaningthatallrequiredregulatoryapprovalsfortheacquisitionofSEMAFOwerereceived.EndeavourclosedtheacquisitiononJuly2,2020.Furthermore,the$100.0millionLaManchainvestmentisexpectedtocloseonoraboutJuly3,2020.

2.2. OPERATIONALANDFINANCIALHIGHLIGHTS

• Q2-2020productionwas148,998ouncesatanall-insustainingcost1(“AISC”)of$939perounce;wellpositionedtomeetfullyear2020guidance.

• Revenuewas$253.1millioninQ2-2020whichgenerated$88.2millioninearningsfrommineoperations,anincreaseoverQ2-2019of$33.2millionand$35.2million,respectively.

• OperatingCashFlowbeforenon-cashworkingcapitalamountedto$85.4millionQ2-2020,or$0.77pershare,anincreaseof$28.0millioncomparedtoQ2-2019.

• Basiclosspersharewas$0.34inQ2-2020comparedtoabasicearningspershareof$0.01inQ2-2019.

• AdjustedNetEarnings1of$52.8millionor$0.48pershareinQ2-2020,a$44.3millionincreasecomparedtoQ2-2019.

• Netdebt1was$472.6inQ2-2020,markingareductionof$187.3comparedtoQ2-2019,followingnearlyfouryearsofintensivegrowth-capitalinvestment.

• HealthyNetDebt/AdjustedEBITDA1(LTM)of1.00xatquarter-end,areductionof64%from2.75xattheendofQ2-2019.

• Cashof$351.8millionatquarter-end,providingsignificantheadroomtooperatewithintheCOVID-19environment.

1 Throughout thisMD&A, cash costs, all-in sustaining costs, adjusted EBITDA, adjusted earnings attributable to shareholders, all-in sustainingmargin, all-inmargin, sustaining and non-sustaining capital expenditures, growth projects, free cash flow, net debt and net debt/adjusted EBITDAare non-GAAP financialperformancemeasureswithnostandardmeaningunderIFRS,furtherdiscussedinthesectionNon-GAAPMeasures.

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Table1:QuarterlyHighlights

THREEMONTHSENDED SIXMONTHSENDED

($'000s) UnitJune30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Operatingdata

Goldproduced oz 148,998 171,893 171,299 320,891 292,090

Goldsold oz 149,828 174,554 170,749 324,382 291,624

Realizedgoldprice1 $/oz 1,689 1,546 1,285 1,612 1,271

All-insustainingcosts2 $/oz 939 899 790 918 826

Cashcostpergoldouncesold2 $/oz 675 661 632 667 644

All-insustainingmargin2 $/oz 750 647 494 694 445

Cashflowdata

Operatingcashflowbeforenon-cashworkingcapital $ 85,353 119,292 57,322 204,645 105,314

Operatingcashflowbeforenon-cashworkingcapitalpershare $/share 0.77 1.08 0.52 1.85 0.96

OperatingCashFlow $ 57,416 125,955 62,209 183,371 85,125

OperatingCashFlowpershare $/share 0.52 1.14 0.57 1.66 0.78

Profitandlossdata

Revenues1 $ 253,084 269,902 219,371 522,986 370,681

Earningsfrommineoperations $ 88,245 85,518 53,051 173,763 70,877

Netcomprehensive(loss)/earningsattributabletoshareholders $ (37,229) 25,998 711 (11,231) (13,956)

Basic(loss)/earningspershareattributabletoshareholders $/share (0.34) 0.24 0.01 (0.10) (0.13)

AdjustedEBITDA2 $ 120,218 129,860 93,819 250,078 134,755

Adjustednetearningsattributabletoshareholders2 $ 52,793 33,517 8,519 86,310 3,609

Adjustednetearningspershareattributabletoshareholders2 $/share 0.48 0.30 0.08 0.78 0.03

BalanceSheetData

Cash $ 351,817 357,343 77,677 351,817 77,677

NetDebt2 $ 472,646 472,654 659,964 472,646 659,964

NetDebt/AdjustedEBITDA(LTM)ratio2 : 1.00 1.06 2.75 1.00 2.751RevenueandrealizedgoldpricearenetofgoldstreamsalestoFranco-NevadaandSandstorm.2Thisisanon-GAAPmeasure.Refertothenon-GAAPmeasuresectionoftheMD&A.

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3. OPERATIONALREVIEWSUMMARY

• Endeavour remains on track to achieve its Group production and AISC1 guidance, despite the COVID-19 pandemic, as itexpectsahighergradeprofileinH2-2020.

• Endeavour expects a stronger cash flow generation in the secondhalf of the year, due to higher production, lower non-sustaining spend (already 70% of FY-2020 guidance completed in H1), lower exploration spend (already 85% of FY-2020guidancecompletedinH1),thebenefitofhighergoldpricesanditsgoldcollarprogram(withacapof$1,500perounceforhalfitsproduction)havingbeencompletedattheendofJune2020.

• H1-2020 production amounted to 320,891 ounces, an increase over H1-2019 mainly due to the start-up of the Ity CILoperationinlateQ1-2019whileAISC1increasedinlinewithguidance.

Table2:GroupProduction


(Allamountsinkoz,ona100%basis)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Agbaou 24 27 35 52 66

ItyHeapLeach — — — — 3

ItyCIL 47 61 58 108 66

Karma 20 28 21 48 43

Houndé 57 56 58 113 114

ENDEAVOURPRODUCTION 149 172 171 321 292

Table3:GroupAll-InSustainingCosts1


(AllamountsinUS$/oz)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Agbaou 955 951 788 953 786

ItyHeapLeach — — — — 1,086

ItyCIL 784 651 585 707 585

Karma 952 866 1,047 904 999

Houndé 965 1,077 836 1,020 808

CorporateG&A 34 30 30 32 38

ENDEAVOURAISC1 939 889 790 918 8261Thisisanon-GAAPmeasure.Refertothenon-GAAPmeasuresectionoftheMD&A.

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4. BUSINESSREVIEW

4.1. ENVIRONMENT,SOCIALANDGOVERNANCE

Endeavouriscommittedtobeingaresponsiblegoldminer,creatinglong-termvalueandsharingthebenefitsofitsoperationsamongall itsstakeholders,includingemployees,membersofthecommunitieswhereitoperates,shareholders,andotherkeystakeholders. As the largest goldminer inWest Africa and a trusted government partner, Endeavour’s operations have thepotential toprovideasignificantpositive impactontheeconomiesandsocialdevelopmentof its localcommunitiesandhostcountries,whileminimizing its impact on the environment. In early 2019, Endeavour becameamemberof theWorldGoldCouncilandmadethedecisiontoadopttheResponsibleGoldMiningPrinciples(“RGMPs”)as its frameworkforfurthering itscommitmenttoresponsiblemining.

Environment, social and governance (“ESG”) policies, systems and practices are embedded throughout the business and theCompanyreportsannuallyonitsESGperformanceviaitsSustainabilityReport.

HealthandSafety

Endeavourputsthehighestpriorityonsafeandhealthyworkpracticesandsystems.TheCompany’sultimateaimistoachieve“zeroharm”performance.ThefollowingtableshowsthesafetystatisticsforthetrailingtwelvemonthsendedJune30,2020.Regrettably,a fatalaccidentoccurredat theKarmamine inBurkinaFasoonFebruary28,2020.A full investigationhasbeencarriedoutandthekeyfindingshavebeenincorporatedintotheGroup’ssafetyprocedures.Duringthequarter,therewerenolost time injuries (“LTIs”) reported for theGroup. TheGroup’s lost time injury frequency rate (“LTIFR”) continues tobewellbelowtheindustrybenchmark.

Table4:LTIFRStatisticsfortheTrailingTwelveMonthsendedJune30,2020

IncidentCategory Agbaou Karma Ity HoundéNon

Operations3Total

Fatality 0 1 0 0 0 1

LostTimeInjury 0 0 4 0 0 4

TotalPeopleHours 3,128,784 3,115,317 5,183,516 4,878,353 3,184,775 19,490,745

LTIFR1 0 0 0.77 0 0 0.21

AIFR2 4.47 4.49 4.05 1.84 5.06 3.441LTIFR=NumberofLTIsinthePeriodx1,000,000/Totalpeoplehoursworkedfortheperiod2AllInjuryFrequencyRate(“AIFR”)=Numberof(LTI+RestrictedWorkInjury+MedicalTreatedInjury+FirstAidInjury)intheperiodx1,000,000/Totalpeoplehoursworkedfortheperiod3“NonOperations”includesCorporate,KalanaandExploration

Duringthequarter,theCorporationcontinueditsmalariapreventionprogramsacrossitssites.Actionsincludeindoorresidualspraying, regular fogging, awareness campaigns andapplicationof larvicide in stagnantwateron site. TheHoundéminehasseenparticularlyencouraging results fromtheirpreventionprogram,withonly24cases inH1-2020comparedto136 for thesame period last year. At Ity, a pilot community malaria program commenced during the quarter. Alongside communityeducation and the establishment of hygiene and mosquito control committees, community members are being trained toconductindoorsprayinginthelocalcommunitiessurroundingthemine.Approximately3,000housesineightvillageshavebeensprayedinthefirstphase.

NewESGReportingFrameworkAdopted–TheResponsibleGoldMiningPrinciples

TheRGMPswerelaunchedbytheWorldGoldCouncil,theindustrybodyresponsibleforstimulatingandsustainingdemandforgold, to reflect the commitment of the world’s leading gold producers to responsible mining. The RGMPs provide acomprehensive reporting framework that sets out clear expectations as towhat constitutes responsible goldmining to helpprovideconfidencetoinvestors,supplychainparticipantsandultimately,consumers.MembercompanieswillhaveuptothreeyearstofullycomplywiththeRGMPsandwillberequiredtoobtainexternalassuranceontheirperformanceandconformancetotheRGMPs.

The RGMPs consist of ten umbrella principles and 51 detailed principles, which cover key ESG themes, issues and actions.Endeavour has adopted the RGMPs as its primary ESG reporting framework and is targeting full conformance within theCouncil’sthree-yeartimeframe.Aspartofitsimplementationstrategy,Endeavourconductedagapanalysisin2019toidentifythosepolicies,standardsandactivitieswhichalreadyconformtotheRGMPs,aswellasthoseareasthatwillrequireadditionalworkinordertoachieveconformance.

Duringthequarter,EndeavourcommencedimplementingtheRGMPsandreceiveditsfirstexternalassuranceonPrinciple1.7,whichrelatestoaccountabilitiesandreporting.

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RespondingtoClimateChange

BeingresponsiblestewardsoftheenvironmentiscriticaltotheGroup’s long-termsuccess.Endeavourrecognizestheneedtomonitor its energy consumption and efficiency and, where possible, to reduce its carbon footprint. The Group has beenreportingonitsScope1andScope2greenhousegasemissionssince2017.Thisyear,theGroupalsostartedreportingitsScope3emissions.EndeavourhasalsocommencedworkondevelopingonanEmissionsReductionTargetinformedbyclimatescienceanditsspecificoperatingcontextandwillcontinuetoworktoidentifypathwaystoachievement.Duringthequarter,aGroupgreenhousegasemissionsreductionplanwasapproved.Theplancommitsto:

• Establishingasystemtopromotecontinuousimprovement;

• Proactivelymanagingpowergenerationcostsandutilitycontracts;

• Achievingsustainableimprovementsinenergyefficiency;and

• Protectingtheoperations’energysecurityovertheiranticipatedlifeofmine.

Endeavour acknowledges the risks and impacts climate change poses to its business. During the quarter, the Corporationengagedconsultants toassess itscurrentpracticesanddisclosures in relation to theFinancialServicesBoard’sTaskForceonClimate-related Financial Disclosure (“TCFD”) in preparation for augmenting its climate-related disclosure with the TCFDrecommendationsin2021.

LinkingESGPerformancetoCompensationPlans

Thisyear,Endeavourhasaugmenteditsshortandlong-termcompensationplanstoincludeclearlymeasurableESGtargetsinordertoensurefullalignmentacrossthebusiness.For2020,EndeavourhasexpandeditsGrouptargets,whichaffectsannualemployeebonuses,toincludea20%weightingforESG-relatedshort-termtargets.AlongsideasafetytargetofaLTIFRwhichis10%belowthe industrybenchmark, theplanalso includesadiversity targetofachievinga25% increase in femaleemployeerepresentationto10%in2020.

Thelong-termincentiveawardsforexecutiveshavealsobeenaugmentedtoincludea12.5%ESGweightingforthesuccessfulexternalassuranceonall10umbrellaprinciplesand51principlesoftheRGMPs.FulldetailsofthecompensationplanwillbeavailableintheCorporation’smanagementinformationcircularrelatingtoitsAnnualGeneralMeeting,whichwillbepublishedinQ3-2020.

2019SustainabilityReportPublished

During the quarter, Endeavour published an enhanced 2019 Sustainability Report, prepared in accordance with the GlobalReportingInitiativeSustainabilityReportStandards:CoreOption,whichdetailedtheCorporation’sperformanceagainstkeyESGindicatorsin2019.Thefullreportisavailableatwww.endeavourmining.com.

In addition to the Corporation’s update on the implementation of the RGMPs, themain highlights from the Report are asfollows:

• ContinuedstrongsafetyrecordwithreductionsinGroupAIFRandGroupLTIFRby30%and44%,respectively,comparedto2018.

• Distributionof$627.0millionineconomicvaluetohostcountries,including$100.0millionintaxesandroyalties,representing71%ofrevenue.

• In-countryprocurementrepresented67%ofGroupspend,supporting1,144localbusinesses.

• Zerosignificantenvironmentalincidentsinboth2019and2018.

• 22%reductioningreenhousegasemissionintensity(CO2-equivalentperozgoldproduced)over2018.

• WestAfricanGeneralManagersrepresentationincreasedto75%,from25%in2018.

• Therepresentationofwomenintechnicalorsupervisoryrolesincreasedto11%,from5%in2018.

• 95%ofsiteworkforcearenationals,remainingatsimilarlevelsto2018.

4.2. COVID-19RESPONSE

Sincetheoutbreakof theglobalCOVID-19pandemic,Endeavourhas focusedonthewell-beingof itsemployees,contractorsandlocalcommunities,whileensuringbusinesscontinuity.Inaddition,hostgovernmentsinCoted’Ivoire,BurkinaFasoandMalihavetakenstrictandpro-activemeasurestominimizeoverallexposureintheircountries.

Protectingthewell-beingofemployees,contractors,andlocalcommunities

• Endeavourhas implementeda rangeof preventativemeasures across all its sites, including social distancing, healthscreening,augmentedhygieneandrestrictedaccesstosites.

• Endeavour operates in close coordination with the national health authorities and is using the epidemiologicalsurveillancesystemitdevelopedtoassisthostcountries(Coted’Ivoire,BurkinaFasoandMali)withthemonitoringandtrackingofthepandemicinthesecountries.

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• Endeavour’s donations of keymedical equipment and supplies to regional, community and on-sitemedical centerscontinuedduringthequarteracrossallthreecountriesofitsoperations.

• Arangeofcommunityprogramswereimplementedduringthequarterincludingmicro-creditprograms,whichhelptosupportpeopleinhostcommunitieswhoselivelihoodshavebeenimpactedbythepandemic,ande-learningprogramsinBurkinaFasotofacilitateaccesstodistancelearningforstudents.

Businesscontinuityresponseplan

• InearlyMarch2020,EndeavourputinplaceabusinesscontinuityplantomitigatetherisksandpotentialimpactoftheglobalCOVID-19pandemic,whichhasthreelevelsofresponse:

– Level 1,which theGroup is currently operatingunder, involves a rangeof preventativemeasures includingtemperaturechecks,restrictedaccesstosites,socialdistancing, increasedhygienestandardsandmandatoryquarantineperiodsforemployeesarrivingin-country,whileotherwisecontinuingoperationsasnormal.

– Level 2 is designed to be initiated should COVID-19 becomemore prevalent in the countries in which theGroupoperatesandinvolvescomprehensiverestrictionsonmovementintoandoutofthemines.Underthesecircumstances,Endeavour’smineswouldbeisolated,butminingoperationsandtheshipmentofgoldwouldcontinue.

– Level3involvesthefullorpartialsuspensionofminingandprocessingoperations.

• Inaddition,theGrouphasalsotakenanumberofproactivesteps,including:

– Assessingthesupplychainwithafocusonensuringcontinuityofsupplyinarangeofscenarios.Endeavour’sshifttonationalsupplierslocatedwithinhostcountriesoverthepast12monthshasmitigatedtheimpactofclosedborders.

– Toensure that Endeavourwouldhave substantial liquidity and financial flexibility to operateunder variousstress-test scenarios, Endeavour drew down the entirety of its available Revolving Credit Facility (“RCF”) inQ1-2020. Endeavour has now commenced repaying the RCF and expects to continue to reduce the drawnamountduringQ3-2020andQ4-2020.

– EndeavourassesseditsabilitytocurtailitsoperationstoselectivelyminehighergradeorewithlowstripratiosshouldminingactivityneedtobereducedinresponsetoanincreaseinCOVID-19preventionmeasures.

• EachofEndeavour’soperationsarecontinuingtooperateatnormal levelswithgoldshipmentsandsalescontinuing,albeitwithincreasedhealthandsafetymeasuresanddecreasedefficiencies.

• Employeesinarolethatenabledthemtoworkfromhomewereaskedtodoso.TheCompany’scloud-basedstrategyensuredthatemployeescouldaccessalltherelevantapplications,systemsandcollaborationtoolsthattheyneededtoperform their duties. In addition, the cyber security responsewas updated and is constantly tracked in light of theincreasedcybersecurityriskgenerallyobservedduringthepandemic.

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4.3. OPERATIONSREVIEW

ThefollowingtablessummarizeoperatingresultsforthethreemonthsendedJune30,2020,March31,2020,andJune30,2019andthesixmonthsendedJune30,2020andJune30,2019.

ItyGoldMine,Côted’Ivoire

Table5:ItyCILKeyPerformanceIndicators


UnitJune30,2020

March31,2020

June30,2019

June30,2020

June30,2019

OperatingDataTonnesoremined kt 1,650 1,909 1,409 3,559 2,523Tonnesofwastemined kt 3,725 3,317 2,460 7,042 4,701Openpitstripratio1 w:o 2.26 1.74 1.75 1.98 1.86Tonnesmilled kt 1,180 1,410 934 2,590 1,191Averagegoldgrademilled g/t 1.59 1.63 2.03 1.61 2.03Recoveryrate % 77 84 90 81 90Goldproduced oz 46,790 61,005 57,503 107,795 66,287Goldsold oz 46,146 63,514 61,989 109,660 61,989FinancialData($'000)Revenues $ 79,419 100,723 82,208 180,142 82,208Miningcosts $ (16,779) (12,381) (13,996) (29,160) (13,996)Processingcost $ (14,116) (16,858) (12,809) (30,974) (12,809)

GeneralandAdministrativeexpenses $ (3,502) (4,315) (5,152) (7,817) (5,152)Capitalizedwaste $ 4,793 1,427 — 6,220 —Inventoryadjustmentsandother $ 122 (3,323) (1,309) (3,201) (1,309)TotalCashCost2 $ (29,482) (35,450) (33,265) (64,932) (33,265)Royalties $ (4,453) (4,763) (3,028) (9,216) (3,028)Sustainingcapital2 $ (2,253) (1,123) — (3,376) —TotalAll-inSustainingCosts2 $ (36,188) (41,336) (36,293) (77,524) (36,293)Non-sustainingcapital2 $ (10,746) (10,947) — (21,693) —All-InMargin2 $ 32,485 48,440 45,915 80,925 45,915

addback:Sustainingandnon-sustainingcapital2 $ 12,999 12,070 — 25,069 —Depreciation/depletion $ (8,466) (10,679) (10,498) (19,145) (10,498)

Non-cashoperatingexpense $ (220) 220 3,143 — 3,143Earningsfrommineoperations $ 36,798 50,051 38,560 86,849 38,560UnitcostanalysisRealizedgoldprice $/oz 1,721 1,586 1,326 1,643 1,326

Openpitminingcostpertonnemined $/t 3.12 2.37 3.62 2.75 3.62Processingcostpertonnemilled $/t 11.96 11.95 13.72 11.96 13.72G&Acostpertonnemilled $/t 2.97 3.06 5.52 3.02 5.52Cashcostperouncesold2 $/oz 639 558 537 592 537MineAll-InSustainingCosts2 $/oz 784 651 585 707 585

1Openpitstripratioincludescapitalwaste.2Non-GAAPmeasure.RefertotheNon-GAAPMeasuressectionforfurtherdetails.

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ItyCILQ22020vsQ12020Insights

• Despite the COVID-19 pandemic, Ity continued to operate at near-normal levels under the Level 1 ResponseEnvironment,asdescribedinSection4.2above.ThemineplanprioritizedbothwasteextractionandthecompletionoftheTSFraiseinQ2-2020whichprovidestheCompanywithincreasedoperationalflexibilityshouldtheminebeforcedto operate under a Level 2 or 3 Response Environmentwhichwould restrict the number of employees on site andreduceminingactivity.

• Productiondecreased as themineplanprioritizedbothwaste extraction and the TSF raisewhich resulted in a sub-optimalprocessedoreblendleadingtoshort-termvariancesinmillthroughput,recoveriesandprocessedgrade.

– Totaltonnesminedremainedflat,howevertonnesoforemineddecreasedby16%asagreaterfocuswasplacedonwasteextraction.MorewastewasextractedattheItypitasaresultofacceleratingthepreviouslyplannedcutback.Inaddition,pre-strippingcommencedattheCollineSudPit,followingachangeinthemineplantoprovidegreateroperationalflexibility.Inadditiontotheoperatingdatapresentedinthetableabove,0.9MtofwastewereminedoutsideofexistingpitstoacceleratetheplannedTSFraise.

– Theprocessedgradedecreasedslightlyasahigherproportionofthemillfeedwassupplementedbythelowergradeoxidestockpilesasminingfocusedonwasteextraction.

– Tonnesmilled decreased due to lowermill availability driven by longermaintenance shutdowns related toCOVID-19 (more time required to get technicians and spare parts on site), however throughput remainedwithin5%ofthenominalplantcapacitythroughput.

