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2016-03-04

Endeavour Mining Corporation: Endeavour Mining to acquire True Gold to grow its low-cost gold production

Endeavour Mining to acquire True Gold to grow its low-cost gold production View News Release in PDF Format
http://hugin.info/171882/R/1991975/733026.pdf
George Town, March 4, 2016
- Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) is pleased to announce that it has
entered into a definitive arrangement agreement with True Gold Mining Inc.
("True Gold") (TSX-V:TGM) pursuant to which Endeavour Mining will acquire all
of the issued and outstanding common shares of True Gold via a court-approved
plan of arrangement (the "Arrangement Agreement"). In conjunction with the
acquisition, Endeavour Mining is pleased to announce that La Mancha Holding
S.àr.l., its largest shareholder with 30% ownership, intends to exercise an
anti-dilution right that will result in an approximate CDN$82.6 million
(US$61.5 million) new equity placement in Endeavour Mining.

Summary of the transaction

* Acquisition of True Gold in an all share transaction with each True Gold
common share exchanged for 0.044 of an Endeavour Mining common share
valuing True Gold at approximately CDN$0.57 per share or CDN$226 million,
using closing prices on the TSX and TSX-V as of March 3, 2016. Using
Endeavour Mining's 20-day volume weighted average price ("VWAP"), the
acquisition is valued at CDN$191 million.

* The offer represents a 43.4% premium for the True Gold shareholders using
closing prices as of March 3, 2016 and a 32.7% premium using 20-day VWAPs,
on the TSX and TSX-V, respectively.

* True Gold has a 90% interest in the Karma gold mine in Burkina Faso, which
is nearing production start-up with first gold pour anticipated in late
March / early April 2016. The acquisition will increase Endeavour Mining's
forecast gold production rate by approximately 110,000 - 120,000 ounces per
year at a low AISC of approximately US$700/oz in years 1 to 5, with a mine
life of 8.5 years based on current reserves.

* Endeavour Mining's attributable Proven and Probable gold reserves will
increase by 19% to 5.4 million ounces and Measured and Indicated gold
resources will increase by 39% to 10.2 million ounces, and Inferred gold
resources will increase by 123% to 3.9 million ounces (see Appendix 2).

* Under the transaction, Endeavour Mining is providing a US$15 million
convertible bridge loan to True Gold (the "Bridge Loan") to ensure True
Gold remains well funded as it completes construction of the Karma Mine.
Currently, True Gold has drawn US$105 million of its US$120 million gold
streaming facility with Franco-Nevada Corporation and Sandstorm Gold Ltd.
Endeavour Mining is providing the Bridge Loan as a financing alternative
that allows True Gold to maintain its current liquidity without additional
gold streaming.

* The anti-dilution right permits La Mancha to subscribe for new Endeavour
Mining shares to maintain its current 30% ownership. Upon completion of the
True Gold acquisition, La Mancha has committed to purchase approximately
7.5 million Endeavour Mining shares at a price of CDN$10.94 (in line with
20-day VWAP) for proceeds of approximately CDN$82.6 million. The
subscription for, and listing of, all new shares is subject to TSX and
other regulatory approvals.

Neil Woodyer, CEO of Endeavour Mining, stated: "The production profile and low
cost of True Gold's
Karma Mine is a very attractive fit with our West African operating portfolio.
Karma is nearing production, and Endeavour Mining has both the financial
strength and an experienced operations team to ensure Karma's value is
maximized during this important stage. While True Gold shareholders are
receiving an attractive premium and an opportunity to participate in a larger
diversified West African producer, Endeavour Mining shareholders are gaining
a new, low-cost mine that boosts group production while reducing group
AISC/oz in a value accretive transaction. In the long term, the Karma Mine
has extensive exploration potential to extend its mine life. Endeavour
Mining's
enhanced ability to finance an expanded exploration strategy at Karma, and at
our own mines, is expected to generate significant value.

With the expected closing of this acquisition in April 2016, we intend to see
Karma complete its production ramp-up and then commence construction of the
Houndé Project.

This transaction also demonstrates the strength of Endeavour Mining's
strategic relationship with La Mancha and Naguib Sawiris as our long term
partner with the shared vision of building a leading, Africa-focused gold
producer."

Terms of the Arrangement Agreement

Under the Arrangement Agreement, each True Gold shareholder will receive 0.044
of an Endeavour Mining common share ("Endeavour Mining Share") in exchange
for each True Gold common share. Also under the Arrangement Agreement, True
Gold stock options will become exercisable for Endeavour Mining Shares using
the same 0.044 exchange ratio subject to a maximum term of 180 days from
closing, or 1 year from closing if so provided under the relevant optionee's
employment agreement.

True Gold shareholders will represent 20.9% of Endeavour Mining capital after
the exercise of the La Mancha anti-dilution right.

Completion of the Arrangement will be subject to, among other things, approval
by 66 2/3% of the True Gold shareholder votes cast, approval by 50% of the
Endeavour Mining shareholder votes cast, and other customary conditions
including court approvals. The two shareholder meetings are expected to
occur in the third week of April 2016 and the transaction is expected to
close before the end of April 2016.

