Mr. Srinivasan Venkatakrishnan reports

ENDEAVOUR ANNOUNCES COMPLETION OF INVESTIGATION AND KEY FINDINGS

The board of directors of Endeavour Mining PLC has confirmed that the investigation commissioned following the termination of Sebastien de Montessus as president and chief executive officer of the company is now complete.

Summary of key outcomes:

• No restatement of historical financial statements and no material impact on 2023 annual financial results issued today, which are the subject of an unmodified audit opinion.
• The investigation found that Mr. de Montessus, acting with certain others who are not employees of the group:
  • Diverted a $5.9-million (U.S.) payment to a third party company, and concealed his actions with repeated false representations to management, the board and auditor;
  • Caused Endeavour to make two payments totalling $15.0-million (U.S.) to the same third party company, deliberately disguising them as advance payments to a contractor through repeated false representations to management.
• There was no evidence of bribery, or of any payments being made to sanctioned persons or to terrorist groups.
• Ultimate beneficiaries of these payments have not been discovered, despite extensive investigation.
• Mr. de Montessus provided implausible and untrue explanations of his conduct during the course of the investigation.
• The investigation is now complete.

Summary of actions taken and proposed:

• Mr. de Montessus was terminated as CEO and president on Jan. 4.
• Clawback of remuneration totalling $29.1-million (U.S.) announced on Jan. 18.
• Noting that these payments involved deliberate circumvention of the company's existing controls framework, the board has nonetheless accelerated its review of internal controls in line with the new United Kingdom Corporate Governance Code, and has made immediate adjustments to certain controls relating to M&A (mergers and acquisitions) activity.

Srinivasan Venkatakrishnan, chairman of Endeavour, commented: "The board's actions illustrate the high importance we place on integrity, governance and transparency. We will not waver from these values. The conclusion of the investigation enables us to put this matter behind us and focus on delivery and creating value for all our stakeholders. Under the highly experienced leadership of Ian Cockerill, we are confident we will deliver on our two high-quality development projects and move towards a period of free cash generation."

Background and scope of investigation

As announced on Jan. 4, 2024, the board had recently become aware of an irregular payment instruction issued in March, 2021, for an amount of $5.9-million (U.S.) owed to Endeavour in connection with the sale of the Agbaou mine. Mr. de Montessus instructed Allied Gold, the purchaser of the Agbaou mine, to pay this amount to a third party company rather than to a member of the group, thereby settling the debt from the purchaser's perspective. The payment was concealed from the company by Mr. de Montessus and he made repeated and deliberate false representations to management, the board and the company's auditor that this amount remained owing from the purchaser. As a result, a receivable representing this amount was maintained on the group's balance sheet until the third quarter of 2023, when it was written off based on further deliberate false representations by Mr. de Montessus.

When challenged about these facts in an interview on Jan. 4 2024, Mr. de Montessus admitted to issuing the irregular payment instruction, to concealing the fact of the payment to the third party company, and to knowingly misrepresenting the receivable as outstanding over a period of more than two years. As a result of his serious misconduct, the board terminated Mr. de Montessus as CEO on Jan. 4, 2024, and the remuneration committee of the board determined to claw back remuneration totalling $29.1-million, as announced on Jan. 18, 2024.

The board instructed its external advisers, Linklaters LLP and Ernst & Young LLP, to investigate the $5.9-million (U.S.) payment to determine the beneficiaries of the diverted funds. The investigation also uncovered evidence of two further payments, with a total value of $15.0-million (U.S.), to the same third party recipient as the $5.9-million (U.S.) payment. The scope of the investigation also included the circumstances of these payments.

In order to provide additional comfort in relation to the opening balance sheet position for the 2023 calendar year, the investigation also examined receivables written off by the group on Dec. 31, 2022, to ascertain whether any of them had in fact been settled by way of payment to a third party, in a similar manner to the $5.9-million (U.S.) payment.

The external advisers conducting the investigation were authorised by the board to access all relevant documents, records and information of the company, and to conduct interviews with any individual deemed appropriate.