– Recoveryratesreduced,asexpected,duetogreaterquantitiesof transitionalandfreshoreprocessedfromDaapleuwithassociatedlowerrecoveries.

• AISC increaseddue to lowerouncesof gold sold,higher royalty rates, ahigher strip ratio, lower recovery rates andhigherunitminingcosts.

– Mining unit costs increased from $2.37 to $3.12 per tonne mined due to the higher drill and blast andequipmentmaintenancecostsassociatedwithmininganincreasedproportionoffreshmaterial.

– Processingunitcostsremainedbroadlyflat,despitegreaterdowntimeandlowermillthroughput.– Sustainingcapitalincreasedfrom$1.1millionto$2.3millionforthequarterduetothechange-outonheavy

miningequipment.

• Non-sustainingcapitalremainedflat.Q2-2020includesacceleratedwastecapitalizationforthenewCollineSudpitaswellastheTSFraisewhichwascompletedwithinthesameperiod.

H12020vsH12019Insights

• ProductionincreasedastheItyCILplantoperatedforthefullsixmonthperiodinH1-2020comparedtohalftheperiodinH1-2019astheplanthaditsfirstgoldpourinMarch2019withcommercialproductiondeclaredonApril8th2019.AISCincreasedasguidedduetominingatdeeperelevationsandincreasedsustainingcapitalrelatedtothecomponentchange-outassociatedwithheavyminingequipment.

H22020Outlook

• Ityisexpectedtoachievethebottomendofitsfullyear2020productionguidancerangeofbetween235,000-255,000ouncesandthetopendofitsAISCguidanceof$630-$675perounce.

• PlantfeedinH2-2020isexpectedtobesourcedprimarilyfromtheDaapleupit,whilecontinuingtobesupplementedbyorefromtheItypitandlowergradehistoricheapdumps.Asinitiallyguided,theproportionoffreshoreisexpectedtoremainhighfortheremainderoftheyearasthepitsbecomedeeperwhilstprocessedgradesandrecoveryratesareexpectedtoremainstable.

• Sustainingcapital spend forFY-2020 isexpected toamount toapproximately$8.0million (ofwhich$3.4millionhasbeenincurredinH1-2020),anincreasecomparedtotheinitialFY-2020guidanceof$4.0millionduetoincreasedwasteextractionfollowingthechangeinthemineplan.

• Non-sustainingcapitalspendforFY-2020isexpectedtoamounttoapproximately$35.0million(ofwhich$21.7millionhas been incurred in H1-2020), an increase compared to the initial FY-2020 guidance of $26.0 million as theinfrastructureandriverdiversionworkfortheLePlaquehighgradedeposit,whichwasoriginallyplannedfor2021,isnowexpectedtobebroughtforwardgiventhehighconfidenceinobtainingaminingpermitinthecomingmonthsandtheexpectedpositiveimpactofthisdeposit.

ExplorationActivities

• Anexplorationprogramofupto$14.0milliontotalingapproximately100,000metershasbeenplannedfor2020,withtheaimofgrowingtheLePlaque,Bakatouo,andDaapleudeposits,andtestingothertargetssuchasFloleuandSamuel.

• InH1-2020,$12.0millionwasspent,comprisedofnearly85,000metersdrilled,witheightrigsactiveoverthegreaterItyarea.ThemajorityofdrillingwasfocusedontheLePlaqueareaandonnear-milltargetssuchasVerseWestandLeachpadandDaapleuSW.

• As announcedon July 7, 2020, drilling has resulted in a 43% increase in Le Plaque’s Indicated resource estimate to689,000ounces.Inaddition,severalothernearbytargetshavealsobeenidentified.Atleast15,000metersofdrillingareplannedfortheremainderof2020.Followingtherecentresourceaddition,theupdatedLePlaquereserveestimateisexpectedtobepublishedinQ3-2020andintegratedintotheItymineplan.

11

HoundéGoldMine,BurkinaFaso

Table6:HoundéKeyPerformanceIndicators


UnitJune30,2020

March31,2020

June30,2019

June30,2020

June30,2019

OperatingData:

Tonnesoremined kt 1,072 900 917 1,972 1,686

Tonnesofwastemined kt 10,437 10,411 8,225 20,848 16,857

Openpitstripratio1 w:o 9.73 11.57 8.97 10.57 10.00

Tonnesmilled kt 1,035 1,066 1,043 2,101 2,076

Averagegoldgrademilled g/t 1.91 1.76 1.88 1.83 1.84

Recoveryrate % 92 91 93 91 93

Goldproduced oz 57,444 55,860 58,232 113,304 113,592

Goldsold oz 57,431 56,671 54,255 114,102 113,830

FinancialData($'000)

Revenues $ 100,190 88,836 71,013 189,026 148,516

Miningcosts $ (24,718) (25,445) (19,563) (50,163) (38,538)

Processingcost $ (14,808) (13,311) (13,502) (28,119) (26,229)

GeneralandAdministrativeexpenses $ (4,740) (3,401) (6,577) (8,141) (13,060)

Capitalizedwaste $ 9,783 11,845 5,928 21,628 9,199

Inventoryadjustmentsandother $ (1,786) (11,827) 26 (13,613) (3,066)

TotalCashCost2 $ (36,269) (42,138) (33,687) (78,408) (71,695)

Royalties $ (8,025) (7,105) (4,470) (15,130) (9,743)

Sustainingcapital2 $ (11,117) (11,774) (7,223) (22,891) (10,494)

TotalAll-InSustainingCosts2 $ (55,411) (61,016) (45,381) (116,429) (91,932)

Non-sustainingcapital2 $ (5,750) (1,815) (3,191) (7,565) (9,295)

All-InMargin2 $ 39,029 26,005 22,441 65,032 47,289

addback:Sustainingandnon-sustainingcapital2 $ 16,867 13,589 10,414 30,456 19,789

Depreciation/depletion $ (13,726) (16,403) (16,243) (30,129) (31,920)

Non-cashoperatingexpense $ (35) 35 — — —


Unitcostanalysis

Realizedgoldprice $/oz 1,745 1,568 1,309 1,657 1,305

Openpitminingcostpertonnemined $/t 2.15 2.25 2.14 2.20 2.08

Processingcostpertonnemilled $/t 14.31 12.49 12.95 13.39 12.63

G&Acostpertonnemilled $/t 4.58 3.19 6.31 3.88 6.29

Cashcostperouncesold2 $/oz 632 744 621 687 630

MineAll-InSustainingCosts2 $/oz 965 1,077 836 1,020 8081Stripratioincludescapitalwaste.2Non-GAAPmeasure.RefertotheNon-GAAPMeasuressectionforfurtherdetails.

12

Q22020vsQ12020Insights

• Despite the COVID-19 pandemic, Houndé continued to operate at near-normal levels under the Level 1 ResponseEnvironment,asdescribeinSection4.2above.GiventheflexibilityavailablewithintheHoundémineplan,notablyduetotheslightlyearlierthanexpectedreceiptoftheminingpermitforthehighgradeKariPumpdeposit,aportionoftheinitially scheduledwastecapitalizationactivitywasdelayed to later in theyear.As such,Houndé’sperformancewasbetterthaninitiallyanticipated.

• Productionincreasedslightlyashigherprocessedgradesandaslightlybetterrecoveryratemorethanoffsettheslightlylowerthroughput.

– Tonnesoforemined increasedduetothe loweroverallstripratioasscheduledwastecapitalizationactivitywasdelayedto later in theyear.OrewasmainlysourcedfromtheVindalooCentralandBouérépits,whichhavealowerstripratio,andsupplementedbyorefromtheVindalooMainandVindalooNorthpitswhichhaveaslightlyhigherstripratio.

– Tonnes milled reduced slightly, however continued to perform well above nameplate, as the ore blendcontinuedtobemainlyfresh.

– ProcessedgradesincreasedasthestrongwastecapitalizationatVindalooCentralduringthepreviousquarterprovidedaccess tohighgradeore. Inaddition, less lowgradestockpileswereusedtosupplementmill feedgiventheincreasedminingactivity.

– Recoveryratesincreasedslightlybasedontheoreblendcharacteristics.

• AISCdecreasedmainlyduetoslightlyhighersalesvolumesandlowerminingunitcostswhichmorethanoffsethigherroyaltiesandhigherprocessingandG&Aunitcosts.

– Mining unit costs decreased slightly from $2.25 to $2.15 per tonne due to lower production drilling andblastingactivitiesrequiredfortheoxidizedoreminedattheVindalooCentralpit.

– Processingunitcostsincreasedfrom$12.49to$14.31pertonnedrivenbyincreasedreagentcosts.– Sustainingcapitaldecreasedslightlyfrom$11.8millionto$11.1millionduetothechangeinthemineplan.

• Non-sustaining capital increased from $1.8 million to $5.8 million with the Q2-2020 spend mainly comprised ofcompensationandresettlementfortheKariPumparea,aswellasaTSFraise.


• Production remained steady as increased tonnes milled offset the lower recovery rate while processed gradesremainedflat.AISCincreasedasexpectedduetohighersustainingwastecapitalization,higherroyaltycostsandashifttominingandprocessingahigherproportionofharderfreshore.

H22020Outlook

• WiththerecentreceiptoftheKariPumpminingpermit,Houndéisexpectedtoachievethetopendofitsfullyear2020productionguidancerangeof230,000-250,000ouncesandthebottomendofitsAISCguidancerangeof$865—$895perounce.

• HighergradematerialisplannedtobeprocessedinthesecondhalfoftheyearwithmillfeedfromVindalooMainandCentralsupplementedbyKariPump,whichwillberampedupinQ4-2020.

• The overall expected capital spend for FY-2020 is expected to remain unchanged at $59.0 million (of which $30.5millionwasincurredinH1-2020).Sustainingandnon-sustainingcapitalspendsforFY-2020areexpectedtoamounttoapproximately$49.0millionand$10.0million,respectively.

Exploration

• Anexplorationprogramof$11.0milliontotalingapproximately94,000metershasbeeninitiallyplannedfor2020,withtheaimofdelineatingadditionalresourcesintheKariareaandattheVindalooSouthandVindalooNorthtargets. Inaddition,othertargetssuchasDohounandSia/Sianikouiareexpectedtobetested.

• InH1-2020,over73,000metersweredrilledwithupto11rigsactive.Ofthemeterscompleted,over44,000metersweredrilledforgeotechnicalandmetallurgicalpurposesatKariWest,KariCentreandKariGap,andsterilizationandgrade control at Kari Pump. The majority of remaining drill meters focused on the Kari area along with smallreconnaissance drill campaigns at Sianikoui, Mambo and Marzipan which provided positive initial results. A newmineralizedareawasdiscovered,namedKariGap,whichistheextensionoftheKariCenterMainarea.

• An updated resource estimate, incorporating 554,000 additional Indicated ounces for the entire Kari area, waspublishedinearlyQ3-2020.AreserveestimateupdateisexpectedtobereleasedinQ3-2020,whichwillincludemaidenreserves for KariWest andwill be followed by the publication of an updatedmine plan for Houndé. In addition, asecondreserveestimateupdateisexpectedtobepublishedinQ4-2020toincludeKariCenterMainandKariGap.

13

AgbaouGoldMine,Côted’Ivoire

Table7:AgbaouKeyPerformanceIndicators


UnitJune30,2020

March31,2020

June30,2019

June30,2020

June30,2019

OperatingData

Tonnesoremined kt 659 757 564 1,416 1,015



Tonnesmilled kt 675 732 644 1,407 1,365

Averagegoldgrademilled g/t 1.14 1.31 1.75 1.23 1.58


Goldproduced oz 24,437 27,460 34,558 51,897 66,391

Goldsold oz 25,067 27,423 34,411 52,490 68,122


Revenues $ 43,503 43,581 45,108 87,084 89,156

Miningcosts $ (14,502) (17,129) (15,786) (31,631) (31,455)

Processingcost $ (5,989) (5,196) (5,152) (11,185) (10,439)


Capitalizedwaste $ 1,292 5,570 2,225 6,862 9,259

Inventoryadjustmentsandother $ 1,448 674 (1,090) 2,122 (1,516)

TotalCashCost2 $ (20,080) (18,312) (22,892) (38,392) (40,327)

Royalties $ (2,464) (2,333) (1,711) (4,797) (3,415)


TotalAll-inSustainingCosts2 $ (23,930) (26,080) (27,116) (50,011) (53,558)

Non-sustainingcapital2 $ (316) (134) (2,602) (450) (5,126)

All-InMargin2 $ 19,257 17,367 15,391 36,624 30,473



Non-cashoperatingexpense $ — — — — —


Unitcostanalysis



Processingcostpertonnemilled $/t 8.88 7.10 8.00 7.95 7.65

G&Acostpertonnemilled $/t 3.45 3.05 4.79 3.24 4.53


MineAll-InSustainingCosts2 $/oz 955 951 788 953 7861Stripratioincludescapitalwaste2Non-GAAPmeasure.RefertotheNon-GAAPMeasuressectionforfurtherdetails.

14


• Despite the COVID-19 pandemic, Agbaou continued to operate at near-normal levels under the Level 1 ResponseEnvironment,asdescribeinSection4.2above,withnomaterialchangestoitsmineplanrequired.

• Productiondecreasedduetoloweraverageprocessedgradesandthroughputwhilerecoveryratesremainedflat.

– Totaltonnesmineddecreasedduetobothfewertonnesoforeminesandaloweroverallstripratio.MiningwasfocusedonthedeeperelevationoftheNorthandSouthpits.Tonnesoforemineddecreasedmainlydueto the impact of higher rainfall and lower equipment productivity asmining focused on the freshmaterialzones.

– Tonnesmilleddecreasedduetotheplannedhigherproportionoffreshoreintheblend.

– ProcessedgradesdecreasedasaresultofhighertonnagefromthelowergradeSouthpitandtheuseoflowgradestockpilestosupplementtheplantfeed.

– Recoveryratesremainedflat.

• The AISC remained flat as lower sustaining capital spend offset higher unit mining, processing and G&A costs andincreasedroyalties.

– Mining unit costs increased from $2.66 to $2.76 per tonnemined due tominingmore freshmaterial at adeeperelevationintheNorthandSouthpits.

– Processingunitcostsincreasedfrom$7.10to$8.88pertonnemainlyduetolowertonnesmilledandagreaterproportionoffreshoreintheblend.

– Sustaining capital costs decreased from $5.4 million to $1.4 million primarily due to the lower capitalizedwaste.

• Non-sustainingcapitalremainedlow,marginallyincreasingfrom$0.1millionto$0.3million.


• Asguided,productiondecreasedduetolowergradeswhichwereslightlyoffsetbyhigherplantthroughput.• AISCincreasedasaresultoflowerouncessoldandhigherroyalties,unitminingcostsandprocessingcosts,whichwere

offsetbylowersustainingcapitalandG&Aunitcosts.

H22020Outlook

• Agbaou isexpected toachieve thebottomhalfof its full year2020productionguidance rangeof115,000—125,000ouncesandthemiddleofitsAISCguidancerangeof$940—$990perounce.

• MiningisexpectedtocontinueprincipallyintheNorthandSouthpitswithcontributionsfromtheWestpitceasinginthesecondhalfoftheyear.Throughputandrecoveryratesareexpectedtodecreaseslightlyinthesecondhalfoftheyear as greater volumes of harder fresh ore are expected to be processed. The average grade milled is howeverexpectedtoincreasethroughoutthesecondhalfoftheyear.

• Sustainingandnon-sustainingcapitalspendsforFY-2020remainunchangedcomparedtotheinitialguidance,andareexpectedtoamounttoapproximately$17.0millionand$1.0million,respectively.


• Anexplorationprogramof up to $2.0millionhas beenplanned for 2020with the aimof continuing to test targetslocatedalongextensionsofknowndepositsandonparalleltrends.

• MinimalworkwasdoneinH1-2020astheCôted'IvoireexplorationeffortswereconcentratedonItyandFetekro.

15

KarmaGoldMine,BurkinaFaso

Table8:KarmaKeyPerformanceIndicators


UnitJune30,2020

March31,2020

June30,2019

June30,2020

June30,2019

OperatingData:

Tonnesoremined kt 1,288 1,229 1,057 2,517 1,891



Tonnesoforestacked kt 1,238 1,114 1,047 2,352 2,142

Averagegoldgradestacked g/t 0.81 1.02 0.86 0.91 0.77


Goldproduced: oz 20,327 27,568 21,006 47,895 43,119

Goldsold: oz 21,184 26,946 20,093 48,130 43,469


Revenues2 $ 29,973 36,762 21,042 66,735 45,315

Miningcosts $ (11,427) (11,738) (11,954) (23,165) (23,239)

Processingcost $ (8,120) (6,841) (7,455) (14,961) (15,512)


Capitalizedwaste $ 1,823 504 6,556 2,327 9,664

Inventoryadjustmentsandother $ 5,091 1,409 (2,294) 6,500 (2,820)

TotalCashCost3 $ (15,312) (19,455) (18,125) (34,768) (38,014)

Royalties $ (2,828) (3,251) (1,822) (6,079) (3,634)

Sustainingcapital3 $ (2,028) (639) (1,087) (2,667) (1,758)

TotalAll-InSustainingCosts3 $ (20,168) (23,346) (21,034) (43,514) (43,407)

Non-sustainingcapital3 $ (3,838) (2,074) (8,681) (5,912) (11,512)

All-InMargin3 $ 5,967 11,343 (8,674) 17,309 (9,604)



Non-cashoperatingincome/(expense) $ 17 696 1,507 713 (3,014)

Earnings/(loss)frommineoperations $ 532 1,084 (8,961) 1,615 (21,866)

Unitcostanalysis

Realizedgoldprice2 $/oz 1,415 1,364 1,047 1,387 1,042


Processingcostpertonnesstacked $/t 6.56 6.14 7.12 6.36 7.24

G&Acostpertonnestacked $/t 2.16 2.50 2.84 2.33 2.85


MineAll-InSustainingCosts3 $/oz 952 866 1,047 904 9991Stripratioincludescapitalwaste.2RevenueandrealizedgoldpricearenetofgoldstreamsalestoFranco/NevadaandSandstorm.3Non-GAAPmeasure.RefertotheNon-GAAPMeasuressectionforfurtherdetails.

16


• Despite the COVID-19 pandemic, Karma continued to operate at near-normal levels under the Level 1 ResponseEnvironment,asdescribeinSection4.2above,withnomaterialchangestoitsmineplanrequired.

• Production decreased despite higher stacker throughput rates due to lower grades stacked, a slight decrease inrecoveryrateandincreasedgoldinthecircuit.

– Totaltonnesminedremainedrelativelyflat.Asguided,ahigherproportionoforeminedwassourcedfromthelowergradeGG1pit.Inaddition,awastestrippingcampaigncommencedattheKaoNorthpit.

– Ore tonnes stacked increased due to the benefit of the recently completed conveyor and stacking systemupgrades.

– ThestackedgradedecreasedduetolowergradeoresourcedfromtheGG1pit.

– Recoveryratesdecreasedslightlyasaportionoftheorestackedwastransitionalmaterial.Inaddition,goldincircuitincreasedduetogoldlockedintheheapwhichisexpectedtoberecoveredintheupcomingquarters.

• TheAISC increased, albeit outperforming guidance,mainly due to increased sustaining capital spend, higher royaltyrates,andincreasedunitprocessingcostwhichwerepartiallyoffsetbylowerunitG&Acosts.

– Miningunitcostsremainedflat.

– Processing unit costs increased from $6.14 to $6.56 per tonne due to higher use of cyanide and cementassociatedwiththelowgradeGG1materialsstacked.

– Sustainingcapitalcosts increasedfrom$0.6millionto$2.0milliondueto increasedcapitalizedwasteattheKaoNorthpit.

• Non-sustainingcapitalspendincreasedfrom$2.1millionto$3.8millionduetosecurityupgradesandvariousprocessplantupgrades.

• AminingcontactwasawardedtoSFTPMiningBFS.A.R.L(“SFTP”),alocalcontractor,inlateQ2-2020.Assuch,KarmasuccessfullytransitionedfromownerminingtocontractminingonJune8,2020.Asapartofthetransition,theminingfleetatKarmaandassociatedsparepartsweresoldtoSFTPfor$12.8million.


• Asguided,productionincreasedduetothehigherthroughputrateandgradestacked.• AISCdecreasedasaresultofhigherouncessold,lowerunitprocessingandG&Acostsandalowerstripratio.

H22020Outlook

• Karma is expected to achieve thebottomendof its full year 2020production guidance rangeof 100,000 - 110,000ouncesandthemiddleofitsAISCguidancerangeof$980-$1,050perounce.

• MiningactivityisexpectedtocontinueattheKaoNorthpitandGG1throughouttheremainderoftheyear.ProcessedgradesareexpectedtoincreaseinthelatterportionoftheyearasproductionfromGG1increases.Tonnesstackedareexpectedtoremainfairlystableoutsideoftherainyseason.Recoveryratesareexpectedtodeclineslightlythroughouttheyearastheproportionoftransitionaloreincreases,whilegold-in-circuitisexpectedtoberecovered.

• Sustainingcapital spend forFY-2020 isexpected toamount toapproximately$9.0million (ofwhich$2.7millionhasbeen incurred inH1-2020), adecrease compared to the initial FY-2020guidanceof$13.0milliondue to lessminingmaintenancerequiredfollowingthetransfertocontractmining.

• Non-sustainingcapitalspendforFY-2020isexpectedtoamounttoapproximately$9.0million(ofwhichall$5.9millionhasbeen incurred inH1-2020), an increase compared to the initial FY-2020guidanceof$5.0milliondue toprocessplantupgrades.


• An exploration program of up to $2.0million has been planned for 2020with the aim of in-fill drilling and testingextensionsofknowndeposits.

• Minimal work has been done in H1-2020 as the Burkina Faso exploration efforts were focused on the numerousHoundéexplorationtargets.

17

4.4. PROJECTSUPDATE

• Whilethemainfocusfor2020iscashflowgeneration,EndeavouriscontinuingtobuildoptionalitywithinitsportfoliobyadvancingstudiesandconductingexplorationonboththeFetekroandKalanaprojects.

• Studies are underway with the aim of publishing a Preliminary Economic Assessment (“PEA”) on Fetekro and aPreliminaryFeasibilityStudy(“PFS”)onKalanaduringH2-2020.

