Endeavour Mining Investor Presentation Deck
EXPLORATON METHODOLOGY AND STRATEGY
Selection, ranking and risk evaluation of exploration targets
ENDEAVOUR
MINING
Endeavour's large land position (more than 17,000 sq Km) and comprehensive database over a very large number of exploration targets promotes
the application of a general portfolio management theory where all numerous and independent exploration targets are statistically analysed and
risked, according to their probability of success or occurrence. As applied to the Group's previous five-year exploration programme, Endeavour's
exploration success has been based on the implementation of a systematic, statistically driven approach to selecting and optimising exploration
targets. This approach was derived from a similar process used in the oil and gas industry to predict, analyse, rank and then prioritise a large number
of exploration targets, as summarised below. It is important to note that this approach can only be performed with a significant number of
independent exploration targets, where the larger the number, the better the global portfolio value estimate.
Step 1: Exhaustive technical screening of the exploration portfolio based on geological data
The initial screening incorporated the exhaustive identification, selection, and ranking of all possible exploration targets occurring within
Endeavour's exploration portfolio. The technical analysis cross-referenced all available geological data, including geological maps, cross sections,
structural data, surface geology, geochemistry, geophysics, regolith mapping, alteration profiles, drilling data, cores, analysis of artisanal mining
activity, outcrops, and other survey data. Following this first screening, a total of 150 targets were identified and described.
Step 2: 150 targets were further screened based on mining characteristics and the potential to have production costs below $900/oz
The 150 targets were further screened by incorporating some tentative mining and processing costs parameters, to establish a selection of top
targets which were appraised to have the potential to be produced at an All-in Sustaining Cost ("AISC") of less than $900/oz. The criteria used in this
second screening phase included factors such as potential grade, metallurgy, strip ratio, production costs, mineralisation type, and distance to a mill.
After this second screening phase, the selection was narrowed to 110 high priority targets.
Step 3: Probabilistic ounce and average grade distribution of selected 110 targets
This applied approach is similar to that used in the analysis of natural phenomenon and other industries where large volumes of calibration data are
used to predict individual and then global outcomes. It can also be applied to an exploration portfolio containing a high number of identified targets
where a significant amount of calibration data may allow an accurate prediction of the total ounces to be discovered over the full portfolio despite
individual outcomes potentially varying widely.
Based on available information, Endeavour characterized all the physical parameters such as length, width, thickness, density, grade characterizing
each of the 110 selected targets to establish a prediction of the minimum, maximum and mean values distribution for each parameter related to
each individual target. Since each of the selected targets cannot possibly be all positive, a probabilistic weighting, defined as a Probability of
Occurrence ("POO") factor, was then applied to the mean values of each target. Since all 110 selected targets were defined as independent, the total
value (total ounces predicted) of the portfolio could be approached by adding all the risked mean Indicated resources expected from each of the 110
targets.
PoOs represent the confidence or supporting control Endeavour has in describing, precisely the deposit it is trying to discover. The PoO values were
set for each of the selected targets on a scale ranging from 0.2 to 0.8, with the very few, very low probability targets generally being eliminated due
to a "killing" factor, such as possible refractory characteristics, lower expected average grade or continuity, or other highly unfavorable parameters.
The full analysis of the selected 110 targets resulted in the conclusion that up to 25Moz could ultimately be discovered over the full exploration
portfolio, irrespective of the timeframe selected.
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