Prior to the conclusion of the investigation work, Mr. de Montessus was interviewed for a second time in late February.

Overview of investigation findings

The investigation identified evidence that Mr. de Montessus, acting with certain others who are not (and were not at any time) employees of the group:

• Diverted a consideration payment with a value of $5.9-million (U.S.), relating to the disposal of the Agbaou mine, to a third party company in March, 2021, and concealed this payment by subsequently making false representations to management, the board and the group's auditor over a period of more than two years that the receivable was still outstanding;
• Had previously, in August and November, 2020, caused Endeavour to make two payments totalling $15.0-million (U.S.) to the same third party company as the $5.9-million (U.S.) payment, by deliberately disguising the $15.0-million (U.S.) as advance payments to a contractor through repeated false representations to management, causing an aggregate loss of that amount to Endeavour and/or the contractor.

Despite extensive efforts, the investigation was not able to establish the ultimate beneficiaries of the payments to this third party entity. This entity was incorporated as an offshore entity in Ras al Khaimah, United Arab Emirates, and was liquidated on the day after the payment of the $5.9-million (U.S.) in March, 2021. Through searches by professional investigation agents, thorough enquiries were made in the United Arab Emirates, but the investigation work was unable to ascertain the true beneficial ownership of this entity, which was concealed from the company by Mr. de Montessus and those with whom he acted.

Although Mr. de Montessus attended two interviews during the investigation, he continued to attempt to conceal his motives and actions relating to the events being investigated by providing untrue and misleading explanations for his conduct.

Since Jan. 4 2024, Mr. de Montessus has publicly stated that the $5.9-million (U.S.) payment which he deliberately diverted in March, 2021, was used to pay for security equipment to protect the group's partners and employees in a conflict zone. However, based on the information given by Mr. de Montessus in interviews and the other evidence available to the investigation (including the evidence that Mr. de Montessus had caused $15.0-million (U.S.) to be paid by Endeavour to the same third party company in different circumstances in 2020), his explanation was found to be implausible and untrue.

Although the investigation did not ascertain the ultimate beneficiaries of the payments to the third party entity, in the course of the extensive review of documentation and interviews, no evidence was identified of bribery, or of any payments to sanctioned persons or to terrorist groups.

The investigation did not identify evidence that any of the receivables written off on Dec. 31, 2022, had in fact already been settled by payments to third parties.

The findings of the investigation do not trigger any requirement to restate prior interim quarterly financial statements, annual financial statements, and associated management's discussion and analyses, nor do they materially affect the 2023 annual financial results.

For further information, please refer to the 2023 annual report.

Proposed actions

The investigation revealed strong evidence that Mr. de Montessus abused his position as CEO, actively misleading both the board and the senior executive team through repeated and deliberate false representations and concealment of information over a sustained period. His termination as CEO was therefore the most-important step in protecting the group from further conduct of this nature.

Whilst the circumstances clearly indicated deliberate overriding of controls, active concealment and misrepresentation by the former CEO, the company is evaluating its overall control environment, including the impact of "tone at the top." In the interim, the company has added further mechanisms, such as additional dual controls in committing the company within the context of M&A and subsequent renegotiations, so that the risk of such events is further minimized in the future. The audit committee of the board has determined that there are no material weaknesses in the group's internal controls over financial reporting or disclosure controls and procedures.

The board has reserved its position regarding the possibility of pursuing Mr. de Montessus for recovery of amounts lost by the group as a result of his actions.

About Endeavour Mining PLC

Endeavour Mining is one of the world's senior gold producers and the largest in West Africa, with operating assets across Senegal, Ivory Coast and Burkina Faso, and a strong portfolio of advanced development projects and exploration assets in the highly prospective Birimian greenstone belt across West Africa.

A member of the World Gold Council, Endeavour is committed to the principles of responsible mining and delivering sustainable value to its employees, stakeholders and the communities where it operates.

We seek Safe Harbor.