• At Fetekro, an exploration program of up to $6.0 million had been budgeted for 2020, which has already beenexceededwith approximately$8.0million spent inH1-2020. Theprogrammainly focusedon the Lafiguédeposit, inadditiontoinitialdrillingontheIguelatarget.AnupdatedLafiguédepositresourceestimateisplannedtobepublishedinQ3-2020.

• AtKalana,anexplorationbudgetofupto$2.0millionhasbeenplannedfor2020tofollow-uponnearbytargets,withtheprogramexpectedtobeconductedinH2-2020.

• OncethesestudiesonFetekroandKalanaarepublished,EndeavourwillbebetterpositionedtodecidewhichprojecttoprioritizeandadvancetoFeasibilitystage.

Explorationactivities

• TheH1-2020Groupexploration spendwas $36.0million, comprising of 234,866meters drilled.Details by asset areprovidedintheminesectionsabove.

• ThemainareasoffocusinH1-2020wereHoundéandItynear-mineexploration,aimedatextendingtheirminelivestobeyond10years,andFetekrowiththeaimaddingoptionalitytoEndeavour’sprojectpipeline.

• H1-2020greenfieldexplorationspend includesa5,000-meterdrillingcampaignontheTanda/Bondoukouproperty inCôted’Ivoirewhichhasyieldedpositiveresults.

18

5.OUTLOOK

5.1. 2020OUTLOOK:PRODUCTIONANDAISC1GUIDANCEMAINTAINEDDESPITECOVID-19

• As presented in the tables below, Endeavour is maintaining its FY-2020 production and AISC1 guidance. The CompanyexpectstomitigatetheimpactoftheCOVID-19pandemicduetothehighergradeprofileexpectedinH2-2020.

• EndeavourisalsomaintainingSEMAFO'sproductionandAISC1guidanceonManaandBoungouandthereforeexpectsthefullyearProFormaGroupproductiontoamountto995,000—1,095,000ouncesin2020atanAISC1of$865—915perounce.TheGroupconsolidatedamountswillbebasedonproductionandAISC1commencingJuly1,2020,fortheSEMAFOacquiredassets.

• ProFormaGroupproductionisexpectedtobehigherandAISC1lowerduringthesecondhalfoftheyear,notablyduetotheminingofthehigher-gradeKariPumpdepositatHoundéandtherestartofminingactivitiesattheBoungoumine.Moredetailsontheupdatedindividualmineguidanceandoutlookhavebeenprovidedintheabovesections.

• Endeavour expects stronger cash flow generation in the second half of the year due to higher production, lower non-sustainingspend,lowerexplorationspend,thebenefitofhighergoldpricesandtheexpiryofitsgoldcollarprogram(withacapof$1,500perounceforhalfitsproduction)attheendofJune2020.

Table9:GuidanceSummary

ENDEAVOUR SEMAFO PROFORMAProduction,Koz 680 — 740 315 — 355 995 — 1,095AISC,$/oz1 845 — 895 895 — 960 865 — 915

Table10:DetailedProductionGuidance

(Allamountsinkoz,ona100%basis) H1-2020 REVISED2020GUIDANCE

Agbaou 52 115 — 125ItyCIL 108 235 — 255Karma 48 100 — 110Houndé 113 230 — 250Mana 97 185 — 205Boungou 61 130 — 150PROFORMAPRODUCTION2 479 995 — 1,095

Table11:DetailedAISC1Guidance

(AllamountsinUS$/oz) H1-2020 REVISED2020GUIDANCEAgbaou 953 940 — 990ItyCIL 707 630 — 675Karma 904 980 — 1,050Houndé 1,020 865 — 895Mana 1,137 1,050 — 1,120Boungou 635 680 — 725CorporateG&A 36 30Sustainingexploration — 5

PROFORMAAISC2 942 865 — 915

1Thisisanon-GAAPmeasure.Refertothenon-GAAPmeasuresectionoftheMD&AforEndeavourandrefertothenon-IFRSmeasuresnoteinthispressreleaseforSEMAFO.2EndeavourbelievesthatoperatingandfinancialfiguresforSEMAFOarerepresentativeoftheperiodendedJune30,2020astheTransactionclosedonJuly1,2020. Figures presentedanddisclosed relating to SEMAFOoperations represent classifications and calculations performedusing consistent historical SEMAFOmethodologies. Potential variances to existing Endeavour classifications and calculationmethodologiesmay result in adjustments affecting results. Potentialdifferencesmay include, but not limited to, classification of corporate costs and operating expenses, classification ofmining, processing, and siteG&A costs,classificationofcapitalizedwasteassustainingandnon-sustaining,valuationofstockpilesandgold incircuit.AccountingtreatmentsandclassificationswillbealignedwithEndeavourmethodologiesandpolicies.ProformainformationhasnotbeenadjustedandiscomprisedofthesimpleweightedaverageofinformationprovidedforeachofEndeavourandSEMAFO.

19

• Theroyaltycost,incorporatedintotheAISC1calculationforEndeavour,hasbeenguidedonagoldpriceofUS$1,350perounce.Aportionofthehigherroyaltiesduetothehighergoldpriceisexpectedtobenettedagainstlowerexpectedfuelcosts.

• Asdetailedinthetablebelow,theFY-2020minesustainingcapitalexpenditure1guidanceforEndeavour'sminesisexpectedtoremainunchangedat$83.0millionasanincreaseatItyisexpectedtobeoffsetbyadecreaseatKarma.WhilethenominalamountforH2-2020ishigherthanthatofH1-2020,duetohigherexpectedproduction,itisexpectedtoremainsimilaronaperouncebasis.

• EndeavourisalsomaintainingSEMAFO'ssustainingcapitalexpenditure1guidanceonManaandBoungou,andthereforeexpectstheFY-2020ProFormaGroupamounttostandat$163.0million.Moredetailsonindividualminecapitalexpenditureshavebeenprovidedintheabovesections.

Table12:MineCapitalSustainingExpenditure1Guidance

(AllamountsinUS$m)H2-2020GUIDANCE

H1-2020ACTUAL

2020FULL-YEARGUIDANCE

Agbaou 10 7 17Ity 5 3 8Karma 6 3 9Houndé 26 23 49ENDEAVOURMINES 47 36 83Mana 41 29 70Boungou 9 1 10PROFORMA2 98 65 163

• As detailed in the table below, the FY-2020 non-sustainingmine capital expenditure1 guidance for Endeavour'smines isexpectedtoincreasefrom$42.0million(asperinitialguidance)to$55.0million.TheincreasesareatItywheretheaimistocommence the infrastructurework for the Le Plaque high grade deposit whichwas originally planned for 2021, and atKarmadue to thecapitalalready incurred inH1-2020.TheFY-2020non-sustainingminecapitalexpenditure1wasmainlyH1-2020weighted,withonly35%oftheremainingcapitalspendtobeincurredinthesecondhalfoftheyear.

• EndeavourismaintainingSEMAFO'snon-sustainingcapitalexpenditure1guidanceonManaandBoungou,andthereforeexpectstheFY-2020ProFormaGroupamounttostandat$60.0million.Moredetailsonindividualminecapitalexpenditureshavebeenprovidedintheabovesections.

Table13:MineCapitalNon-SustainingExpenditure1Guidance


H1-2020ACTUAL

2020FULL-YEARGUIDANCE

Agbaou 1 0 1Ity 13 22 35Karma 3 6 9Houndé 2 8 10ENDEAVOUR 19 36 55Mana 2 0 2Boungou 2 1 3PROFORMA2 23 37 60

1Thisisanon-GAAPmeasure.Refertothenon-GAAPmeasuresectionoftheMD&AforEndeavourandrefertothenon-IFRSmeasuresnoteinthispressreleaseforSEMAFO.2EndeavourbelievesthatoperatingandfinancialfiguresforSEMAFOarerepresentativeoftheperiodendedJune30,2020astheTransactionclosedonJuly1,2020. Figures presentedanddisclosed relating to SEMAFOoperations represent classifications and calculations performedusing consistent historical SEMAFOmethodologies. Potential variances to existing Endeavour classifications and calculationmethodologiesmay result in adjustments affecting results. Potentialdifferencesmay include, but not limited to, classification of corporate costs and operating expenses, classification ofmining, processing, and siteG&A costs,classificationofcapitalizedwasteassustainingandnon-sustaining,valuationofstockpilesandgold incircuit.AccountingtreatmentsandclassificationswillbealignedwithEndeavourmethodologiesandpolicies.ProformainformationhasnotbeenadjustedandiscomprisedofthesimpleweightedaverageofinformationprovidedforeachofEndeavourandSEMAFO.

20

• FY-2020growthcapitalspendisexpectedtoamounttoapproximately$12.0million,aslightincreaseof$2.0millionfromtheinitialFY-2020guidanceof$10.0million,mainlyduetostudiesinprogressonKalanaandFetekro.

• Roughly85%ofEndeavour'sFY-2020explorationexpenditureguidanceamountwasincurredinH1-2020aheadoftherainyseason.As shown in the tablebelow, thePro FormaFY-2020exploration spend is expected to amount to$45.0 - $50.0million,inclusiveoftheSEMAFOassets.

Table14:ExplorationGuidance


H1-2020ACTUAL

FULL-YEAR2020GUIDANCE

Endeavourassets 4-9 36 40-45SEMAFOassets 5 n.a 5PROFORMA1 9-14 36 45-50

1EndeavourbelievesthatoperatingandfinancialfiguresforSEMAFOarerepresentativeoftheperiodendedJune30astheTransactionclosedonJuly1,2020.Figures presented and disclosed relating to SEMAFO operations represent classifications and calculations performed using consistent historical SEMAFOmethodologies. Potential variances to existing Endeavour classifications and calculationmethodologiesmay result in adjustments affecting results. Potentialdifferencesmay include, but not limited to, classification of corporate costs and operating expenses, classification ofmining, processing, and siteG&A costs,classificationofcapitalizedwasteassustainingandnon-sustaining,valuationofstockpilesandgold incircuit.AccountingtreatmentsandclassificationswillbealignedwithEndeavourmethodologiesandpolicies.ProformainformationhasnotbeenadjustedandiscomprisedofthesimpleweightedaverageofinformationprovidedforeachofEndeavourandSemafo.

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6. RESULTSFORTHEPERIOD

6.1. STATEMENTOFCOMPREHENSIVE(LOSS)/EARNINGS

Table15:StatementofComprehensive(Loss)/Earnings


($'000s)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Revenue 253,084 269,902 219,371 522,986 370,681

Operatingexpenses (103,308) (114,403) (103,318) (217,711) (191,681)

Depreciationanddepletion (43,760) (52,529) (51,970) (96,289) (88,102)

Royalties (17,771) (17,452) (11,032) (35,223) (20,021)

Earningsfrommineoperations 88,245 85,518 53,051 173,763 70,877

Corporatecosts (5,049) (5,231) (5,143) (10,280) (11,204)

Acquisitionandrestructuringcosts (2,589) (4,330) — (6,919) —

Share-basedcompensation (4,942) (1,623) (4,385) (6,565) (6,985)

Explorationcosts (1,796) (1,333) (1,674) (3,129) (6,035)

Earningsfromoperations 73,869 73,001 41,849 146,870 46,653

Lossonfinancialinstruments (71,931) (3,492) (11,757) (75,423) (10,634)

Financecosts (11,982) (11,662) (12,386) (23,644) (17,305)

Other(expenses)/income (1,791) 1,935 4,574 144 4,377

(Loss)/Earningsbeforetaxes (11,835) 59,782 22,280 47,947 23,091

Currentincometaxexpense (2,313) (23,699) (13,845) (26,012) (27,323)

Deferredincometaxexpense (8,468) (620) (1,531) (9,088) (307)

Netandcomprehensive(loss)/earnings (22,616) 35,463 6,904 12,847 (4,539)

ReviewofresultsforthethreeandsixmonthsendedJune30,2020:

• RevenuesforQ2-2020were$253.1millionand$523.0millionH1-2020,comparedto$219.4millionand$370.7millioninthesameperiodof2019.TheincreaseinQ2-2020andH1-2020isdrivenbyahigherrealizedgoldprice.RevenueforH1-2020benefitedfromincreasedproductionmainlyduetothecommencementofcommercialproductionoftheItyCILprocessingfacilityonApril8,2019.

• OperatingexpensesforQ2-2020were$103.3millionand$217.7millionforH1-2020,comparedto$103.3millionand$191.7million in the sameperiod in 2019. Theupward trend inH1-2020 compared toH1-2019 is due to a full sixmonthsof costs recognized at Ity CIL processing facility in 2020 compared to threemonths in 2019 as commercialproductionbeganonApril8,2019.

• DepreciationanddepletioninQ2-2020were$43.8millionand$96.3millionH1-2020,comparedto$52.0millionand$88.1million in the comparative period for 2019. Depreciation and depletion increased in H1-2020 by $8.2millioncomparedtoH1-2019mainlyduetoahigherdepreciationchargefromincreasedunitsofproductionatItyCILassetsinH1-2020comparedtoH1-2019.

• Corporate costswere $5.0million for Q2-2020 and $10.3million for H1-2020, compared to $5.1million and $11.2millioninthecomparativeperiodsfor2019.Theslightdecreaseoverthecomparativeperiodisduetotherealizationofcorporatesavingsinitiatives.

• Acquisitionandrestructuringcostof$2.6millionforQ2-2020and$6.9millionforH1-2020andismadeupofadvisoryfeesrelatedtotheproposedSEMAFOacquisitioninQ2-2020andpreviousengagementwiththeboardofCentaminplcinQ1-2020.

• Sharebasedcompensationwas$4.9millioninQ2-2020and$6.6millioninH1-2020,comparedto$4.4millionand$7.0millioninthesameperiodsfor2019.TheslightdecreaseinH1-2020isduetoadjustmenttothefairvalueofthePSUsintoearningsoverthetermsofthepreviouslygrantedPSUs.

• Thelossonfinancialinstrumentswas$71.9millioninQ2-2020and$75.4millionH1-2020,comparedtoalossof$11.8millionandalossof$10.6millioninthesameperiodsin2019.ThelossinH1-2020ismainlyduetothenetimpactoflossesonthegoldrevenueprotectionprogramof$21.2million,realizedlossesonconvertibleseniorbondderivativeof

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$61.2 million due to the increase in Endeavour share price, offset by a realized gain on a forward contract of$6.7million.

• Financecostswere$12.0millionforQ2-2020and$23.6millionH1-2020,comparedto$12.4millionand$17.3millioninthesameperiodin2019.FinancecostsareprimarilyassociatedtointerestexpenseontheRCFandconvertibledebt.

• Current income tax expensewas$2.3million inQ2-2020and$26.0millionH1-2020 compared to $13.8million and$27.3millioninthesameperiodof2019.IncometaxexpenseforH1-2020includedan$6.7millioncurrentincometaxaccrual for Agbaou 2020 performance to date. At Ity, $14.5 million of income tax has been accrued for2020performancetodate.A$13.1millionincometaxaccrualfor2020performancewasrecognizedatHoundéwhichwasoffsetbya$4.1millionincometaxaccrualrecoveryrelatingto2019asaresultofthefinalizationofprioryeartaxreturns.AtKarma,a$4.3millionincometaxrecoveryrelatingto2019offsetthetotalgroupincometaxexpense.

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6.2. CASHFLOW

ThefollowingtablereconcilestheAISCmargin,andall-inmargintothequarterlychangeincash.

Table16:FreeCashFlow1


($'000sexceptgoldproducedandouncessold) UnitJune30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Goldproduced oz 148,998 171,893 171,299 320,891 292,090

Goldouncessold oz 149,828 174,554 170,749 324,382 291,624


Revenue $ 253,084 269,902 219,371 522,986 370,681

Totalcashcosts $ (101,143) (115,355) (107,967) (216,498) (187,675)

Royalties $ (17,771) (17,452) (11,032) (35,223) (20,021)

Corporatecosts $ (5,049) (5,231) (5,143) (10,280) (11,204)


All-inSustainingMargin1 $ 112,337 112,892 84,406 225,229 129,713

Less:Non-sustainingcapital1 $ (22,109) (17,720) (17,232) (39,829) (28,690)

Less:Non-sustainingexploration1 $ (17,346) (15,146) (21,392) (32,492) (32,902)

All-InMargin1 $ 72,882 80,026 45,782 152,908 68,121

Changesinoperatingworkingcapitalandlong-termassets $ (27,994) 8,811 2,418 (19,184) (28,658)

Taxespaid $ (20,148) (8,524) (29,569) (28,672) (31,234)

Interestpaid,financingfeesandleaserepayment $ (15,862) (20,406) (20,548) (36,268) (33,334)

Cashsettlementsonhedgeprograms,goldcollarpremiums $ (16,754) (497) (802) (17,251) (937)

Netfreecashflow1 $ (7,876) 59,410 (2,719) 51,533 (26,042)

Growthprojects1 $ (2,086) (2,113) (19,601) (4,199) (85,876)

Explorationexpense2 $ (1,796) (1,333) (1,674) (3,129) (6,036)

M&A,restructuringandassetsales/purchases $ 9,215 (9,760) — (545) (453)

CashpaidonsettlementofDSUsandPSUs $ (7) (214) — (221) (1,125)

Netequity(dividends)/proceeds $ — — 36 — 274

Proceedsoflong-termdebt $ — 120,000 20,000 120,000 80,000

Foreignexchange(losses)/gains $ 981 (1,422) (3,878) (441) (5,454)

Other(expenses)/income $ (3,957) 2,887 1,479 (1,070) (1,634)

Cash(outflow)/inflowfortheperiod $ (5,526) 167,454 (6,357) 161,928 (46,345)1Non-GAAPfinancialperformancemeasureswithnostandardmeaningunderIFRS.RefertotheNon-GAAPMeasuressectionforfurtherdetails.2Explorationexpenseperthestatementofcomprehensive(loss)/earnings.Thiscashoutflowrelatestoexpenditureongreenfieldexplorationactivity.

• GoldsalesdecreasedinQ2-2020comparedtoQ1-2020asaresultof lowerproductionattheIty,KarmaandAgbaoumines.Goldsales increasedinH1-2020comparedtoH1-2019duetohigherproductionfromtheItyminewhichwascommissionedinQ2-2019.

• The realized gold price for H1-2020 was $1,612 per ounce compared to $1,271 per ounce in H1-2019. Both theseamountsincludetheimpactoftheKarmastream,amountingto10,000ouncessoldinH1-2020and10,938inH1-2019,at20%ofspotprices.TherealizedgoldpriceexcludingthegoldstreamatKarma,wouldhavebeen$1,653perounceforH1-2020and$1,311perounceforH1-2019.

• Royaltiesincreasedfrom$100perounceinQ1-2020to$119perounceinQ2-2020.TheH1-2020royaltyratewas$109per ounce, up from $69 per ounce for H1-2019, due to both the higher realized gold price and an increase in theunderlyingroyaltyratebasedontheapplicableslidingscale(aboveaspotgoldpriceof$1,300perounce,government

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royalty rates in Burkina Faso increase from 4.0% to 5.0%, and above a spot gold price of $1,600 per ounce ratesincreasefrom4.0%to5.0%inCôted'Ivoire).

• The sustaining capital expenditure for Q2-2020 decreased slightly over Q1-2020 primarily due to the significantreduction in waste capitalization at Agbaou which offset the slight increases at Ity and Karma Mine with Houndéremainingflat.ThesustainingcapitalexpenditureforH1-2020increasedcomparedtothecorrespondingperiodof2019duetoscheduledwastecapitalizationatHoundéandthecommissioningoftheItyCILproject.

• TheAll-InsustainingMarginforQ2-2020remainedflatoverQ1-2020asthehigherrealizedgoldpriceoffsetlowergoldsales.TheAll-InMargin forH1-2020 increasedcomparedto thecorrespondingperiodof2019dueto increasedgoldsalesandincreasedrealizedgoldpricewhichwaspartiallyoffsetbyahighercashcosts,royaltiesandsustainingminingcapitalspend.

• The non-sustaining capital spend increased in Q2-2020 compared to Q1-2020, due to increases at Ity, Houndé andKarma.Thenon-sustainingcapitalspendforH1-2020increasedcomparedtothecorrespondingperiodof2019mainlyduetotheTSFraiseandwastecapitalizationatIty,whilespenddecreasedatAgbaou,KarmaandHoundé.

• Thenon-sustainingexplorationcapitalspendforH1-2020continuedtoremainhigh,inlinewithEndeavour’sstrategicobjectiveofunlockingexplorationvaluethroughitsaggressivedrillingcampaign.Themajorityoftheexplorationworkplanned for 2020 was conducted in H1-2020, ahead of the rainy season, with approximately 85% of the full yearguidancealreadycompleted.

• Taxes paid increased by $11.6 million in Q2-2020 compared to Q1-2020. This was due to corporate income taxpaymentsmade at Agbaou and Ity of $11.9million and $7.5million respectively. Taxes paid in H1-2020 decreasedslightlycomparedtothepreviousyear,despitesignificantlyhigherrevenues,mainlyduetoadecreaseoftaxespaidatHoundé(duetoinstallmentpaymentsbeingmade).

• Theinterestpaid,financingfeesandleaserepaymentsdecreasedinQ2-2020comparedtoQ1-2020astheconvertiblenotescouponispayableduringthefirstandthirdquarters.TheamountforH1-2020increasedslightlycomparedtothecorrespondingperiodofH1-2019mainlyduetointerestpaymentonequipmentleasesatIty.

• Cash settlements on hedge programs in H1-2020 includes a $4.5million fee for the gold collar program and $19.5millionforitsassociatedsettlements,andaninflowof$6.7millionrelatedtoshort-termforwardsalesinH1-2020.ThecollarexpiredattheendofJune2020withthefinalpaymentonthecollardueinearlyQ3-2020.

• Growthprojectspenddecreasedto$2.1millioninQ2-2020astheItyCILplantwascompletedinQ1-2019.TheamountforH1-2020of$4.2millionrelatesmainlytotheKalanaproject.

• M&A, restructuring and asset sales/purchases include proceeds of $10.3 received on sale of mining equipment, inaddition to$1,5million received for associated spares atKarma , offsetby$5.4million cashpaid for theadditionalinterestinItyMineand$6.9millioninacquisitionandrestructuringcosts.

