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SUMMARY OF INTERIM REPORT for JANUARY-MARCH 2017

27.04.2017
Increased grade improved gold production and sales

HIGHLIGHTS Q1 2017 (Q1 2016)

  • Gold production 97.9 kg (58.5)
  • Milled ore 40,804 tonnes (35,317) at 2.9 g/t (2.1)
  • Cash Cost 1,206 USD/oz (1,312)
  • Revenues 28.7 MSEK (16.3)
  • EBITDA -1.3 MSEK (-6.3)
  • Profit after tax -12.2 MSEK (-14.8)
  • Earnings per share -1.16 SEK (-1.73)
  • Ms. Saila Miettinen-Lähde appointed as CEO of Endomines AB from 1st of May 2017

SUBSEQUENT EVENTS

  • No significant events to be reported

PRODUCTION GUIDANCE

  • During 2017 the Company expects to produce between 300 and 350 kg gold

Some key financial measures

Key financial data Jan-March
MSEK 2017 2016 +/-
Total revenues 28,7 16,3 12,4
Total cost -30,1 -22,6 -7,5
EBITDA -1,3 -6,3 5,0
EBIT -10,9 -14,8 3,8
Investments 9,7 4,1 5,6

Operations during the 1st quarter 2017
Total gold production for the 1st quarter amounted to 97.9 kg, which is significantly better compared to Q1/2016. Gold production was in line with the increased gold production achieved during the previous period.  The mill throughput exceeded slightly the expectations for the reporting period.

Key production figures Q1 Q1 Q2 Q3 Q4 Rolling
2017 2016 2016 2016 2016 12 mths
Milled ore (tonnes) 40 804 35 317 37 303 36 104 42 193 156 404
Head grade (Au gram/tonne) 2,9 2,1 2,4 2,7 3,1 2,8
Gold recovery (%) 83,6 80,2 82,8 85,3 83,0 83,7
Hourly utilization (%) 41,0 35,3 37,7 34,0 43,5 39,1
Gold production (kg) 97,9 58,5 73,7 83,0 109,8 364,3
Gold production (oz) 3 148 1 882 2 369 2 667 3 531 11 713
LTIFR 8 5 6 6 8 8
Cost per milled ore tonne (EUR) 76 58 71 66 74 72
Cost per milled ore tonne (SEK) 729 541 656 624 720 685
Cash Cost (USD/oz) 1 206 1 312 1 396 1 113 1 060 1 179
Average gold price (USD(oz) 1 219 1 179 1 258 1 335 1 220 1 258
Note! Decimals are indicated by a comma and thousands are separated by a space

Production figures for the last quarter are based on company own assaying and not confirmed by any external laboratory. Figures are individually rounded off.
LTIFR = The Lost Time Injury Frequency Rate is based on reported lost time injuries on a rolling 12-month bases resulting in one day/shift or more off work per 1 million hours worked. LTIFR has been calculated for the whole company including contractors

The main reason for the improved gold production was, in relative terms, the high grade ore available for mining, in combination with successful selective mining performance during the reported period. The rather high head grade had as well a positive impact on the gold recovery at the mill.

Underground development and exploration

During the reporting period the decline was developed down to the 755 level. The horizontal development exceeded the planned levels due to a substantially increased productivity in the mine development cycle. The produced volume of the ore was higher than planned and created a minor ore stockpile at surface, available as a back up volume for processing. These activities led to an increased operating cost but were deemed necessary in order to achieve a satisfactory production reliability for the remainder of the year, and especially for the upcoming vacation period.

The underground exploration and infill drilling meters were, for the same reasons, increased. The exploration of the potential production areas below the current production levels has commenced and the results are expected to be available during second half of 2017.

Regional exploration activities in the Karelian Gold Line

Regional exploration along the Karelian Gold line was concentrated to planning of activities. No physical exploration was done.

Health, environment and safety

The Company’s safety performance is on a good level. The overall strategy is a non-acceptance of accidents and adverse environmental incidents, a Zero Harm policy. Late 2016, the Pampalo mine implemented a LEAN methodology project to improve housekeeping and to boost the safety performance. The project is progressing well.

Personnel
The number of employees in the Group at end of March 31 was 43 persons as compared to 44 persons at the end of last year.

Subsequent events

No significant subsequent events to report.

Outlook for 2017, Selective Mining continues

During 2017 the Company expects to produce between 300 and 350 kg gold at Pampalo. Production in 2017 will, as for 2016, be based on the selective mining principle. During 2017, the Company intends to mine and process approximately 150,000 tonnes of ore. Mining will be concentrated to areas with, in relative terms, higher in situ grade. The mine will operate during weekdays whereas the mill will run according to, and in average, an every second week roster.

Future liquidity development
Exploration and mine development activities requires access to financing. It is the Board's assessment that current working capital is not sufficient for all scheduled activities in the coming 12-months period. The operations might as a consequence need to be adjusted by postponing some investments and other mine development costs in order to secure the working capital level. The Board is actively engaged with financing as a significant part of the Company´s growth strategy.

Financial Calendar

Summary press releases in English on 2017 quarterly reports to be issued:

  • Q2 2017 on August 18
  • Q3 2017 on November 9

Full quarterly report for Q1 2017 in Swedish
For the full quarterly report in Swedish see the company website, www.endomines.com.
 
Contact person
Markus Ekberg, CEO of Endomines AB, phone +358-40-706 48 50
E-mail: markus.ekberg(at)endomines.com

This information is information that Endomines AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact person(s) set out above, at 08:45 CET on APRIL 27, 2017.

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About Endomines
Endomines is a gold concentrate producer with mining, development and exploration operations in Eastern Finland along the 40 kilometer long Karelian Gold Line. Through various regulatory approvals, Endomines controls the exploration rights to this entire area. Endomines vision is to participate in the future structural transformation and consolidation of the Nordic mining industry. The Company may therefore be involved in acquisitions of interesting deposits or companies, should such opportunities arise.

The shares trade on Nasdaq Stockholm (ENDO) and Nasdaq Helsinki (ENDOM).