• OtherexpensesinQ2-2020mainlyrelatedtoCOVID-19relatedexpensesintheformofdonationsandmedicalsupplies.

• $120.0millionwasdrawnontheRCFasaproactivemeasureinQ1-2020tosecuretheCorporation’sliquidityaspartofitsCOVID-19businesscontinuityprogram.

WorkingCapital

TheH1-2020workingcapitalisanoutflowof$19.2millionwhichisbrokendownasfollows:

• Receivableswereanoutflowof$18.0millionH1-2020.ThisismainlyduetotheincreaseinVATreceivableatHoundéandadvancestotheBCMGroup.

• Inventoriesandlong-termassetswereaninflowof$5.5inH1-2020,thisismainlyduetothedecreaseinstockpiles,GICandconsumablesatItyandHoundéwhichwasoffsetbyanincreaseofGICatKarma.

• Accountspayableoutflowof$10.0millionforQ2-2020and$6.8millionoutflowinH1-2020astheCorporationbegantosettleoutstanding supplierswhosebalanceshadbuiltupQ1-2020as financial institutionshadexperiencedapprovalbacklogsattheonsetofCOVID-19.

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NetDebtPosition

ThefollowingtablesummarizestheCorporation’snetdebtpositionasatJune30,2020,March31,2020,andJune30,2019.

Table17:NetDebtPosition

($'000s)June30,2020

March31,2020

December31,2019

Cashandcashequivalents 351,817 357,343 189,889

Less:Equipmentfinanceobligation (64,463) (69,997) (78,081)

Less:Convertibleseniorbond (330,000) (330,000) (330,000)

Less:Drawnportionof$430millionRCF (430,000) (430,000) (310,000)

NetDebt (472,646) (472,654) (528,192)

NetDebt/AdjustedEBITDALTMratio1 1.00 1.06 1.481AdjustedEBITDAispertable21andiscalculatedusingthetrailingtwelvemonthsAdjustedEBITDAaspresentedinpriorreporting

EquipmentFinanceObligations

TheequipmentfinanceobligationrelatestoagreementsrelatingtoKomatsuminingequipmentattheHoundéandItymines.

Table18:EquipmentFinanceObligations

June30,2020

March31,2020

December31,2019

Houndémine 32,680 36,115 39,340

Itymine 31,783 33,882 38,741

Presentvalueofminimumfinancepayments 64,463 69,997 78,081

ConvertibleSeniorNotes

OnFebruary8,2018,theCorporationcompletedaprivateplacementofconvertibleseniornoteswithatotalprincipalamountof$330.0millionduein2023(the“Notes”).Theinitialconversionrateis41.84oftheCorporation’scommonshares(“Shares”)per$1,000Note,oraninitialconversionpriceofapproximately$23.90(CAD$29.47)pershare.

TheNotesbear interestatacouponrateof3%payablesemi-annually inarrearsonFebruary15andAugust15ofeachyear,beginningonAugust15,2018.TheNotesmatureonFebruary15,2023,unlessredeemedearlier,repurchasedorconvertedinaccordance with the terms of the Notes. The Corporation may, subject to certain conditions, elect to satisfy the principalamountand conversionoptiondueatmaturityorupon redemption through thepaymentordeliveryof any combinationofSharesandcash.

ThekeytermsoftheConvertibleSeniorNotesinclude:

• Principalamountof$330.0million.

• Couponrateof3%payableonasemi-annualbasis.

• Thetermofthenotesis5years,maturinginFebruary2023.

• Thenotesarereimbursablethroughthepaymentordeliveryofsharesand/orcash.

• Theinitialconversionpriceis$23.90(CAD$29.47)pershare.

• Thereferencesharepriceofthenotesis$18.04(CAD$22.24)pershare.

For accountingpurposes, theCorporationmeasures theNotes at amortized cost, accreting tomaturityover the termof theNotes. The conversion option is an embedded derivative and is accounted for as a financial liabilitymeasured at fair valuethrough profit or loss, as the Corporation has the ability to settle the option at fair value in cash, common shares, or acombinationofcashandcommonsharesincertaincircumstances.

Theunrealizedgain/lossontheconvertiblenoteoptionforthethreeandsixmonthsendedJune30,2020wasanunrealizedlossof$63.9millionandanunrealizedlossof$61.2millionrespectively(threeandsixmonthsendedJune30,2019-unrealizedlossof$4.5millionandanunrealizedgainof$3.9millionrespectively).

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EquityandCapital

EndeavourMining’sauthorizedcapitalis200,000,000sharesdividedinto100,000,000ordinaryshareswithaparvalueof$0.10eachand100,000,000undesignatedshares.ThetablebelowsummarizesEndeavourMining’ssharestructureatJune30,2020.

Table19:OutstandingShares

June30,2020

March31,2020

December31,2019

Sharesissuedandoutstanding 110,993,240 110,993,240 109,927,097

Stockoptions 14,950 14,950 14,950

AsatAugust5,2020,theCorporationhad163,080,336sharesissuedandoutstanding,andnooutstandingstockoptions.

Financialinstruments

Toincreasethecashflowcertaintyduringitsdebtreimbursementphase,EndeavourMininghadputinplaceashort-termGoldRevenue Protection Strategy consisting of Gold Option Contracts, similar to the strategy employed during the constructionphase.

AdeferredpremiumcollarstrategyusingwrittencalloptionsandboughtputoptionshadbeenputinplacebeginningonJuly1,2019andendingonJune30,2020withafloorpriceof$1,358perounceandaceilingpriceof$1,500perounce.Theprogramcoveredatotalof360,000ounces,whichrepresentedapproximately50%ofEndeavourMining’stotalgoldproductionfortheperiod. In the sixmonthsended June30, 2020, theCorporation'sdeferredpremiumcollar strategy for the12-monthperiodfromJuly2019toJune2020expired.Overthelifeofthecollar,theCorporationrealizedalossof$35.9million.

6.3. ACCOUNTINGPOLICIESANDCRITICALJUDGEMENTS

Criticaljudgementsandkeysourcesofestimationuncertainty

The Corporation’s management has made critical judgments and estimates in the process of applying the Corporation’saccounting policies to the consolidated financial statements that have significant effects on the amounts recognized in theCorporation’s consolidated financial statements. These estimates include commencement of commercial production,determination of economic viability, functional currency, business combinations, exchangeable shares, and capitalization ofwastestripping.TherehavebeennosignificantchangescomparedtoJune30,2019.

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7. NON-GAAPMEASURES

7.1. ALL-INSUSTAININGMARGINANDADJUSTEDEBITDA

TheCorporationbelievesthat, inadditiontoconventionalmeasurespreparedinaccordancewithGAAP,certain investorsusetheall-in sustainingmarginandadjustedearningsbefore interest, tax,depreciationandamortization (“AdjustedEBITDA”) toevaluate the Corporation’s performance and ability to generate cash flows and service debt. These do not have a standardmeaningandare intended toprovideadditional informationand shouldnotbe considered in isolationorasa substitute formeasuresofperformancepreparedinaccordancewithGAAP.Thefollowingtablesprovidetheillustrationofthecalculationofthismargin,forthethreemonthsendedJune30,2020,March31,2020,andJune30,2019andsixmonthsendedJune30,2020andJune30,2019.

Table20:All-InSustainingMargin


($'000s)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Revenues 253,084 269,902 219,371 522,986 370,681Less:Royalties (17,771) (17,452) (11,032) (35,223) (20,021)Less:Totalcashcosts (101,143) (115,355) (107,967) (216,498) (187,675)Less:CorporateG&A (5,049) (5,231) (5,143) (10,280) (11,204)Less:Sustainingcapital (16,784) (18,972) (10,823) (35,756) (22,068)

All-insustainingmargin 112,337 112,892 84,406 225,229 129,713

Table21:AdjustedEBITDA


($'000s)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

(Loss)/Earningsbeforetaxes (11,835) 59,782 22,280 47,947 23,091

Addback:Depreciationanddepletion 43,760 52,529 51,970 96,289 88,102Addback:Acquisitionandrestructuringcosts 2,589 4,330 — 6,919 —Addback:Other(expenses)/income 1,791 (1,935) (4,574) (144) (4,377)Addback:Financecosts 11,982 11,662 12,386 23,644 17,305

Addback:Lossonfinancialinstruments 71,931 3,492 11,757 75,423 10,634

AdjustedEBITDA 120,218 129,860 93,819 250,078 134,755

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7.2. CASHANDALL-INSUSTAININGCOSTPEROUNCEOFGOLDSOLD

TheCorporationreportscashcostsbasedonouncessold.TheCorporationbelievesthat,inadditiontoconventionalmeasuresprepared in accordancewith GAAP, certain investorsmay find this information useful. However, there are no standardizedmeanings,and therefore thisadditional informationshouldnotbeconsidered in isolation,orasa substitute formeasuresofperformancepreparedinaccordancewithGAAP.Thefollowingtableprovidesareconciliationofcashcostsperounceofgoldsold,forthethreemonthsendedJune30,2020,March31,2020,andJune30,2019andsixmonthsendedJune30,2020andJune30,2019.

Table22:CashCosts


($'000sexceptouncessold)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Operatingexpensesfrommineoperations (103,307) (114,404) (103,318) (217,711) (191,681)

Non-cashandotheradjustments 2,164 (951) (4,649) 1,213 4,006

Totalcashcosts (101,143) (115,355) (107,967) (216,498) (187,675)

Goldouncessold 149,828 174,554 170,749 324,382 291,624

Totalcashcostperounceofgoldsold 675 661 632 667 644

TheCorporationisreportingall-insustainingcostsperouncesold.Thisnon-GAAPmeasureprovidesinvestorswithtransparencyregardingthetotalcashcostofproducinganounceofgoldineachperiod.Readersshouldbeawarethatthismeasuredoesnothaveastandardizedmeaning.Itisintendedtoprovideadditionalinformationandshouldnotbeconsideredinisolation,orasasubstituteformeasuresofperformancepreparedinaccordancewithGAAP.

Table23:All-InSustainingCosts


($'000sexceptouncessold)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Totalcashcostforouncessold (101,143) (115,355) (107,967) (216,498) (187,675)

Royalties (17,771) (17,452) (11,032) (35,223) (20,021)

CorporateG&A (5,049) (5,231) (5,143) (10,280) (11,204)

Sustainingcapital (16,784) (18,972) (10,823) (35,756) (22,068)

All-insustainingcosts (140,747) (157,010) (135) (297,757) (241)

Goldouncessold 149,828 174,554 170,749 324,382 291,624

All-insustainingcostperouncesold 939 899 790 918 826

Table24:SustainingandNon-SustainingCapital


($'000s)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Expendituresonmininginterests 58,325 53,952 65,792 112,277 169,537

Non-sustainingcapitalexpenditures (22,109) (17,720) (17,232) (39,829) (28,690)

Non-sustainingexploration (17,346) (15,146) (21,392) (32,492) (32,902)

Growthprojects (2,086) (2,113) (16,345) (4,199) (85,876)

SustainingCapital 16,784 18,972 10,823 35,757 22,069

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7.3. ADJUSTEDNETEARNINGSANDADJUSTEDNETEARNINGSPERSHARE

Net earnings have been adjusted for items considered exceptional in nature and not related to Endeavour Mining’s coreoperation of mining assets. The presentation of adjusted net earningsmay assist investors and analysts to understand theunderlyingoperatingperformanceofourcoreminingbusiness.However,adjustednetearningsandadjustednetearningspersharedonothaveastandardmeaningunderIFRS.Theyshouldnotbeconsideredinisolation,orasasubstituteformeasuresofperformance prepared in accordance with IFRS and are not necessarily indicative of operating profit or cash flow fromoperationsasdeterminedunderIFRS.

Thefollowingtablereconcilesthesenon-GAAPmeasurestothemostdirectlycomparableIFRSmeasure.

Table25:AdjustedNetEarnings


($'000s)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Totalnetandcomprehensive(loss)/earnings (22,616) 35,463 6,904 12,847 (4,539)

Deferredincometaxexpense 8,468 620 1,531 9,088 307

Lossonfinancialinstruments 71,931 3,492 11,757 75,423 10,634

Otherexpenses/(income) 1,791 (1,935) (4,574) (144) (4,377)

Share-basedcompensation 4,942 1,623 4,385 6,565 6,985

Acquisitionandrestructuringcosts 2,589 4,330 — 6,919 —

Non-cashandotheradjustments 2,164 (951) (4,649) 1,213 4,006

Adjustednetearnings 69,269 42,642 15,354 111,911 13,016

Attributabletonon-controllinginterests 16,476 9,125 6,835 25,601 9,407

AttributabletoshareholdersoftheCorporation 52,793 33,517 8,519 86,310 3,609

Weightedaveragenumberofsharesissuedandoutstanding 110,993,240 110,584,356 109,919,887 110,788,798 109,734,405

Adjustednetearningspershare(basic)fromoperations 0.48 0.30 0.08 0.78 0.03

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7.4. OPERATINGCASHFLOW

TheCorporationbelievesthat, inadditiontoconventionalmeasurespreparedinaccordancewithGAAP,certain investorsusefreecashflowtoassesstheCorporation’sabilitytogenerateandmanageliquidresources.Thesetermsdonothaveastandardmeaningandareintendedtoprovideadditional information.TheyshouldnotbeconsideredinisolationorasasubstituteformeasuresofperformancepreparedinaccordancewithGAAP.

Table26:OperatingCashFlow(OCF)andOCFpershare


($'000s)June30,2020

March31,2020

June30,2019

June30,2020

June30,2019

Cashgeneratedfromoperatingactivities 57,416 125,955 62,209 183,371 85,125

Changesinnon-cashworkingcapital (27,937) 6,663 4,887 (21,274) (20,189)

Operatingcashflowsbeforenon-cashworkingcapital 85,353 119,292 57,322 204,645 105,314

DividedbyweightedaveragenumberofO/Sshares,inthousands 110,993 110,584 109,920 110,789 109,734

Operatingcashflowpershare $ 0.77 $ 1.08 $ 0.52 $ 1.85 $ 0.96

7.5. NETDEBT/ADJUSTEDEBITDARATIO

TheCorporation is reportingNetDebtandNetDebt/AdjustedEBITDA ratio. Thisnon-GAAPmeasureprovides investorswithtransparencyregardingtheliquiditypositionoftheCorporation.ItisintendedtoprovideadditionalinformationandshouldnotbeconsideredinisolationorasasubstituteformeasuresofperformancepreparedinaccordancewithGAAP.Thecalculationofnetdebtisshownintable17,calculatedasnominalundiscounteddebtincludingleases(butexcludingliabilitiesrecognizedontheadoptionofIFRS16-leases),lesscash.Thefollowingtableexplainsthecalculationofnetdebt/AdjustedEBITDAratiousingthelasttwelvemonthsofAdjustedEBITDA.

Table27:NetDebt/AdjustedEBITDAratio

($'000s)June30,2020

March31,2020

December31,2019

NetDebt 472,646 472,654 528,192

TrailingtwelvemonthAdjustedEBITDA 471,013 444,614 355,690

NetDebt/AdjustedEBITDALTMratio 1.00 1.06 1.48

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7.6. RETURNONCAPITALEMPLOYED

TheCorporationusesReturnonCapitalEmployed(“ROCE”)asameasureoflong-termoperatingperformancetomeasurehoweffectivelymanagement utilizes the capital it has been provided. This non-GAAPmeasure is intended to provide additionalinformationandshouldnotbeconsideredinisolationorasasubstituteformeasuresofperformancepreparedinaccordancewithGAAP.ThecalculationofROCE,expressedasapercentage, isAdjustedEBIT (basedonadjustedEBITDAasper table21)dividedbytheaverageof theopeningandclosingcapitalemployedfor thetwelvemonthsprecedingtheperiodend.Capitalemployedisthetotalassetslesscurrentliabilities.

Table28:ReturnonCapitalEmployed

TRAILINGTWELVEMONTHS

($'000sunlessotherwisestated)June30,2020

March31,2020

June30,2019

AdjustedEBITDA 471,013 444,614 355,690

Less:depreciationandamortisation (205,406) (213,616) (174,129)

AdjustedEBIT(A) 265,607 230,998 236,921

OpeningCapitalemployed(B) 1,753,857 1,716,115 1,587,930

TotalAssets 2,057,124 2,037,108 1,982,150

Less:CurrentLiabilities (249,358) (285,129) (228,293)

ClosingCapitalemployed(C) 1,807,766 1,751,979 1,753,857

AverageCapitalEmployed(D)=(B+C)/2 1,780,812 1,734,047 1,670,894

ROCE(A)/(D) 15% 13% 14%

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8. QUARTERLYANDANNUALFINANCIALANDOPERATINGRESULTS

The following tables summarize theCorporation’s financial andoperational information for the lasteightquartersand threefiscalyears.

Table29:2020-2019QuarterlyKeyPerformanceIndicators

FORTHETHREEMONTHSENDED

($'000sexceptouncessold) UnitJune30,2020

March31,2020

December31,2019

September30,2019

Goldouncessold oz 149,828 174,554 171,862 185,268

Goldrevenues $ 253,084 269,902 248,398 267,292

Cashflowsfromoperations $ 57,416 125,955 120,371 96,389

Earningsfrommineoperations $ 88,245 85,518 55,445 83,704

Net(loss)/earningsandtotalcomprehensive(loss)/earnings $ (22,616) 35,463 (113,076) (23,545)

Net(loss)/earningsattributabletoshareholders $ (37,229) 25,998 (113,169) (32,199)

Basic(loss)/earningspersharefromoperations $ (0.34) 0.24 (1.03) (0.29)

Diluted(loss)/earningspersharefromoperations $ (0.34) 0.24 (1.03) (0.29)

Table30:2019-2018QuarterlyKeyPerformanceIndicators

FORTHETHREEMONTHSENDED

($'000sexceptouncessold) UnitJune30,2019

March31,2019

December31,2018

September30,2018

Goldouncessold oz 170,749 120,876 173,424 134,159

Goldrevenues $ 219,371 151,310 207,784 155,764

Cashflowsfromoperations $ 62,209 22,916 11,569 11,569

Earningsfrommineoperations $ 53,051 17,826 22,498 25,322

Netearnings/(loss)andtotalcomprehensiveearnings/(loss) $ 6,904 (11,443) (129,557) (20,394)

Netearnings/(loss)attributabletoshareholders $ 711 (14,667) (31,515) (16,775)

Basicearnings/(loss)persharefromcontinuingoperations $ 0.01 0.13 (0.29) 0.14

Dilutedearnings/(loss)persharefromcontinuingoperations $ 0.01 0.13 (0.29) 0.14

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Table31:AnnualKeyPerformanceIndicators1

FORTHEYEARENDED

($'000sexceptpershareamounts)December31,

2019December31,

2018December31,

2017

Goldouncessold 648,755 612,103 667,569

Goldrevenues 886,371 751,957 470,643

Cashflowsfromoperations 301,885 250,920 221,791

Earningsfrommineoperations 210,026 95,769 121,926

Net(loss)/earningsandtotalcomprehensive(loss)/earnings (136,766) 17,060 (177,068)

Netlossattributabletoshareholders (159,324) (65) (156,337)

Basiclosspershare (1.45) 0.00 (1.59)

Dilutedlosspershare (1.45) 0.00 (1.59)

Totalassets 1,872,791 1,922,043 1,693,511

Totallongtermfinancialliabilities 738,294 660,472 451,705

Totalattributableshareholders'equity 717,867 858,006 984,864

Adjustednetearningspershare2 0.67 0.49 0.601Figuresarepresentedasperpriorperiodreporting.2TheadjustednetearningspershareisinclusiveofthepriorperiodtaxadjustmentincludedintheDecember31,2018adjustedearningspershare.

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9. RISKFACTORS

Readers of this MD&A should consider the information included or incorporated by reference in this document and theCorporation’sauditedconsolidatedfinancialstatementsandrelatednotesforthethreeandsixmonthsendedJune30,2020.ThenatureoftheCorporation’sactivitiesandthelocationsinwhichitworksmeanthattheCorporation’sbusinessgenerallyisexposedtosignificantriskfactors,manyofwhicharebeyonditscontrol.TheCorporationexaminesthevariousriskstowhichitis exposed and assesses any impact and likelihood of those risks. For discussion on all the risk factors that affect theCorporation’sbusinessgenerally,pleaserefertothemostrecentAnnualInformationFormfiledonSEDARatwww.sedar.com,andthe2019year-endauditedconsolidatedfinancialstatements.Therisksthataffectthefinancialstatementsspecifically,andtherisksthatarereasonablylikelytoaffecttheminthefuturewhichareincorporatedbyreferenceinthisMD&A,arediscussedbelow.

9.1. BUSINESSRISKS

BusinesscontinuityrisksinlightofCOVID-19

OnMarch 11, 2020, theWorld Health Organization declared the outbreak of a respiratory disease caused by a new novelcoronavirus(“COVID-19”)asapandemic. InresponsetohealthrisksassociatedwiththespreadofCOVID-19,theCorporationimplementedanumberofhealthandsafetymeasuresdesignedtoprotectemployeesatitsoperationsaroundtheworld.

Asofthedateofissuanceofthesecondensedinterimconsolidatedfinancialstatements,theCorporation’soperationshavenotbeen significantly impacted, however, the Corporation continues tomonitor the situation.While the Corporation's financialposition,performanceandcashflowscouldbenegativelyimpacted,theextentoftheimpactcannotbereasonablyestimatedatthis time.Management is currentlymonitoringand regularly assessing the short andmedium-term impactsof theCOVID-19virus, including for example supply chain, mobility, workforce, market and trade flow impacts, as well as the resilience ofCanadian, West African, and other global financial markets to support recovery. Any longer term impacts are also beingconsideredandmonitored,asappropriate.However,thispandemicisevolvingrapidlyanditseffectsonourownoperationsareuncertain.Itispossiblethatinthefutureoperationsmaybetemporarilyshutdownorsuspendedforindeterminateamountsoftime, any of which may, individually or in the aggregate, have a material and adverse impact on our business, results ofoperationsandfinancialperformance.TheextenttowhichCOVID-19mayimpacttheCorporation’sbusinessandoperationswilldependonfuturedevelopmentsthatarehighlyuncertainandcannotbeaccuratelypredicted,includingnewinformationwhichmayemergeconcerningtheseverityofandtheactionsrequiredtocontainCOVID-19orremedyitsimpact.

TheglobalresponsetotheCOVID-19pandemichasresultedin,amongotherthings,borderclosures,severetravelrestrictions,aswellasquarantine,self-isolationandotheremergencymeasuresimposedbyvariousgovernments.Additionalgovernmentorregulatory actions or inactions around the world in jurisdictions where the Corporation operatesmay also have potentiallysignificanteconomicandsocialimpacts.IfthebusinessoperationsoftheCorporationaredisruptedorsuspendedasaresultoftheseorothermeasures,itmayhaveamaterialadverseeffectontheCorporation’sbusiness,resultsofoperationsandfinancialperformance. The COVID-19 virus and efforts to contain it may have a significant effect on commodity prices, and thepossibilityofaprolongedglobaleconomicdownturnmayfurtherimpactcommoditydemandandprices.

The global pandemic caused by COVID-19 may affect Endeavour's ability to operate at one or more of its mines for anindeterminateperiodoftime,mayaffectthehealthofitsemployeesorcontractorsresultingindiminishedexpertiseorcapacity,maymeanthatkeyexpatorcontractresourcescannotaccessWestAfrica,mayresultindelaysordisruptioninitssupplychainleading to unavailability of critical spares and inventory (or increased costs), may lead to restrictions on transferability ofcurrency,may cause business continuity issues at global gold refineries (and therefore its ability to generate revenue),maymean it cannot transport gold from its sites to refineries,may result in failures of various local administration, logistics andcriticalinfrastructure,maycausesocialinstabilityinWestAfricancountrieswhichinturncoulddisruptbusinesscontinuity,andmay result in additional and currently unknown liabilities. All or any of the foregoing may present risks to the investmentpropositionofEndeavour,itsliquidity,solvencyandabilitytomeetitsdebtobligationsastheyfalldue.

TheintegrationofSEMAFOandEndeavourmaynotoccurasplanned.

The Arrangement Agreement has been entered into with the expectation that its completion will result in, among otherbenefits, increasedgoldproduction, the realizationof synergies resulting from the consolidationof SEMAFOandEndeavour,greaterabilitytofundgrowthandenhancedgrowthopportunitiesforEndeavourfollowingthecompletionoftheArrangementasaresultofthecombinedentity’sprojectandexplorationpipeline.TheseanticipatedbenefitswilldependinpartonwhetherSEMAFOandEndeavour’srespectiveoperationscanbeintegratedinanefficientandeffectivemanner.Mostoperationaland

35

strategicdecisionsandcertainstaffingdecisionswithrespecttointegrationhavenotyetbeenmade.Thesedecisionsandtheintegrationofthetwocompanieswillpresentchallengestomanagement,includingtheintegrationofsystemsandpersonnelofthe two companies, unanticipated liabilities, unanticipated costs and the loss of key employees. The performance ofEndeavour’s operations after completion of the Arrangement could be adversely affected if Endeavour cannot retain keyemployeestoassistintheintegrationandoperationofSEMAFOandEndeavour.Asaresultofthesefactors,itispossiblethatthesynergiesexpectedfromthecombinationofSEMAFOandEndeavourwillnotberealizedorcouldbeadverselyaffected.

9.2. FINANCIALRISKS

Creditrisk

CreditriskistheriskthatthecounterpartytoafinancialinstrumentwillcauseafinanciallossfortheCorporationbyfailingtodischargeitsobligations.Creditriskarisesfromcash,restrictedcash,marketablesecurities,tradeandotherreceivables, long-termreceivableandotherassets.TheCorporationcloselymonitors its financialassetsanddoesnothaveanysignificantconcentrationofcreditriskotherthanreceivablebalancesowedfromthegovernmentsinthecountriestheCorporationoperatesinanditsreceivablefromtheBCMGroup.BCMGroup,aprivateminingcontractorandoperator,isthecounterpartywhoacquiredtheNzemaandTabakotominesin2017and 2018 respectively, and from whom the receivables are ultimately due. The Corporation signed an omnibus settlementagreementinNovember2019,whichoffsetcertainamountsoutstandingbetweenthetwoparties,resultingincashinstallmentsof$6.8millionreceivedin2020relatingtothesaleofNzemamine.FurthertoadditionalamountspaidonbehalfofBCMGroupin theperiod, theCorporationreceived$4.5million in thethreemonthsendedMarch31,2020, in relationto thereceivablefromthesaleoftheTabakotomine.Long-termreceivablesof$8.8millionmainlyconsistofareceivableandNSRassociatedwiththesaleoftheTabakotomineinDecember2018.TheCorporationsellsitsgoldtolargeinternationalorganizationswithstrongcreditratings,andthehistoricallevelofcustomerdefaults isminimal. As a result, the credit risk associatedwith gold trade receivables at June 30, 2020 is considered to benegligible.TheCorporationdoesnotrelyonratingsissuedbycreditratingagenciesinevaluatingcounterparties’relatedcreditrisk.

TheCorporation’smaximumexposuretocreditriskisasfollows:

Table32:ExposuretoCreditRisk

($'000s)June30,2020

March31,2020

December31,2019

Cashandcashequivalents 351,817 357,343 189,889

Cash-restricted 13,115 11,165 9,958

Tradeandotherreceivables 37,562 26,717 19,228

Workingcapitalloan 565 553 541

Marketablesecurities 1,839 1,175 1,224

Long-termreceivable 8,822 10,670 13,322

413,720 407,623 234,162

Liquidityrisk

LiquidityriskistheriskthattheCorporationwillencounterdifficultyinmeetingobligationsassociatedwithitsfinancialliabilitiesthat are settled by delivering cash, physical gold or another financial asset. The Corporation has a planning and budgetingprocessinplacetohelpdeterminethefundsrequiredtosupporttheCorporation’snormaloperatingrequirements.

Currencyrisk

CurrencyriskrelatestotheriskthatthefairvaluesorfuturecashflowsoftheCorporation’sfinancialinstrumentswillfluctuatebecauseofchangesinforeignexchangerates.ExchangeratefluctuationsmayaffectthecoststhattheCorporationincursinitsoperations. There has been no change in the Corporation’s objectives and policies formanaging this risk during the periodendedJune30,2020.

TheCorporationhasnothedgeditsexposuretoforeigncurrencyexchangerisk.

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Thetablebelowhighlightsthenetassetsheldinforeigncurrencies,presentedinUSdollars:

Table33:NetAssetsinForeignCurrencies

($'000s)June30,2020

March31,2020

December31,2019

Canadiandollar 124 138 431

CFAFrancs 5,461 8,114 11,147

Euro 2,892 2,593 2,973

Othercurrencies 5,691 4,093 6,185

14,168 14,938 20,736

The effect on earnings before taxes as at June 30, 2020, of a 10% appreciation or depreciation in the foreign currenciesagainsttheUSdollarontheabovementionedfinancialandnon-financialassetsandliabilitiesoftheCorporationisestimatedto be $1.4million (June 30, 2019, $3.1million), if all other variables remained constant. The calculation is based on theCorporation’sstatementoffinancialpositionasatJune30,2020.

Interestraterisk

Interest rate risk is the risk that future cash flows from, or the fair values of, the Corporation’s financial instruments willfluctuatebecauseofchangesinmarketinterestrates.TheCorporationisexposedtointerestrateriskprimarilyonitslong-termdebt.Sincemarketablesecuritiesandgovernmenttreasurysecuritiesheldasloansareshortterminnatureandareusuallyheldtomaturity,thereisminimalfairvaluesensitivitytochangesininterestrates.TheCorporationcontinuallymonitorsitsexposuretointerestratesandiscomfortablewithitsexposuregiventherelativelylowshort-termUSinterestratesandLIBOR.

TheeffectonearningsandothercomprehensivelossbeforetaxasatJune30,2020,ofa10%changeintheLIBORrateontheRCFisestimatedtobe$0.1million(December31,2019-$0.1million).

Pricerisk

PriceriskistheriskthatthefairvalueorfuturecashflowsoftheCorporation’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketprices.TherehasbeennochangeintheCorporation’sobjectivesandpoliciesformanagingthisriskandnosignificantchangestotheCorporation’sexposuretopriceriskduringtheperiodendedJune30,2020.

TheCorporation’sbusinessrequiressubstantialcapitalexpenditureandtherecanbenoassurancethatsuchfundingwillbeavailableonatimelybasis,oratall

The Corporation may require additional capital if it decides to develop other operations properties or make additionalacquisitions.TheCorporationmayalsoencountersignificantunanticipated liabilitiesorexpenses.TheCorporation’sability tocontinue its planned exploration and development activities, as well as its ability to discharge unanticipated liabilities andexpenses,dependsonitsabilitytogeneratesufficientfreecashflowfromitsoperatingmines,eachofwhichissubjecttocertainrisks anduncertainties. TheCorporationmaybe required toobtain additional equity or debt financing in the future to fundexplorationanddevelopmentactivitiesoracquisitionsofadditionalprojects.TherecanbenoassurancethattheCorporationwillbeabletoobtainsuchfinancinginatimelymanner,onacceptabletermsoratall.Inaddition,anyadditionaldebtfinancings,ifavailable,mayinvolvefinancialcovenantsandthegrantingoffurthersecurityovertheCorporation’sassets.

TheCorporation’suseofderivativeinstrumentsinvolvescertaininherentrisks,includingcreditrisk,marketliquidityrisk,andunrealizedmark-to-marketrisk

Fromtimetotime,theCorporationemployshedgingtoolsforaportionofitsgoldproductionandcommoditypricestoprotectaportionofitscashflowsagainstdecreasesinthepriceofgoldorincreasesinthepriceoftheunderlyingcommoditiesituses.Themainhedgingtoolsavailabletoprotectagainstpriceriskarecollarcontractswhich involveacombinationofputandcalloptions or forward sales. Various strategies are available using these tools. Although hedging activities may protect theCorporationagainstalowgoldpriceorcommoditypricefluctuations,theymayalso(i)limitthepricethatcanberealizedontheportionofhedgedgoldwherethemarketpriceofgoldexceedsthestrikepriceinforwardsaleorcalloptioncontracts,and(ii)stipulateapriceatwhichacommodity(suchasfuel)mustbepurchased,whichmaybehigherthantheprevailingmarketpriceforthatcommodity.

TheCorporation’sbusinesscouldbeadverselyaffectedbyglobalfinancialconditions

Globalfinancialconditionshavebeencharacterizedbyongoingvolatility.Globalfinancialconditionscouldsuddenlyandrapidlydestabilize in response to future events, as government authoritiesmay have limited resources to respond to future crises.Global capital markets have continued to display increased volatility in response to global events. Future crises may beprecipitatedbyanynumberofcauses,includingnaturaldisasters,geopoliticalinstability,changestoenergypricesorsovereigndefaults.SucheventsareillustrativeoftheeffectthateventsbeyondtheCorporation’scontrolmayhaveoncommodityprices,

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demandformetals,includinggold,availabilityofcredit,investorconfidenceandgeneralfinancialmarketliquidity,allofwhichaffecttheCorporation’sbusiness.

Commitmentandcontingencies

TheCorporationis,fromtimetotime,involvedinvariousclaims,legalproceedings,taxassessmentsandcomplaintsarisinginthe ordinary course of business from third parties. The Corporation cannot reasonably predict the likelihood or outcome oftheseactions.TheCorporationdoesnotbelievethatadversedecisionsinanyotherpendingorthreatenedproceedingsrelatedtoanymatter,oranyamountwhichmayberequiredtobepaidbyreasonthereof,willhaveamaterialeffectonthefinancialconditionorfutureresultsofoperations.

TheCorporationwasrecentlyservedintheCaymanIslandswithnoticeofaclaimbyaformerserviceprovider.TheCorporationistakinglegaladviceonthemeritsoftheclaimandtheprobableoutcomebutintendstovigorouslydefendagainsttheclaims.TheCorporationdoesnotbelievethattheoutcomeoftheclaimwillhaveamaterialimpact.

TheCorporation’sminingandexplorationactivitiesaresubjecttovariouslawsandregulationsgoverningtheprotectionoftheenvironment.Theselawsandregulationsarecontinuallychangingandaregenerallybecomingmorerestrictive.TheCorporationbelieves itsoperationsarematerially in compliancewithall applicable lawsand regulations. TheCorporationhasmade, andexpectstomakeinthefuture,expenditurestocomplywithsuchlawsandregulations.

TheCorporationisobligatedtodeliver100,000ouncesofgold(20,000ouncesperyear)toFranco-NevadaCorporationandSandstormGoldInc.(the“Syndicate”)overafiveperiodinexchangefor20%ofthespotpriceofgoldforeachounceofgolddelivered(the“ongoingpayment”).Theamountthatwaspreviouslyadvancedforthisagreementof$100.0millionisreducedoneachdeliverybytheexcessofthespotpriceofthegolddeliveredovertheongoingpayment.Followingthefive-yearperiod,whichcommencedonMarch31,2016,theCorporationiscommittedtodeliverrefinedgoldequalto6.5%ofthegoldproductionattheKarmaMineforthelifeofthemineinexchangeforongoingpayments.TheCorporationdeliveredanadditional7,500ouncesbetweenJuly2017andApril2019inexchangefortheadditionaldepositof$5.0millionreceivedin2017.TheCorporationassumedthegoldstreamwhenitacquiredtheKarmaMineonApril26,2016.GoldouncessoldtotheSyndicateunderthestreamagreementarerecognizedasrevenueonlyontheactualproceedsreceived,whichpertheagreementis20%ofthespotgoldprice.AsatJune30,2020,thereare16,665ouncesstilltobedelivered.

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10. CONTROLSANDPROCEDURES

10.1. DISCLOSURECONTROLSANDPROCEDURES

Disclosurecontrolsandproceduresaredesignedtoprovidereasonableassurancethatallrelevantinformationisgatheredandreportedona timelybasis to seniormanagement, including theChiefExecutiveOfficer (CEO)and theChief FinancialOfficer(CFO).Additionally, thesecontrolsandproceduresprovidereasonableassurance that informationrequired tobedisclosed inthe Corporation’s annual and interim filings (as such terms are defined under National Instrument 52-109 Certification ofDisclosureinIssuers’AnnualandInterimFilings)andotherreportsfiledorsubmittedunderCanadiansecuritieslawisrecorded,processed, summarized and reported within the time periods specified by those laws, and that material information isaccumulatedandcommunicatedtomanagementincludingtheCEOandCFOasappropriatetoallowtimelydecisionsregardingrequireddisclosure.

AsatJune30,2020,managementevaluatedthedesignandoperatingeffectivenessoftheCorporation’sdisclosurecontrolsandproceduresasrequiredbyCanadianSecuritiesLaw.Basedonthatevaluation,theCEOandCFOconcludedthatasofJune30,2020,thedisclosurecontrolsandprocedureswereeffective.

Therehavebeennomaterial changes in theCorporation’sdisclosurecontrolsandprocedures since theyearended June30,2020thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,theCorporation’spublicdisclosures.

10.2. INTERNALCONTROLSOVERFINANCIALREPORTING

The Corporation’s management, with the participation of its CEO and CFO, is responsible for establishing and maintainingadequateinternalcontrolsoverfinancialreporting.UnderthesupervisionoftheCFO,theCorporation’sinternalcontrolsoverfinancial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparationoffinancialstatementsforexternalpurposesinaccordancewithIFRS.

AsatJune30,2020,managementevaluatedtheeffectivenessoftheCorporation’s internalcontroloverfinancialreportingasrequiredbyCanadiansecuritieslaws.

Basedonthatevaluationofinternalcontroloverfinancialreporting,theCEOandCFOhaveconcludedthat,asatJune30,2020,theinternalcontrolsoverfinancialreportingwereeffectiveandabletoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithIFRS.

TherehavebeennomaterialchangesintheCorporation’sinternalcontrolsoverfinancialreportingsincetheyearendedJune30, 2020 that havematerially affected or are reasonably likely to materially affect the Corporation’s internal controls overfinancialreporting.

10.3. LIMITATIONSOFCONTROLSANDPROCEDURES

The Corporation’smanagement, including the CEO and CFO believe that any disclosure controls and procedures or internalcontrol over financial reporting, can provide only reasonable, but not absolute, assurance that the objectives of the controlsystem are met. These inherent limitations include the realities that judgments in decision making can be faulty, and thatbreakdowns canoccurbecauseof simple error ormistake.Additionally, controls canbe circumventedby the actionsof oneindividual,bycollusionoftwoormorepeople,orbyunauthorizedoverrideofthecontrol.Accordingly,becauseoftheinherentlimitationsinacontrolsystem,misstatementsduetoerrororfraudmayoccurandnotbedetected.

CAUTIONARYNOTEREGARDINGFORWARD-LOOKINGSTATEMENTS

Certain statements in this MD&A and certain information incorporated herein by reference constitute forward-lookingstatements.Forward-lookingstatementsinclude,butarenotlimitedto,statementswithrespecttotheCorporation’splansorfuturefinancialoroperatingperformance,theestimationofmineralreservesandresources,therealizationofmineralreserveestimates, conclusionsofeconomicassessmentsofprojects, the timingandamountofestimated futureproduction, costsoffutureproduction, future capital expenditures, costs and timingof thedevelopmentof newdeposits, success of explorationactivities,permittingtimelines,requirementsforadditionalcapital,sourcesandtimingofadditionalfinancing,realizationofunusedtaxbenefitsandfutureoutcomeoflegalandtaxmatters.Generally,theseforward-lookingstatementscanbeidentifiedby the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”,“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “will continue” or “believes”, orvariationsofsuchwordsandphrasesorstatethatcertainactions,eventsorresults“may”,“could”,“would”,“might”or“willbetaken”,“occur”or“beachieved”.Thematerialfactorsorassumptionsusedtodevelopmaterialforward-lookingstatementsaredisclosedthroughoutthisdocument.

Forward-looking statements, while based on management’s best estimates and assumptions, are subject to known andunknownrisks,uncertaintiesandotherfactorsthatmaycausetheactualresults,levelofactivity,performanceorachievementsofEndeavourMiningtobemateriallydifferentfromthoseexpressedorimpliedbysuchforward-lookingstatements,includingbut not limited to: risks related to the successful integration of acquisitions; risks related to international operations; risksrelatedtojointventureoperations;risksrelatedtogeneraleconomicconditionsandcreditavailability,actualresultsofcurrentexploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined;

39

fluctuations in prices ofmetals including gold; fluctuations in foreign currency exchange rates, increases inmarket prices ofmining consumables,possible variations inore reserves, gradeor recovery rates; failureofplant, equipmentorprocesses tooperateasanticipated;accidents,labourdisputes,titledisputes,claimsandlimitationsoninsurancecoverageandotherrisksofthe mining industry; delays in obtaining governmental approvals or financing or in the completion of development orconstructionactivities,changesinnationalandlocalgovernmentregulationofminingoperations,taxrulesandregulations,andpoliticalandeconomicdevelopmentsincountriesinwhichtheCorporationoperates,actualresolutionsoflegalandtaxmatters,aswellasthosefactorsdiscussedinthesectionentitled“DescriptionoftheBusiness–RiskFactors”inEndeavourMining’smostrecentAnnualInformationFormavailableonSEDARatwww.sedar.com.AlthoughEndeavourMininghasattemptedtoidentifyimportantfactorsthatcouldcauseactualresultstodiffermateriallyfromthosecontainedinforward-lookingstatements,theremaybeotherfactorsthatcauseresultsnottobeasanticipated,estimatedor intended.Therecanbenoassurancethatsuchstatementswillprovetobeaccurate,asactualresultsandfutureeventscoulddiffermateriallyfromthoseanticipatedinsuchstatements. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation’smanagement reviewsperiodically informationreflected in forward-lookingstatements.TheCorporationhasandcontinues todisclose in its Management’s Discussion and Analysis and other publicly filed documents, changes to material factors orassumptions underlying the forward-looking statements and to the validity of the statements themselves, in the period thechangesoccur.

CAUTIONARYNOTEREGARDINGRESERVESANDRESOURCES

Readers should refer to the most recent Annual Information Form of Endeavour Mining and other continuous disclosuredocumentsfiledbyEndeavourMiningavailableatwww.sedar.com,forfurtherinformationonmineralreservesandresources,whichissubjecttothequalificationsandnotessetforththerein.

AdditionalinformationrelatingtotheCorporationisavailableontheCorporation’swebsiteatwww.endeavourmining.comandintheCorporation’smostrecentlyfiledAnnualInformationFormfiledonSEDARatwww.sedar.com.

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http://www.endeavourmining.com/


5

FINANCIAL STATEMENTS

SECTION 2

TABLEOFCONTENTS

1 DESCRIPTIONOFBUSINESSANDNATUREOFOPERATIONS........................................................................... 52 BASISOFPRESENTATIONANDSIGNIFICANTACCOUNTINGPOLICIES............................................................ 53 TRADEANDOTHERRECEIVABLES................................................................................................................... 64 INVENTORIES.................................................................................................................................................. 75 PREPAIDEXPENSESANDOTHER..................................................................................................................... 76 MININGINTERESTS......................................................................................................................................... 87 OTHERLONG-TERMASSETS............................................................................................................................ 118 TRADEANDOTHERPAYABLES........................................................................................................................ 119 FINANCEOBLIGATIONS................................................................................................................................... 1210 LONG-TERMDEBT........................................................................................................................................... 1311 OTHERLONG-TERMLIABILITIES...................................................................................................................... 1512 SHARECAPITAL............................................................................................................................................... 1513 NON-CONTROLLINGINTERESTS...................................................................................................................... 1814 (LOSS)/GAINONFINANCIALINSTRUMENTS................................................................................................... 1915 DERIVATIVEFINANCIALINSTRUMENTS.......................................................................................................... 1916 INCOMETAXES................................................................................................................................................ 2117 SEGMENTEDINFORMATION........................................................................................................................... 2218 CAPITALMANAGEMENT................................................................................................................................. 2519 FINANCIALINSTRUMENTSANDRELATEDRISKS............................................................................................. 2520 COMMITMENTSANDCONTINGENCIES.......................................................................................................... 3021 SUBSEQUENTEVENTS..................................................................................................................................... 30

NoteAsat

June30,2020

AsatDecember31,

2019

ASSETSCurrentCashandcashequivalents 351,817 189,889Tradeandotherreceivables 3 37,562 19,228Inventories 4 163,864 168,379Prepaidexpensesandother 5 18,799 18,542

572,042 396,038Non-currentMininginterests 6 1,424,331 1,410,274Deferredtaxassets 3,880 5,498Otherlong-termassets 7 56,871 60,981

Totalassets $2,057,124 $1,872,791

LIABILITIES

CurrentTradeandotherpayables 8 166,977 173,267Currentportionoffinanceandleaseobligations 9 29,739 29,431Currentportionofderivativefinancialliabilities 15 — 10,349Incometaxespayable 52,642 54,968

249,358 268,015Non-currentFinanceandleaseobligations 9 46,362 57,403Long-termdebt 10 826,117 638,980Otherlong-termliabilities 11 43,735 41,911Deferredtaxliabilities 57,453 49,985

Totalliabilities $1,223,025 $1,056,294

EQUITY

Sharecapital 12 1,793,132 1,774,172Equityreserve 12 58,712 72,487Deficit (1,140,453) (1,128,792)

EquityattributabletoshareholdersoftheCorporation $ 711,391 $ 717,867

Non-controllinginterests 13 122,708 98,630

Totalequity $ 834,099 $ 816,497

Totalequityandliabilities $2,057,124 $1,872,791COMMITMENTSANDCONTINGENCIES(NOTE20)SUBSEQUENTEVENTS(NOTE21)

ApprovedbytheBoard:August5,2020

"SebastiendeMontessus"Director "AlisonBaker"Director

Theaccompanyingnotesareanintegralpartofthesecondensedinterimconsolidatedfinancialstatements

ENDEAVOURMININGCORPORATIONCondensedInterimConsolidatedStatementofFinancialPosition(ExpressedinThousandsofUnitedStatesDollars)

1


Note June30,2020

June30,2019

June30,2020

June30,2019

Revenues

Goldrevenue 253,084 219,371 522,986 370,681

Costofsales Operatingexpenses (103,308) (103,318) (217,711) (191,681)

Depreciationanddepletion 6 (43,760) (51,970) (96,289) (88,102)Royalties (17,771) (11,032) (35,223) (20,021)

Earningsfrommineoperations 88,245 53,051 173,763 70,877

Corporatecosts (5,049) (5,143) (10,280) (11,204)

Acquisitionandrestructuringcosts 21 (2,589) — (6,919) —

Share-basedcompensation 12 (4,942) (4,385) (6,565) (6,985)

Explorationcosts (1,796) (1,674) (3,129) (6,035)

Earningsfromoperations 73,869 41,849 146,870 46,653

Other(expenses)/income Lossonfinancialinstruments 14 (71,931) (11,757) (75,423) (10,634)

Financecosts 10 (11,982) (12,386) (23,644) (17,305)

Other(expenses)/income (1,791) 4,574 144 4,377(Loss)/Earningsbeforetaxes (11,835) 22,280 47,947 23,091Currentincometaxexpense (2,313) (13,845) (26,012) (27,323)Deferredincometaxexpense (8,468) (1,531) (9,088) (307)

Netandcomprehensive(loss)/earnings (22,616) 6,904 12,847 (4,539)

Attributableto: ShareholdersofEndeavourMiningCorporation (37,229) 711 (11,231) (13,956)Non-controllinginterests 13 14,613 6,193 24,078 9,417

$ (22,616)$ 6,904 $ 12,847 $ (4,539)

(Loss)/Earningspershare Basic(loss)/earningspershare 12 $ (0.34)$ 0.01 $ (0.10)$ (0.13)Diluted(loss)/earningspershare 12 $ (0.34)$ 0.01 $ (0.10)$ (0.13)


ENDEAVOURMININGCORPORATIONCondensedInterimConsolidatedStatementofComprehensive(Loss)/Earnings(ExpressedinThousandsofUnitedStatesDollars,exceptpershareamounts)

2


Note June30,2020

June30,2019

June30,2020

June30,2019

OperatingActivities (Loss)/Earningsfromcontinuingoperationsbeforetaxes (11,835) 22,280 47,947 23,091

Adjustmentsfor: Depreciationanddepletion 6 43,760 51,970 96,289 88,102Financecosts 10 11,982 12,386 23,644 17,305Share-basedcompensation 12 4,942 4,385 6,565 6,985Lossonfinancialinstruments 14 71,931 11,757 75,423 10,634Gainonsaleofassets 1,512 — 1,512 —

CashpaidonsettlementofDSUsandPSUs 12 (7) — (221) (1,125)Cashreceivedonsettlementofforwardcontract — — 6,686 —Incometaxespaid (20,148) (29,569) (28,672) (31,234)Netcashmovementfromgoldcollarsettlements (16,754) (802) (23,937) (937)Netnon-cashassetadjustments — (10,659) — (2,004)Foreignexchangeloss (30) (4,426) (591) (5,503)

Operatingcashflowsbeforechangesinnon-cashworkingcapital 85,353 57,322 204,645 105,314

Tradeandotherreceivables (10,553) 270 (18,039) (3,630)Inventories (7,363) (16,846) 3,363 (20,838)Prepaidexpensesandother 2 (3,107) 177 (4,338)Tradeandotherpayables (10,023) 24,570 (6,775) 8,617Cashgeneratedfromoperatingactivities $ 57,416 $ 62,209 $ 183,371 $ 85,125

InvestingActivities Expendituresonmininginterests 6 (58,325) (66,133) (112,277) (169,537)CashpaidforadditionalinterestofItymine 13 — — (5,430) (453)Changesinlong-termassets 7 (58) (2,469) 2,090 (8,469)Proceedsfromsaleofassets 6 10,292 — 10,292 —Cashusedininvestingactivities $ (48,091)$ (68,602)$ (105,325)$ (178,459)

FinancingActivities

Proceedsreceivedfromtheissueofcommonshares 12 — 36 — 274Paymentoffinancingfeesandother (94) (1,547) (441) (1,738)Interestpaid (6,187) (8,047) (16,794) (17,222)Proceedsoflong-termdebt 10 — 20,000 120,000 80,000Repaymentoffinanceandleaseobligation 9 (9,581) (10,954) (19,033) (14,374)Cash(usedin)/generatedfromfinancingactivities $ (15,862)$ (512)$ 83,732 $ 46,940

Effectofexchangeratechangesoncash 1,011 548 150 49(Decrease)/Increaseincash (5,526) (6,357) 161,928 (46,345)Cash,beginningofperiod 357,343 84,034 189,889 124,022Cash,endofperiod $ 351,817 $ 77,677 $ 351,817 $ 77,677


ENDEAVOURMININGCORPORATIONCondensedInterimConsolidatedStatementofCashFlows(ExpressedinThousandsofUnitedStatesDollars)

3

SHARECAPITAL

NoteNumberofCommonShares

ParValueAdditional

PaidinCapital

TotalShareCapital

EquityReserve

DeficitTotal

AttributabletoShareholders

Non-ControllingInterests

Total

At1January,2019 108,081,596 10,804 1,732,857 1,743,661 65,452 (951,107) 858,006 86,327 944,333

Sharesissuedonexerciseofoptions,RSU's&PSU's 770,956 77 12,792 12,869 (12,594) — 275 — 275

Sharebasedcompensation 12 — — — — 6,264 — 6,264 — 6,264

Acquisitionofnon-controllinginterestoftheItymine 13 1,072,305 107 17,508 17,615 — (13,967) 3,648 (4,101) (453)

Totalnetandcomprehensive(loss)/earnings — — — — — (13,956) (13,956) 9,417 (4,539)

AtJune30,2019 109,924,857 $ 10,988 $ 1,763,157 $ 1,774,145 $ 59,122 $ (979,030)$ 854,237 $ 91,643 $ 945,880

At1January,2020 109,927,097 10,988 1,763,184 1,774,172 72,487 (1,128,792) 717,867 98,630 816,497

SharesissuedonexerciseofPSU's 1,066,143 107 18,853 18,960 (18,960) — — — —

Sharebasedcompensation 12 — — — — 5,185 — 5,185 — 5,185

Acquisitionofnon-controllinginterestoftheItymine 13 — — — — — (430) (430) — (430)

Totalnetandcomprehensive(loss)/earnings — — — — — (11,231) (11,231) 24,078 12,847

AtJune30,2020 110,993,240 $ 11,095 $ 1,782,037 $ 1,793,132 $ 58,712 $ (1,140,453)$ 711,391 $ 122,708 $ 834,099


ENDEAVOURMININGCORPORATIONCondensedInterimConsolidatedStatementofChangesinEquity(ExpressedinThousandsofUnitedStatesDollars,exceptpershareamounts)

4

1 DESCRIPTIONOFBUSINESSANDNATUREOFOPERATIONS

EndeavourMining Corporation (“Endeavour” or the “Corporation”) is a publicly listed goldmining company thatoperates fourmines inWest Africa in addition to having project development and exploration assets.As furtherdiscussed in Note 21, Subsequent Events, on July 1, 2020, Endeavour successfully completed the acquisition ofSEMAFOIncwhooperatetwominesinBurkinaFaso.Endeavourisfocusedoneffectivelymanagingitsexistingassetsto maximize cash flows as well as pursuing organic and strategic growth opportunities that benefit from itsmanagementandoperationalexpertise.

Endeavour’scorporateofficeisinLondon,England,anditssharesarelistedontheTorontoStockExchange(“TSX”)(symbol EDV) and quoted in the United States on the OTCQX International under the symbol ‘EDVMF’. TheCorporation is incorporated in theCayman Islandsand its registeredoffice is locatedat27HospitalRoad,GeorgeTown,GrandCaymanKY1-9008,CaymanIslands.

TheCorporationhasbeentakingstepstomonitorandaddresstherisksinresponsetotheCOVID-19pandemicandtheirimpactontheCorporation'soperations(Note2).

2 BASISOFPRESENTATIONANDSIGNIFICANTACCOUNTINGPOLICIES

2.1. STATEMENTOFCOMPLIANCE

These condensed interim consolidated financial statements havebeenprepared in accordancewith InternationalAccounting Standard (“IAS”) 34, Interim Financial Reporting, using the accounting policies consistent withInternationalFinancialReportingStandards(‘IFRS’).

These condensed interimconsolidated financial statements shouldbe read in conjunctionwith themost recentlyissuedannualconsolidatedfinancialstatementsoftheCorporation,whichincludeinformationnecessaryorusefultounderstanding the Corporation’s operations, financial performance, and financial statement presentation. Inparticular,theCorporation’ssignificantaccountingpolicieswerepresentedasNote2totheconsolidatedfinancialstatementsfortheyearendedDecember31,2019andhavebeenconsistentlyappliedinthepreparationofthesecondensedinterimconsolidatedfinancialstatements.

2.2. BASISOFPREPARATION

Thesecondensedinterimconsolidatedfinancialstatementshavebeenpreparedonthehistoricalcostbasis,exceptcertainfinancialinstrumentsthataremeasuredatfairvalueattheendofeachreportingperiod.TheCorporation’saccounting policies have been applied consistently to all periods in the preparation of these condensed interimconsolidated financial statements. In preparing the Corporation's unaudited condensed interim consolidatedfinancial statements for the three and six months ended June 30, 2020, the Corporation applied the criticaljudgments andestimates disclosed in notes 3 and4of its audited consolidated financial statements for the yearendedDecember31,2019.

2.3.COVID-19ANDOTHERPANDEMICRISKS

OnMarch11,2020,theWorldHealthOrganizationdeclaredtheoutbreakofarespiratorydiseasecausedbyanewnovelcoronavirus(“COVID-19”)asapandemic.InresponsetohealthrisksassociatedwiththespreadofCOVID-19,the Corporation implemented a number of health and safety measures designed to protect employees at itsoperationsaroundtheworld.

ENDEAVOURMININGCORPORATIONNotestotheCondensedInterimConsolidatedFinancialStatements(ExpressedinThousandsofUnitedStatesDollars,exceptpershareamounts)

5

As of the date of issuance of these condensed interim consolidated financial statements, the Corporation’soperations have not been significantly impacted, however, the Corporation continues to monitor the situation.WhiletheCorporation'sfinancialposition,performanceandcashflowscouldbenegativelyimpacted,theextentoftheimpactcannotbereasonablyestimatedatthistime.Managementiscurrentlymonitoringandregularlyassessingtheshortandmedium-termimpactsoftheCOVID-19virus,includingforexamplesupplychain,mobility,workforce,market and trade flow impacts, as well as the resilience of Canadian, West African, and other global financialmarkets to support recovery. Any longer term impactsarealsobeingconsideredandmonitored,asappropriate.However,thispandemicisevolvingrapidlyanditseffectsonourownoperationsareuncertain.Itispossiblethatinthefutureoperationsmaybetemporarilyshutdownorsuspendedforindeterminateamountsoftime,anyofwhichmay,individuallyorintheaggregate,haveamaterialandadverseimpactonourbusiness,resultsofoperationsandfinancialperformance. Theextent towhichCOVID-19may impact theCorporation’sbusinessandoperationswilldepend on future developments that are highly uncertain and cannot be accurately predicted, including newinformationwhichmayemergeconcerningtheseverityofandtheactionsrequiredtocontainCOVID-19orremedyitsimpact.

TheglobalresponsetotheCOVID-19pandemichasresultedin,amongotherthings,borderclosures,severetravelrestrictions,aswellasquarantine,self-isolationandotheremergencymeasures imposedbyvariousgovernments.Additionalgovernmentor regulatoryactionsor inactionsaround theworld in jurisdictionswhere theCorporationoperates may also have potentially significant economic and social impacts. If the business operations of theCorporationaredisruptedorsuspendedasaresultoftheseorothermeasures,itmayhaveamaterialadverseeffectontheCorporation’sbusiness,resultsofoperationsandfinancialperformance.TheCOVID-19virusandeffortstocontain itmay have a significant effect on commodity prices, and the possibility of a prolonged global economicdownturnmayfurtherimpactcommoditydemandandprices.

TheglobalpandemiccausedbyCOVID-19mayaffectEndeavour'sabilitytooperateatoneormoreofitsminesforan indeterminate period of time, may affect the health of its employees or contractors resulting in diminishedexpertiseorcapacity,maymeanthatkeyexpatorcontractresourcescannotaccessWestAfrica,mayresultindelaysordisruption in its supplychain leading tounavailabilityof critical sparesand inventory (or increasedcosts),mayleadtorestrictionsontransferabilityofcurrency,maycausebusinesscontinuityissuesatglobalgoldrefineries(andthereforeitsabilitytogeneraterevenue),maymeanitcannottransportgoldfromitssitestorefineries,mayresultinfailures of various local administration, logistics and critical infrastructure, may cause social instability in WestAfrican countries which in turn could disrupt business continuity, and may result in additional and currentlyunknown liabilities.All or anyof the foregoingmaypresent risks to the investmentpropositionof Endeavour, itsliquidity,solvencyandabilitytomeetitsdebtobligationsastheyfalldue.

3 TRADEANDOTHERRECEIVABLES

June30,2020

December31,2019

ReceivableforsaleofNzemamine — 7,163VATreceivablei 21,660 7,487Receivablesforgoldsales 1,928 2,149Tradeandotherreceivablesii 13,974 2,429

Total $ 37,562 $ 19,228

i. VATreceivable

VATreceivablerelatestonetVATpaidtovendorsongoodsandservicespurchasedincountry.Thesebalancesareexpectedtobecollectedinthenexttwelvemonths.


6

ii. Tradeandotherreceivables

During the six months ended June 30, 2020 the Corporation provided $6.0 million to BCM Group to pay theremainingportionofaminingpermitthatwastransferredasapartoftheTabakotosaleinDecember2018,aswellas an additional $5.0million forworking capital purposes. The amounts are expected to be repaid in the nexttwelvemonthsandarenon-interestbearing.

4 INVENTORIES

June30,2020

December31,2019

Dorébars 11,422 15,496Goldincircuit 38,467 29,707Orestockpiles 56,807 52,577Sparepartsandsupplies 57,168 70,599Total $ 163,864 $ 168,379

AsofJune30,2020,therewasnoprovisiontoadjust inventorytonetrealizablevalue(December31,2019-$0.7million).

The cost of inventories recognized as an expense in the three and sixmonths ended June 30, 2020was $147.1millionand$314.0millionrespectivelyandwasincludedincostofsales(threeandsixmonthsendedJune30,2019-$155.3millionand$279.8millionrespectively).

5 PREPAIDEXPENSESANDOTHER

June30,2020

December31,2019

Deposits 1,682 1,511

Supplierprepayments 13,675 15,893

Other 3,442 1,138

Total $ 18,799 $ 18,542


7

6 MININGINTERESTS

MININGINTERESTS

DepletableNon

depletable

Property,plantandequipment

Assetsunderconstruction

Nonmining Total

Cost

Balanceasat1January,2019 549,057 261,108 711,192 397,230 9,846 1,928,433

Additions/expenditures 50,966 19,085 33,191 112,599 — 215,841

TransfersrelatedtoItyconstruction 225,981 — 171,728 (397,709) — —

Transferstoinventoryoncommercialproduction — — — (18,463) — (18,463)

Transfers 20,706 26,630 — (47,336) — —

Reclamationliabilitychangeinestimate (3,261) — — — — (3,261)

Adjustmentforchangeinaccountingpolicy — — 11,636 — — 11,636

Disposals — (7,317) (4,849) — — (12,166)

BalanceasatDecember31,2019 843,449 299,506 922,898 46,321 9,846 2,122,020

Additions/expenditures 53,732 30,550 13,705 17,372 1,404 116,763

Disposals — — (30,352) — — (30,352)

BalanceasatJune30,2020 $ 897,181 $ 330,056 $ 906,251 $ 63,693 $ 11,250 $ 2,208,431

AccumulatedDepreciation

Balanceasat1January,2019 170,887 422 208,929 — 4,353 384,591

Depreciation/depletion 80,317 — 119,957 — — 200,274

Impairment 45,007 — 82,373 — — 127,380

Adjustmentforchangeinaccountingpolicy — — (499) — — (499)

BalanceasatDecember31,2019 296,211 422 410,760 — 4,353 711,746

Depreciation/depletion 41,055 — 55,144 — 2,359 98,558

Disposals $ — $ — $ (26,204) $ — $ — $ (26,204)

BalanceasatJune30,2020 $ 337,266 $ 422 $ 439,700 $ — $ 6,712 $ 784,100

Carryingamounts

AtDecember31,2019 $ 547,238 $ 299,084 $ 512,138 $ 46,321 $ 5,493 $ 1,410,274

AtJune30,2020 $ 559,915 $ 329,634 $ 466,551 $ 63,693 $ 4,538 $ 1,424,331

During the six months ended June 30, 2020 the Corporation disposed of its mining fleet at its Karma mine inconnectionwithmovingallminingoperations to a contractor andwere leasedback for theCorporation'sminingoperating at Karma site. Included in the Condensed Interim Consolidated Statement of Comprehensive (Loss)/Earningsisagainof$4.1millionrelatedtothesaleandleasebackmininginterestassets(June30,2019:nil)


8

TheCorporation'sleasedassetsconsistofbuildings,plantandequipmentanditsvarioussegmentswhichareright-of-useassetsunderIFRS16.Thesehavebeenincludedwithintheproperty,plantandequipmentcategoryabove.

Plant HeavyEquipment Property June30,2020

BalanceasatJanuary1,2019 5,699 3,021 2,915 11,635Additions 1,061 — — 1,061Depreciationfortheyear (2,551) (827) (1,309) (4,687)BalanceasatDecember31,2019 4,209 2,194 1,606 8,009Additions 1,961 2,041 475 4,477Depreciationfortheperiod (1,233) (438) (643) (2,314)Disposals — (1,112) — (1,112)BalanceasatJune30,2020 $ 4,937 $ 2,685 $ 1,438 $ 9,060


9

Asummaryofthecarryingvaluesbypropertyisasfollows:

AgbaouMine

ItyMine

KarmaMine

HoundéMine KalanaProjectExplorationProperties

Nonmining Total

Cost

Balanceasat1January,2019 291,176 476,161 373,466 543,982 193,099 13,792 36,757 1,928,433

Additions/expenditures 25,225 79,273 33,175 49,932 11,868 7,205 9,163 215,841

Transferstoinventoryoncommercialproduction — (18,463) — — — — — (18,463)

Transfers 230 (23,301) 1,063 782 1,020 23,776 (3,570) —

Reclamationliabilitychangeinestimate (434) 3,622 (648) (5,801) — — — (3,261)

Adjustmentforchangeinaccountingstandard 3,291 2,615 — 2,816 — — 2,914 11,636

Disposals — (4,849) — — — (7,317) — (12,166)

BalanceasatDecember31,2019 319,488 515,058 407,056 591,711 205,987 37,456 45,264 2,122,020

Additions/expenditures 7,272 29,167 9,430 31,649 4,199 32,501 2,545 116,763

Disposals — (1,551) (28,801) — — — — (30,352)

BalanceasatJune30,2020 $ 326,760 $ 542,674 $ 387,685 $ 623,360 $ 210,186 $ 69,957 $ 47,809 $ 2,208,431

Accumulateddepreciationandimpairment

Balanceasat1January,2019 155,062 62,927 76,973 83,288 — 3,169 3,172 384,591

Depreciation/depletion 45,129 36,733 48,288 65,039 — 207 4,878 200,274

Impairment — — 127,380 — — — — 127,380

Disposals — (499) — — — — — (499)

BalanceasatDecember31,2019 200,191 99,161 252,641 148,327 — 3,376 8,050 711,746

Depreciation/depletion 18,739 18,312 29,493 27,881 — 328 3,805 98,558

Disposals — (439) (25,516) (249) — — — (26,204)

BalanceasatJune30,2020 $ 218,930 $ 117,034 $ 256,618 $ 175,959 $ — $ 3,704 $ 11,855 $ 784,100

Carryingamounts

AtDecember31,2019 $ 119,297 $ 415,897 $ 154,415 $ 443,384 $ 205,987 $ 34,080 $ 37,214 $ 1,410,274

AtJune30,2020 $ 107,830 $ 425,640 $ 131,067 $ 447,401 $ 210,186 $ 66,253 $ 35,954 $ 1,424,331


10

7 OTHERLONG-TERMASSETS

Otherlong-termassetsarecomprisedof:

June30,2020

December31,2019

Workingcapitalloanreceivable 565 541Restrictedcashi 13,115 9,958Long-termstockpiles 21,523 22,490Long-termcriticalsparepartsandsupplies 12,846 14,670Long-termreceivableii 8,822 13,322Total $ 56,871 $ 60,981

i. Restrictedcash

Restrictedcashreflectscashsetasidefortheassetretirementobligationsasrequiredbythelocalgoverningbodies.

ii. Long-termreceivable

Long-term receivablesmainly consist of thenet smelter royalty ("NSR") connectedwith the sale of the Tabakotomine,whichisnotexpectedtobereceivedinthenexttwelvemonthsandhasbeenclassifiedaslong-termasatJune30,2020.

8 TRADEANDOTHERPAYABLES

Tradeandotherpayablesconsistofthefollowing:

June30,2020

December31,2019

Tradeaccountspayable 136,595 147,461

Royaltiespayable 11,288 2,444

Payrollandsocialcharges 7,376 10,714

Otherpayables 11,718 12,648

Total $ 166,977 $ 173,267


11

9 FINANCEOBLIGATIONS

TheCorporationhasenteredintothefollowingfinanceobligations:

June30,2020

December31,2019

Financingarrangementsi 64,463 78,081Leaseliabilitiesii 11,638 8,753Financeobligations $ 76,101 $ 86,834

June30,2020

December31,2019

Financeobligations 76,101 86,834

Less:currentportion (29,739) (29,431)

Long-termfinanceobligations $ 46,362 $ 57,403

i. Financingarrangements

June30,2020

December31,2019

Financingarrangements 64,463 78,081


Long-termfinancingarrangement $ 40,035 $ 52,552

ThepresentvalueoftheCorporation’slong-termequipmentfinancialobligationsissplitbelow.Thepresentvalueoftheminimumpaymentsaretheinstallmentsoverthelifeofthearrangementdiscountedtopresentvalue.Paymentsareapportionedbetweenthefinancechargeandthereductionoftheoutstandingliability.

June30,2020

December31,2019

Notlaterthanoneyear 29,841 30,562

Laterthanoneyearandnotlaterthanfiveyears 41,241 56,390

71,082 86,952

Lessfuturefinancecharges (6,619) (8,871)

Presentvalueofminimumfinancepayments $ 64,463 $ 78,081

June30,2020

December31,2019

HoundéMine 32,680 39,340

ItyMine 31,783 38,741

Presentvalueofminimumfinancepayments $ 64,463 $ 78,081


12

ii. Leaseliabilities

Theleaseliabilitiesincludedwithinfinancialobligationsinthecondensedinterimconsolidatedstatementoffinancialpositionareasfollows:

June30,2020

December31,2019

Leaseliabilities 11,638 8,753


Long-termleaseliabilities $ 6,327 $ 4,851

Amounts recognized in the condensed interim consolidated statement of comprehensive (loss)/earnings are asfollows:


June30,2020

June30,2019

June30,2020

June30,2019

Interestonleaseliabilities 180 218 318 399

Depreciationonright-of-useassets 1,196 1,268 2,314 2,326

Recognizedinnet(loss)/earnings $ 1,376 $ 1,486 $ 2,632 $ 2,725

10 LONG-TERMDEBT

June30,2020

December31,2019

Corporateloanfacilityi 430,000 310,000

Deferredfinancingcosts (3,677) (5,059)Revolvingcreditfacility $ 426,323 $ 304,941

Convertibleseniornotesii 307,137 302,600

Conversionoptioniii 92,657 31,439Convertibleseniorbond $ 399,794 $ 334,039

Totallongtermdebt $ 826,117 $ 638,980

TheCorporationincurredthefollowingfinancecostsintheperiod:


Note June30,2020

June30,2019

June30,2020

June30,2019

Interestexpense 10,823 9,640 21,150 19,518

Amortizationofdeferredfacilityfees 757 746 1,497 1,350

Commitment,structuringandotherfees 402 2,000 997 3,240

Less:Capitalizedborrowingcosts 6 — — — (6,803)

Totalfinancecosts $ 11,982 $ 12,386 $ 23,644 $ 17,305


13

i. CorporateLoanFacility

OnMay17, 2019, theCorporation renewed its $430.0million revolving credit facility ("RCF")with a syndicateofleadinginternationalbanks.InthesixmonthsendedJune30,2020,theCorporationdrewdownanadditional$120.0milliononitsRCF.

ThekeytermsoftheRCFinclude:


• InterestaccruesonaslidingscaleofbetweenLIBORplus2.95%to3.95%basedon theCorporation’s leverageratio.

• CommitmentfeesfortheundrawnportionoftheRCFof1.03%.

• ThetermoftheRCFisfouryears,maturinginSeptember2021.

• TheprincipaloutstandingontheRCFisrepayableasasinglebulletpaymentonthematuritydate.

• BankingsyndicateincludesSociétéGénérale,ING,CitibankN.A.,InvestecBankPlc,MacquarieBankLtd,BarclaysBank,HSBCandBMO.

• TheRCFcanberepaidatanytimewithoutpenalty.

ii. ConvertibleSeniorNotes

On February 8, 2018, the Corporation completed a private placement of convertible senior notes with a totalprincipalamountof$330.0millionduein2023(the“Notes”).Theinitialconversionrateis41.84oftheCorporation’scommonshares(“Shares”)per$1,000Note,oraninitialconversionpriceofapproximately$23.90(CAD$29.47)pershare.

TheNotesbearinterestatacouponrateof3%payablesemi-annually inarrearsonFebruary15andAugust15ofeach year, beginning on August 15, 2018. The Notes mature on February 15, 2023, unless redeemed earlier,repurchased or converted in accordance with the terms of the Notes. The Corporation may, subject to certainconditions,electtosatisfytheprincipalamountandconversionoptiondueatmaturityoruponredemptionthroughthepaymentordeliveryofanycombinationofSharesandcash.

ThekeytermsoftheConvertibleSeniorNotesinclude:


• Couponrateof3%payableonasemi-annualbasis.

• Thetermofthenotesis5years,maturinginFebruary2023.

• Thenotesarereimbursablethroughthepaymentordeliveryofsharesand/orcash.

• Theinitialconversionpriceis$23.90(CAD$29.47)pershare.

• Thereferencesharepriceofthenotesis$18.04(CAD$22.24)pershare.

Foraccountingpurposes,theCorporationmeasurestheNotesatamortizedcost,accretingtomaturityoverthetermoftheNotes.Theconversionoptionisanembeddedderivativeandisaccountedforasafinancialliabilitymeasuredat fair value through profit or loss, as the Corporation has the ability to settle the option at fair value in cash,commonshares,oracombinationofcashandcommonsharesincertaincircumstances.

Theunrealizedgain/lossontheconvertiblenoteoptionforthethreeandsixmonthsendedJune30,2020wasanunrealizedlossof$63.9millionandanunrealizedlossof$61.2millionrespectively(threeandsixmonthsendedJune30,2019-unrealizedlossof$4.5millionandanunrealizedgainof$3.9millionrespectively).


14

TheliabilitycomponentfortheNotesatJune30,2020hasaneffectiveinterestrateof6.2%(December31,2019:6.2%)andwasasfollows:

June30,2020

December31,2019

Liabilitycomponentatbeginningoftheyear 302,600 293,893

Interestexpenseintheyear 9,487 18,607

Less:Interestpaymentsintheyear (4,950) (9,900)

Total $ 307,137 $ 302,600

iii. Conversionoption

The conversionoption related to theNotes is recordedat fair value, using a valuationmodel,with the followingassumptions;volatilityof43%(December31,2019,26%),riskfreerateof0.2%(December31,2019,2.6%),termofthe conversion option 2.63 (December 31, 2019, 3.19 years), and a share price of $24.10 (December 31, 2019,$18.89).

June30,2020

December31,2019

Conversionoptionatbeginningoftheyear 31,439 25,076Fairvalueadjustment 61,218 6,363Total $ 92,657 $ 31,439

11 OTHERLONG-TERMLIABILITIES

June30,2020

December31,2019

Environmentalrehabilitationprovision 39,184 38,521

DSUliabilities 4,551 3,390

Total $ 43,735 $ 41,911

12 SHARECAPITAL

i. Votingshares

Authorized

• 200,000,000votingsharesof$0.10parvalue

• 100,000,000undesignatedshares


15

ii. Share-basedcompensation

Thefollowingtablesummarizestheshare-basedcompensationexpense:


June30,2020

June30,2019

June30,2020

June30,2019

AmortizationandchangeinfairvalueofDSUs 1,687 251 1,160 208

AmortizationandchangeinfairvalueofPSUs 3,255 4,134 5,405 6,777

Totalshare-basedexpenses $ 4,942 $ 4,385 $ 6,565 $ 6,985

iii. Options

Asummaryofthechangesinshareoptionsispresentedbelow:

Optionsoutstanding

Weightedaverageexerciseprice

(C$)

AtDecember31,2018 50,535 16.26

Exercised (35,119) 10.99

Expired (466) 24.68

AtDecember31,2019,andatJune30,2020 14,950 10.94

ThefollowingtablesummarizesinformationabouttheexercisableshareoptionsoutstandingasatJune30,2020:

ExercisePrices(C$)

Outstanding ExercisableWeightedaverageexerciseprice(C$)

Weightedaverageremaining

contractuallife

$8.00-$14.99 14,950 14,950 $ 10.94 0.70years


16

iv. Shareunitplans

Asummaryofthechangesinshareunitplansispresentedbelow:

DSUsoutstanding

Weightedaverage

grantprice(C$)

PSUsoutstanding

Weightedaverage

grantprice(C$)

AtDecember31,2018 191,706 12.20 2,845,880 19.25Granted 26,871 22.60 1,556,328 18.63Exercised (39,893) 12.61 (738,078) 18.15Forfeited — — (365,753) 20.62

AtDecember31,2019 178,684 13.67 3,298,377 19.05Granted 10,886 26.19 1,214,996 22.59Exercised — — (1,066,143) 19.00Forfeited — — (421,146) 20.08

AtJune30,2020 189,570 14.39 3,026,084 20.35

v. Deferredshareunits

On January 26, 2013, the Corporation established a deferred share unit plan (“DSU”) for the purposes ofstrengtheningthealignmentof interestsbetweennon-executivedirectorsoftheCorporationandshareholdersbylinkingaportionoftheannualdirectorcompensationtothefuturevalueoftheCorporation’scommonshares.Uponestablishing theDSUplan fornon-executivedirectors, theCorporationno longergrantsoptions tonon-executivedirectors.

TheDSUplanallowseachnon-executivedirectortochoosetoreceive, intheformofDSUs,allorapercentageoftheirdirector’sfees,whichwouldotherwisebepayableincash.CompensationforservingoncommitteesmustbepaidintheformofDSUs.TheplanalsoprovidesfordiscretionarygrantsofadditionalDSUsbytheBoard.EachDSUvestsuponawardbutisdistributedonlywhenthedirectorhasceasedtobeamemberoftheBoard.Vestedunitsaresettledincashbasedonthecommonsharepriceatthedateofsettlement.

ThefairvalueoftheDSUsisdeterminedbasedonmultiplyingthe5dayvolumeweightedaveragesharepriceoftheCorporationbythenumberofDSUsattheendofthereportingperiod.

Thetotal fairvalueofDSUsatJune30,2020was$4.6million(December31,2019–$3.4million). ThetotalDSUshare-based compensation recognized in thecondensed interim consolidated statementof comprehensive (loss)/earningswasanexpenseof$1.7millionandanexpenseof$1.2millionforthethreeandsixmonthsendedJune30,2020respectively(forthethreeandsixmonthsendedJune30,2019,expenseof$nil).

vi. Performanceshareunits

In March 2014, following a review of its executive compensation programs and pay practices, the Corporationintroducedachangeinitslong-termincentiveplan(“LTIPlan”)toincludeaportionofperformance-linkedshareunitawards (“PSUs”). The PSU program is intended to increase the pay mix in favor of long-term equity-basedcompensationwiththree-yearcliff-vestingtoserveasanemployeeretentionmechanism.

ThefairvalueofthePSUsisdeterminedbasedonTotalShareholderReturn(“TSR”)relativetopeercompaniesandachieving certain operational performance measures (key future operational indicators – Net debt / adjustedearningsbeforeinterest,tax,depreciationandamortization,productionandEnvironmental,SocialandGovernance


17

("ESG")targets).ThefairvaluerelatedtotheTSRportionisdeterminedusingamulti-assetMonteCarlosimulationmodelwhile the fairvaluerelatedto theachievementofoperationalperformancemeasures isdeterminedbasedtheprobabilityofreachingtheoperationaltargets.

ThetotalPSUshare-basedexpenserecognizedinthecondensedinterimconsolidatedstatementofcomprehensive(loss)/earningsforthethreeandsixmonthsendedJune30,2020was$3.3millionand$5.4millionrespectively(forthethreeandsixmonthsendedJune30,2019,expenseof$4.1millionand$6.8millionrespectively).

vii. Basicanddilutedearningspershare

Dilutednetearningspersharewascalculatedbasedonthefollowing:


June30,2020

June30,2019

June30,2020

June30,2019

Basicweightedaveragenumberofsharesoutstanding 110,993,240 109,919,887 110,788,798 109,734,405

Effectofdilutivesecurities1

Stockoptions — 9,263 14,950 —

Dilutedweightedaveragenumberof

sharesoutstanding 110,993,240 109,929,150 110,803,748 109,734,405

TotalcommonsharesoutstandingatJune30 110,993,240 109,924,857 110,993,240 109,924,857

TotalpotentialdilutedcommonsharesatJune30 115,092,032 114,166,444 115,092,032 114,166,444

1Dilutedearningspersharewasdeterminedusingthebasicweightedaveragesharesoutstandingratherthanthedilutedweighted average sharesoutstanding as the effects of dilutive securitieswouldhavebeen anti-dilutive inperiodswheretheCorporationhasanetloss.

13 NON-CONTROLLINGINTERESTS

Thecompositionofthenon-controllinginterests(“NCI”)isasfollows:

AgbaouGoldOperationsSA

(AgbaouMine)15%

SocietedesMinesd'Ity(ItyMine)

15%

RiverstoneKarmaSA

(KarmaMine)10%

HoundéGoldOperations

10%

SocietedesMinesd'Orde

Kalana(Kalana

Project)20%

Total

AtDecember31,2018 50,473 16,405 11,983 6,944 522 86,327

AcquisitionofNCI — (4,101) — — — (4,101)

Netearnings 8,026 11,553 2,019 960 — 22,558

Dividenddistribution (5,064) — — (1,090) — (6,154)

AtDecember31,2019 $ 53,435 $ 23,857 $ 14,002 $ 6,814 $ 522 $ 98,630

Netearnings 5,296 11,270 2,213 5,299 — 24,078

AtJune30,2020 $ 58,731 $ 35,127 $ 16,215 $ 12,113 $ 522 $ 122,708

Forsummarizedinformationrelatedtothesesubsidiaries,refertoNote17,SegmentedInformation.


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i. AcquisitionofinterestinIty

OnMay19,2017,theCorporationacquiredanadditional25%stakeinSociétédesMinesd'Ityfromoneofthenon-controllingintereststherebyincreasingitsownershipto80%forconsiderationof$54.4millionanda$5perounceroyalty foranyadditional reservesaddedsubsequenttoDecember31,2016.Duringthefirstquarterof2020, theCorporationpaid$5.4millionaspartofthistransactionofwhichonly$5millionwasinitiallyrecordedaspartoftheinvestment. The additional $0.4million has been disclosed in the Statement of Changes in Equity for the periodended30June2020.

OnJanuary11,2019,theCorporationincreaseditsownershipstakeintheItyMinefrom80%to85%.Inexchangefor the additional 5% interest in the Itymine (relating to the Société desMines d'Ity and Société desMines deDaapleuentities),theCorporationgrantedtheminorityshareholder1,072,305commonshareswithavalueof$17.6millioninadditiontoa$0.5millioncashpayment.

Followingthistransaction,theCorporationowns85%oftheItymine,withtheGovernmentofCoted’Ivoireowning10%andSODEMI(agovernmentownedminingcompany)owningtheremaining5%.

14 LOSSONFINANCIALINSTRUMENTS


Note June30,2020

June30,2019

June30,2020

June30,2019

Gainonotherfinancialinstruments 535 566 590 1,216ChangeinvalueofreceivableatFVTPL 3 (175) — (307) —Realizedgainonforwardcontract 15 — — 6,686 —Lossongoldrevenueprotectionprogram 15 (10,171) (11,171) (21,156) (12,013)Unrealized(loss)/gainonconvertibleseniorbondderivative 10 (63,893) (4,461) (61,218) 3,875Gain/(loss)onforeignexchange 1,773 3,309 (18) (3,712)Totallossonfinancialinstruments $ (71,931)$ (11,757)$ (75,423)$ (10,634)

15 DERIVATIVEFINANCIALINSTRUMENTS

Thefollowingtablesummarizesthederivativefinancialliabilities:

June30,2020

December31,2019

Goldrevenueprotectionstrategy — (10,349)Derivativefinancialliabilities,currentportion $ — $ (10,349)


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Thefollowingtablesummarizesthe(loss)/gainonderivativefinancialassets/(liabilities)thathavebeenrecognizedthroughthecondensedinterimconsolidatedstatementofcomprehensive(loss)/earnings:


June30,2020

June30,2019

June30,2020

June30,2019

Realizedlossongoldrevenueprotectionstrategyi (10,171) (802) (21,156) (937)

Realizedgainonforwardcontractii — — 6,686 —

Unrealizedlossongoldrevenueprotectionstrategyi — (10,369) — (11,076)

Lossonderivativefinancialinstruments $ (10,171)$ (11,171)$ (14,470)$ (12,013)

i. Goldrevenueprotectionstrategy

IntheyearendedDecember31,2019,theCorporation’sdeferredpremiumcollarstrategyforthe15-monthperiodfromFebruary2018toApril2019expired.Overthelifeofthecollar,theCorporationrealizedagainof$5.1million.

IntheyearendedDecember31,2019,theCorporationimplementedadeferredpremiumcollarstrategy(“Collar”)usingwrittencalloptionsandboughtputoptionsforthe12-monthperiodfromJuly2019toJune2020.Theprogramcoveredatotalof360,000ounces,representingapproximately50%ofEndeavour’stotalestimatedgoldproductionfortheperiod,withanaveragefloorpriceof$1,358andaceilingpriceof$1,500.

InthesixmonthsendedJune30,2020,theCorporation'sdeferredpremiumcollarstrategyforthe12-monthperiodfromJuly2019toJune2020expired.Overthelifeofthecollar,theCorporationrealizedalossof$35.9million.

TheCollarwasnotdesignatedasahedgebytheCorporationandwasrecordedatitsfairvalueattheendofeachreporting period with changes in fair value recorded in the condensed interim consolidated statement ofcomprehensive(loss)/earnings.

ThetotalpremiumpaidforenteringintotheCollarof$8.7millionwasincludedaspartoftheCollarfairvalueandwas cash-settled on a net basis as monthly contracts matured. In the six months ended June 30, 2020, theCorporation paid $19.5 million for settlements of the Collar, included in realized gains and losses on derivativefinancialinstruments.

ii. Forwardcontract

OnMarch9,2020,theCorporationenteredintoagoldforwardcontracttomanagetheriskofchangesinthemarketpriceofgold.Under thegold forwardcontract, theCorporationbought73,919ouncesofgoldatanaveragegoldpricesof$1,590perounce.OnMarch30,2020,theCorporationexitedthegoldforwardcontractatafinalgoldpriceof$1,681perounceresultinginarealizedgainof$6.7million.


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16 INCOMETAXES

The Corporation operates in numerous countries, and accordingly it is subject to, and pays annual income taxesunder the various income tax regimes in the countries in which it operates. The Corporation is not subject tocorporate taxation in the Cayman Islands. However, the taxable earnings of the corporate entities in Barbados,BurkinaFaso,Canada,Côted’Ivoire,Mali,Monaco,France,LuxembourgandtheUnitedKingdomaresubjecttotaxunder the tax law of the respective jurisdiction. From time to time the Corporation is subject to a review of itsincome tax filings and in connection with such reviews, disputes can arise with the taxing authorities over theinterpretationorapplicationofcertainrulestotheCorporation'sbusinessconductedwithinthecountryinvolved.IftheCorporationisunabletoresolveanyofthesemattersfavorably,theremaybeamaterialadverseimpactontheCorporation'sfinancialperformance,cashflowsorresultsofoperations.Intheeventthatmanagement'sestimateofthe future resolution of these matters change, the Corporation will recognize the effects of the changes in itscondensedinterimconsolidatedfinancialstatementsintheperiodthatsuchchangesoccur.


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17 SEGMENTEDINFORMATION

The Corporation operates in three principal countries, Burkina Faso (Karma and Houndé mines), Côte d’Ivoire(Agbaou and Ity mines), and Mali (Kalana Project). The following table provides the Corporation’s results byoperating segment in theway information is provided to and used by the Corporation’s chief operating decisionmaker, which is the CEO, tomake decisions about the allocation of resources to the segments and assess theirperformance.

THREEMONTHSENDEDJUNE30,2020AgbaouMine

Côted’Ivoire

ItyMine

Côted’Ivoire

KarmaMine

BurkinaFaso

HoundéMineBurkinaFaso

Other Total

RevenueGoldrevenue 43,503 79,419 29,973 100,189 — 253,084

CostofsalesOperatingexpenses (20,080) (29,702) (15,296) (36,304) (1,926) (103,308)

Depreciationanddepletion (8,295) (8,466) (11,318) (13,726) (1,955) (43,760)

Royalties (2,464) (4,453) (2,828) (8,026) — (17,771)

Earnings/(Loss)frommineoperations 12,664 36,798 531 42,133 (3,881) 88,245

Corporatecosts — — — — (5,049) (5,049)

Acquisitionandrestructuringcosts — — — — (2,589) (2,589)

Share-basedpayments — — — — (4,942) (4,942)

Exploration — — — — (1,796) (1,796)

Earnings/(Loss)fromoperations 12,664 36,798 531 42,133 (18,257) 73,869

Otherincome/(expenses)

Gain/(Loss)onfinancialinstruments 326 2,133 108 (652) (73,846) (71,931)

Financecosts (164) (610) (95) (823) (10,290) (11,982)

Otherincome/(expenses) 14 23 1,522 (6) (3,344) (1,791)

Earnings/(Loss)beforetaxes 12,840 38,344 2,066 40,652 (105,737) (11,835)

Currentincometax(expense)/recovery (2,050) (2,232) 4,479 (2,510) — (2,313)

Deferredincometax(expense)/recovery (2,871) (1,907) 1,539 (5,229) — (8,468)

Netearnings/(loss)fromcontinuingoperations $ 7,919 $ 34,205 $ 8,084 $ 32,913 $ (105,737) $ (22,616)

THREEMONTHSENDEDJUNE30,2019AgbaouMine

Côted’Ivoire

ItyMine

Côted’Ivoire

KarmaMine

BurkinaFaso


Other Total

RevenueGoldrevenue 45,108 82,208 21,042 71,013 — 219,371

CostofsalesOperatingexpenses (22,891) (30,122) (16,617) (33,688) — (103,318)


Royalties (1,712) (3,028) (1,822) (4,470) — (11,032)

Earnings/(Loss)frommineoperations 8,298 38,560 (8,961) 16,612 (1,458) 53,051

Corporatecosts — — — — (5,143) (5,143)


Exploration — — — — (1,674) (1,674)

Earnings/(Loss)fromoperations 8,298 38,560 (8,961) 16,612 (12,660) 41,849


Gain/(Loss)onfinancialinstruments (655) 923 (506) 606 (12,125) (11,757)

Financecosts (151) (632) (70) (1,135) (10,398) (12,386)

Otherincome/(expenses) — — — — 4,574 4,574

Earnings/(Loss)beforetaxes 7,492 38,851 (9,537) 16,083 (30,609) 22,280

Currentincometax(expense)/recovery (2,819) (14,002) — 3,402 (426) (13,845)

Deferredincometax(expense)/recovery (2,846) 611 (3) 707 — (1,531)

Netearnings/(loss)fromcontinuingoperations $ 1,827 $ 25,460 $ (9,540) $ 20,192 $ (31,035) $ 6,904


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SIXMONTHSENDEDJUNE30,2020AgbaouMine

Côted’Ivoire

ItyMine

Côted’Ivoire

KarmaMine

BurkinaFaso


Other Total

Revenue

Goldrevenue 87,084 180,142 66,735 189,025 — 522,986

Costofsales

Operatingexpenses (38,391) (64,932) (34,055) (78,407) (1,926) (217,711)


Royalties (4,797) (9,216) (6,079) (15,131) — (35,223)

Earnings/(Loss)frommineoperations 26,000 86,849 1,615 65,358 (6,059) 173,763

Corporatecosts — — — — (10,280) (10,280)

Acquisitionandrestructuringcosts — — — — (6,919) (6,919)


Exploration — — — — (3,129) (3,129)

Earnings/(Loss)fromoperations 26,000 86,849 1,615 65,358 (32,952) 146,870


(Loss)/Gainonfinancialinstruments (467) 1,782 (144) (295) (76,299) (75,423)

Financecosts (323) (1,363) (134) (1,749) (20,075) (23,644)

Other(expenses)/income — 23 1,522 (13) (1,388) 144

Earnings/(Loss)beforetaxes 25,210 87,291 2,859 63,301 (130,714) 47,947

Currentincometax(expense)/recovery (6,743) (14,473) 4,209 (9,004) (1) (26,012)

Deferredincometax(expense)/recovery (2,584) (1,361) 351 (5,494) — (9,088)

Netearnings/(loss)fromcontinuingoperations $ 15,883 $ 71,457 $ 7,419 $ 48,803 $ (130,715) $ 12,847

SIXMONTHSENDEDJUNE30,2019AgbaouMine

Côted’Ivoire

ItyMine

Côted’Ivoire

KarmaMine

BurkinaFaso

HoundéProjectBurkinaFaso

Other Total

Revenue

Goldrevenue 89,156 87,694 45,315 148,516 — 370,681

Costofsales

Operatingexpenses (40,326) (38,631) (41,029) (71,695) — (191,681)


Royalties (3,415) (3,229) (3,634) (9,743) — (20,021)

Earnings/(Loss)frommineoperations 24,622 35,336 (21,866) 35,158 (2,373) 70,877

Corporatecosts — — — — (11,204) (11,204)Share-basedpayments — — — — (6,985) (6,985)Exploration — — — — (6,035) (6,035)Earnings/(Loss)fromoperations 24,622 35,336 (21,866) 35,158 (26,597) 46,653


Lossonfinancialinstruments (1,627) (1,542) (1,313) (1,303) (4,849) (10,634)Financecosts (342) (473) (140) (2,354) (13,996) (17,305)Other(expenses)/income — 301 — — 4,076 4,377Earnings/(Loss)beforetaxes 22,653 33,622 (23,319) 31,501 (41,366) 23,091Currentincometax(expense)/recovery (7,570) (15,311) — (1,756) (2,686) (27,323)Deferredincometax(expense)/recovery (948) (1,279) 5,095 (3,175) — (307)Netearnings/(loss)fromcontinuingoperations $ 14,135 $ 17,032 $ (18,224) $ 26,570 $ (44,052) (4,539)

Segmentrevenuereportedrepresentsrevenuegeneratedfromexternalcustomers. Therewereno inter-segmentsalesduringtheperiodsendedJune30,2020orJune30,2019.

TheCorporationisnoteconomicallydependentonalimitednumberofcustomersforthesaleofgoldbecausegoldcanbesoldthroughnumerouscommoditymarkettradersworldwide.


23

The Corporation’s assets and liabilities, including geographic location of those assets and liabilities, are detailedbelow:

ASATJUNE30,2020AgbaouMine

Côted’Ivoire

ItyMine

Côted’Ivoire

KarmaMine

BurkinaFaso


Other Total

Mininginterests 107,830 425,640 131,067 447,401 312,393 1,424,331

Currentassets 104,290 103,652 91,260 158,161 114,679 572,042

Otherlong-termassets 5,913 20,071 3,076 18,291 9,520 56,871

Deferredtaxassets — 3,529 351 — — 3,880

Totalassets $ 218,033 $ 552,892 $ 225,754 $ 623,853 $ 436,592 $2,057,124

Currentliabilities 37,357 65,446 26,701 75,440 44,414 249,358

Long-termliabilities 9,558 32,099 10,193 31,141 833,223 916,214

Deferredtaxliabilities 1,975 — — 29,759 25,719 57,453

Totalliabilities $ 48,890 $ 97,545 $ 36,894 $ 136,340 $ 903,356 $1,223,025

ASATDECEMBER31,2019AgbaouMine

Côted’Ivoire

ItyMine

Côted’Ivoire

KarmaMine

BurkinaFaso


Other Total

Mininginterests 119,297 415,897 154,415 443,384 277,281 1,410,274

Currentassets 81,838 84,580 68,275 118,006 43,339 396,038

Otherlong-termassets 5,843 22,714 2,709 15,840 13,875 60,981

Deferredtaxassets 609 4,889 — — — 5,498

Totalassets $ 207,587 $ 528,080 $ 225,399 $ 577,230 $ 334,495 $1,872,791

Currentliabilities 42,997 56,695 38,022 77,166 53,135 268,015

Long-termliabilities 9,793 38,321 7,669 37,434 645,077 738,294

Deferredtaxliabilities — — — 24,266 25,719 49,985

Totalliabilities $ 52,790 $ 95,016 $ 45,691 $ 138,866 $ 723,931 $1,056,294


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18 CAPITALMANAGEMENT

TheCorporation’sobjectivesofcapitalmanagementaretosafeguardtheentity’sabilitytosupporttheCorporation’snormal operating requirements on an ongoing basis, continue the development and exploration of its mineralpropertiesandsupportanyexpansionaryplans.

Inthemanagementofcapital, theCorporation includesthecomponentsofequity, financeobligations,derivativesandlong-termdebt,netofcashandcashequivalents,restrictedcashandmarketablesecurities.

Capital,asdefinedabove,issummarizedinthefollowingtable:

June30,2020

December31,2019

Equity 834,099 816,497

Long-termdebt 826,117 638,980

Financeobligations 76,101 86,834

Derivativefinancialliabilities — 10,349

1,736,317 1,552,660

Less:

Cashandcashequivalents (351,817) (189,889)

Cash-restricted (13,115) (9,958)

Marketablesecurities (1,839) (1,224)

Total $1,369,546 $1,351,589

TheCorporationmanages itscapitalstructureandadjusts itconsideringchanges in itseconomicenvironmentandthe risk characteristics of the Corporation’s assets. To effectively manage the entity’s capital requirements, theCorporation has in place a planning, budgeting and forecasting process to help determine the funds required toensuretheCorporationhastheappropriateliquiditytomeetitsoperatingandgrowthobjectives.TheCorporationisnotsubjecttoanyexternallyimposedcapitalrequirementswiththeexceptionofcomplyingwithcovenantsundertheRCF.AsatJune30,2020andDecember31,2019,theCorporationwasincompliancewiththesecovenants.

19 FINANCIALINSTRUMENTS

i. Financialassetsandliabilities

The Corporation’s financial instruments consist of cash, restricted cash, marketable securities, trade and otherreceivables, working capital loan, long term receivable, trade and other payables, derivative financial assets/liabilities, finance obligations and current and long-term debt. The fair value of these financial instrumentsapproximatestheircarryingvalue,unlessotherwisenotedbelow,exceptfortheconvertiblenote,whichhasafairvalueofapproximately$389.2million(December31,2019-$351.5million).


25

The Corporation has certain financial assets and liabilities that are held at fair value. The fair value hierarchyestablishesthreelevelstoclassifytheinputstovaluationtechniquestomeasurefairvalue:

Classificationoffinancialassetsandliabilities

Level1–quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

Level2–inputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetorliability,eitherdirectly(thatis,asprices)orindirectly(thatis,derivedfromprices);and

Level3–inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(thatis,unobservableinputs).

As at each of June 30, 2020 and December 31, 2019, the levels in the fair value hierarchy into which theCorporation’s financial assets and liabilities measured and recognized in the condensed interim consolidatedstatementoffinancialpositionatfairvaluearecategorizedasfollows:

ASATJUNE30,2020

NoteLevel1Input

Level2Input

Level3Input

AggregateFairValue

Assets:

Cash 351,817 — — 351,817

Cash-restricted 13,115 — — 13,115

ReceivableforsaleofTabakotomine 7 — — 8,822 8,822

Marketablesecurities 1,839 — — 1,839

Total $ 366,771 $ — $ 8,822 $ 375,593

Liabilities:

ConversionoptiononNotes 10 — (92,657) — (92,657)

Total $ — $ (92,657)$ — $ (92,657)

ASATDECEMBER31,2019

NoteLevel1Input

Level2Input

Level3Input

AggregateFairValue

Assets:

Cash 189,889 — — 189,889

Cash-restricted 9,958 — — 9,958

ReceivableforsaleofNzemamine 3 — — 7,163 7,163

ReceivableforsaleofTabakotomine 7 — — 13,322 13,322

Marketablesecurities 1,224 — — 1,224

Total $ 201,071 $ — $ 20,485 $ 221,556

Liabilities:

ConversionoptiononNotes 10 — (31,439) — (31,439)

Derivativefinancialinstruments 15 — (10,349) — (10,349)

Total $ — $ (41,788)$ — $ (41,788)

There were no transfers between level 1 and 2 during the year. The fair value of level 3 financial assets wasdeterminedusingaMonteCarlovaluationmethod,takingintoaccountassumptionswithrespecttogoldpricesanddiscountratesaswellasestimateswithrespecttoproductionandoperatingresultsatthedisposedmine.


26

ii. Financialinstrumentriskexposure

TheCorporation’sactivitiesexpose it toavarietyof risks thatmay includecredit risk, liquidity risk, currency risk,interest rate risk andotherprice risks, includingequityprice risk. TheCorporationexamines thevarious financialinstrumentriskstowhichitisexposedandassessesanyimpactandlikelihoodofthoserisks.

CreditRisk

CreditriskistheriskthatthecounterpartytoafinancialinstrumentwillcauseafinanciallossfortheCorporationbyfailingtodischargeitsobligations.Creditriskarisesfromcash,restrictedcash,marketablesecurities,tradeandotherreceivables,long-termreceivableandotherassets.

TheCorporationcloselymonitors its financialassetsanddoesnothaveanysignificantconcentrationofcreditriskother than receivable balances owed from the governments in the countries the Corporation operates in and itsreceivablefromtheBCMGroup.

BCMGroup,aprivateminingcontractorandoperator, isthecounterpartywhoacquiredtheNzemaandTabakotominesin2017and2018respectively,andfromwhomthereceivablesareultimatelydue.TheCorporationsignedanomnibus settlement agreement in November 2019, which offset certain amounts outstanding between the twoparties,resultingincashinstallmentsof$6.8millionreceivedin2020relatingtothesaleofNzemamine.FurthertoadditionalamountspaidonbehalfofBCMGroupintheperiod,theCorporationreceived$4.5millioninthethreemonthsendedMarch31,2020,inrelationtothereceivablefromthesaleoftheTabakotomine.

Long-termreceivablesof$8.8millionmainlyconsistofareceivableandNSRassociatedwiththesaleoftheTabakotomineinDecember2018.TheCorporationsellsitsgoldtolargeinternationalorganizationswithstrongcreditratings,andthehistoricallevelofcustomerdefaults isminimal.Asaresult,thecreditriskassociatedwithgoldtradereceivablesatJune30,2020isconsideredtobenegligible.TheCorporationdoesnotrelyonratingsissuedbycreditratingagenciesinevaluatingcounterparties’relatedcreditrisk.

TheCorporation’smaximumexposuretocreditriskisasfollows:

June30,2020

December31,2019

Cash 351,817 189,889

Tradeandotherreceivables 3 37,562 19,228

Workingcapitalloan 7 565 541

Marketablesecurities 1,839 1,224

Long-termreceivable 7 8,822 13,322

RestrictedCash 7 13,115 9,958

Total $ 413,720 $ 234,162

LiquidityRisk

Liquidity risk is the risk that the Corporation will encounter difficulty in meeting obligations associated with itsfinancialliabilitiesthataresettledbydeliveringcash,physicalgoldoranotherfinancialasset.TheCorporationhasaplanningandbudgetingprocessinplacetohelpdeterminethefundsrequiredtosupporttheCorporation’snormaloperatingrequirements.


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ThefollowingtablesummarizestheCorporation’sliabilitiesthathavecontractualmaturitiesasatJune30,2020:

Within1year

2to3years

4to5years

Over5years

Total

Tradeandotherpayables 166,977 — — — 166,977

Corporateloanfacility — 430,000 — — 430,000

Convertibleseniorbond 9,900 349,800 — — 359,700

Leaseliabilities 5,850 3,968 1,354 966 12,138

Financearrangements 29,841 35,691 5,550 — 71,082

Total $ 212,568 $ 819,459 $ 6,904 $ 966 $1,039,897

iii. Marketrisks

CurrencyRisk

CurrencyriskrelatestotheriskthatthefairvaluesorfuturecashflowsoftheCorporation’sfinancial instrumentswillfluctuatebecauseofchangesinforeignexchangerates.ExchangeratefluctuationsmayaffectthecoststhattheCorporation incurs in its operations. There has been no change in the Corporation’s objectives and policies formanagingthisriskduringtheperiodendedJune30,2020.

TheCorporationhasnothedgeditsexposuretoforeigncurrencyexchangerisk.

Thetablebelowhighlightsthenetassetsheldinforeigncurrencies,presentedinUSdollars:

June30,2020

December31,2019

Canadiandollar 124 309

CFAFrancs 5,461 26,615

Euro 2,892 919

Othercurrencies 5,691 2,707

Total $ 14,168 $ 30,550

The effect on earnings before taxes as at June 30, 2020, of a 10% appreciation or depreciation in the foreigncurrencies against the US dollar on the abovementioned financial and non-financial assets and liabilities of theCorporation is estimated to be $1.4 million (December 31, 2019, $3.1 million), if all other variables remainedconstant.ThecalculationisbasedontheCorporation’sstatementoffinancialpositionasatJune30,2020.

InterestRateRisk

Interestrateriskistheriskthatfuturecashflowsfrom,orthefairvaluesof,theCorporation’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.TheCorporationisexposedtointerestrateriskprimarilyonitslong-termdebt.Sincemarketablesecuritiesandgovernmenttreasurysecuritiesheldasloansareshortterminnature and are usually held to maturity, there is minimal fair value sensitivity to changes in interest rates. TheCorporation continually monitors its exposure to interest rates and is comfortable with its exposure given therelativelylowshort-termUSinterestratesandLIBOR.

TheeffectonearningsandothercomprehensivelossbeforetaxasatJune30,2020,ofa10%changeintheLIBORrateontheRCFisestimatedtobe$0.1million(December31,2019-$0.1million).


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PriceRisk

PriceriskistheriskthatthefairvalueorfuturecashflowsoftheCorporation’sfinancialinstrumentswillfluctuatebecause of changes inmarket prices. There has been no change in the Corporation’s objectives and policies formanaging this riskandnosignificantchanges to theCorporation’sexposure toprice riskduring theperiodendedJune30,2020.


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20 COMMITMENTSANDCONTINGENCIES

• TheCorporationhascommitments inplaceatall fourof itsminesandotherkeyprojectsfordrillandblastingservices,loadandhaulservices,supplyofexplosivesandsupplyofhydrocarbonservices.

• The Corporation is, from time to time, involved in various claims, legal proceedings, tax assessments andcomplaints arising in the ordinary course of business from third parties. The Corporation cannot reasonablypredictthelikelihoodoroutcomeoftheseactions.TheCorporationdoesnotbelievethatadversedecisionsinanyotherpendingorthreatenedproceedingsrelatedtoanymatter,oranyamountwhichmayberequiredtobepaidbyreasonthereof,willhaveamaterialeffectonthefinancialconditionorfutureresultsofoperations.

• The Corporation was recently served in the Cayman Islands with notice of a claim by a former serviceprovider.TheCorporationistakinglegaladviceonthemeritsoftheclaimandtheprobableoutcomebutintendstovigorouslydefendagainst the claims.TheCorporationdoesnotbelieve that theoutcomeof the claimwillhaveamaterialimpacttoCorporation’sfinancialposition.

• TheCorporation’sminingandexplorationactivities are subject to various lawsand regulations governing theprotectionoftheenvironment.Theselawsandregulationsarecontinuallychangingandaregenerallybecomingmore restrictive.TheCorporationbelieves itsoperationsarematerially in compliancewithall applicable lawsand regulations. TheCorporationhasmade, andexpects tomake in the future, expenditures to complywithsuchlawsandregulations.

• The Corporation is obligated to deliver 100,000 ounces of gold (20,000 ounces per year) to Franco-NevadaCorporationandSandstormGoldInc.(the“Syndicate”)overafive-yearperiodinexchangefor20%ofthespotprice of gold for each ounce of gold delivered (the “ongoing payment”). The amount that was previouslyadvancedforthisagreementof$100.0millionisreducedoneachdeliverybytheexcessofthespotpriceofthegolddeliveredovertheongoingpayment.Followingthefive-yearperiod,whichcommencedonMarch31,2016,theCorporationiscommittedtodeliverrefinedgoldequalto6.5%ofthegoldproductionattheKarmaMineforthe lifeof themine inexchange forongoingpayments.TheCorporationdeliveredanadditional7,500ouncesbetween July2017andApril2019 inexchange foranadditionaldepositof$5.0million received in2017.TheCorporationassumedthegoldstreamwhenitacquiredtheKarmaMineonApril26,2016.Goldouncessoldtothe Syndicate under the stream agreement are recognized as revenue only on the actual proceeds received,whichpertheagreementis20%ofthespotgoldprice.AsatJune30,2020,thereare16,665ouncesstilltobedelivered.

21 SUBSEQUENTEVENTS

AcquisitionofSEMAFOinc.

On July 1, 2020, theCorporation successfully completed the acquisitionof SEMAFO inc.Under the termsof theagreement,SEMAFOshareholdersreceived0.1422ofanEndeavourshareforeachSEMAFOcommonshareheld.Intotal, 47,561,205 Endeavour common shares were issued to the SEMAFO shareholders. Based on Endeavour'sclosingsharepriceasatJune30,2020,totalestimatedconsiderationfortheacquisitionwas$1.2billion.Asaresultoftheacquisition,SEMAFOhasbecomeawholly-ownedsubsidiaryofEndeavour.

SEMAFO Inc. is a Canadian-based intermediate gold producer with over twenty years’ experience building andoperatingminesinWestAfrica.SEMAFOInc.operatestwomines,theManaandBoungouMinesinBurkinaFaso.TheadditionofSEMAFO's twooperatingminesandhighqualityexplorationprojectsadvances theCorporation'sgoalofbecomingaleadingWestAfricangoldproducer.

TheCorporationhasidentifiedthatthistransactionconstitutesabusinesscombinationintermsofIFRS3BusinessCombinationswithEndeavourastheacquirer.FromJuly1,2020,theoperatingresults,cashflowsandnetassetsofSEMAFOIncwillbeconsolidatedwiththatofEndeavour.


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Theassetsacquiredconsistprimarilyofinventories,property,plantandequipmentandmininginterestrelatedtotheBoungouandManamines,andcashandcashequivalents.Atthedateofissuanceofthefinancialstatements,the initialbusinesscombinationaccountingforthepreliminarydeterminationofthefairvalueofacquiredassetsand assumed liabilities and any goodwill which may arise on the transaction was not complete. As a result, apreliminarypurchasepriceallocationhasnotbeendisclosed.

SharesissuedtoLaManchaHoldingS.A.R.L

On July 3, 2020, the Corporation issued a total of 4,507,720 ordinary shares in the capital of Endeavour to LaManchaHoldingS.A.R.L("LaMancha")foraggregatenetproceedsof$100.0million.Followingtheinvestment,theCorporationnowhas163,062,165sharesoutstandingwithLaManchaholdinganinterestofapproximately24.1%.

PartialrepaymentoftheRCF

OnAugust3,2020,theCorporationmadeavoluntaryrepaymentof$60.0millionontheRCFreducingthebalanceoutstandingasatAugust5,2020,to$370.0million.


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integrated management discussion & analysis and financials€¦ · and financials for the three...

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