For the benefit of Endeavour Mining's shareholders, full details of the
proposed transaction will be included in a management information circular to
be filed with regulatory authorities in Canada and mailed to the Endeavour
Mining shareholders in accordance with applicable securities laws. The
record date for the special meeting of the Endeavour Mining shareholders will
be announced in the near future.

Highlights of the Acquisition

* The True Gold acquisition is consistent with Endeavour Mining's
previously-announced 'buy-and-build' strategy and firmly positions the
company as one of West Africa's premier gold miners.

* The Karma Mine provides a material upgrade to the recently divested Youga
Mine and emphasizes management's dedication to proactive portfolio
management and cash flow maximization.

* On a pro forma basis, Endeavour Mining will have five producing mines; the
Houndé Project, a long-life and low-cost development project that is
construction ready; and an attractive pipeline of development and
exploration properties (see Figure 1 for locations).

* Through an all-stock transaction, True Gold shareholders can continue to
participate in the future growth of Karma through Endeavour Mining shares
and, importantly, access its superior financial capacity and leverage its
proven operating team.

* Endeavour Mining's cash balance and available amount from its revolving
credit facility totaled US$220 million, as of December 31, 2015. Including
the US$20 million proceeds received from the sale of the Youga Mine on
February 29, 2016 and the La Mancha anti-dilution investment of US$61.5
million increases the available liquidity to approximately US$301.5
million.

* A pro forma market capitalization of CDN$1.08 billion using Endeavour
Mining's closing price on the TSX as of March 3, 2016.

* For 2016, Endeavour Mining has production guidance range of 535,000 to
560,000 ounces (updated to exclude the recently sold Youga Mine) at an
AISC/oz range of US$870 to US$920. Adding the Karma Mine potentially lowers
the AISC range by approximately US$25/oz (assuming Karma achieves US$700
AISC/oz in 2016).

* Endeavour Mining will integrate Karma into its existing operations
management structures and does not anticipate an increase in its corporate
G&A expense also True Gold G&A will be eliminated (~6 m C$/year).

* Across a range of valuation metrics and contribution analysis, this
acquisition is value accretive to the Endeavour Mining shareholders.

* Valuation upside as Endeavour Mining continues to grow its low-cost gold
production, and this transaction enhances a financing plan that accelerates
the construction of the Houndé Project and the ability to finance an
expanded exploration strategy.

Figure 1 - Mine&Project Location Map

Additional Transaction Details

The proceeds of the US$15 million Bridge Loan may be used by True Gold to fund
capital expenditures for the completion of the Karma Mine, and for other
working capital needs. The terms of the Bridge Loan include a repayment date
which is 12 months from the date of the loan; the loan may be repaid in cash
or, at Endeavour Mining's sole election, may be converted into common shares
of True Gold on certain events. The conversion price for the principal
amount of the Bridge Loan will be at a price per common share equal to the
5-day VWAP on the date prior to True Gold's drawdown of the Bridge Loan.
Interest on the Bridge Loan will accrue from draw-down at a rate of LIBOR
plus 4% and may be paid in cash or in True Gold shares based on True Gold's
future market price prevailing at the time.

The Arrangement Agreement includes customary deal protections. True Gold has
agreed not to solicit any alternative transactions; Endeavour Mining has been
granted the right to match any superior competing offer; True Gold has agreed
to pay Endeavour Mining a break fee of approximately C$4.5 million in certain
circumstances; Endeavour Mining has agreed to pay True Gold an expense fee of
C$4.5 million in certain circumstances.

Both the Endeavour Mining and True Gold Boards of Directors have unanimously
approved the terms of the Arrangement Agreement and recommend that their
respective shareholders vote in favour of the proposed acquisition.

All of True Gold's officers and directors and certain shareholders, holding,
in the aggregate 15.7% of the issued and outstanding True Gold shares, have
entered into support agreements with Endeavour Mining to vote in favour of
the Transaction.

All of Endeavour Mining's directors and officers and certain shareholders,
holding in the aggregate 31.5% of the issued and outstanding ordinary shares
of Endeavour Mining have entered into support agreements with True Gold to
vote in favour of the issuance of the ordinary shares pursuant to the
Transaction.

Pro Forma Capital Structure

Table 1: Pro Forma Capital Structure

------------------------------------------------------------------------------------------------------------------------------------------
| Issued and outstanding shares (millions) Pro Forma Issued shares (millions) Pro Forma Ownership |
| Endeavour Mining 59.04 59.04 70.19% |
| True Gold 398.84 17.55 20.86% |
| La Mancha, anti-dilution investment 7.53 8.95% 30.00%1 |
| Total issued shares 84.12 100.00% |
------------------------------------------------------------------------------------------------------------------------------------------

1
La Mancha currently owns 17,706,157 shares of Endeavour Mining such that it
will hold 30.00% ownership following

the anti-dilution investment

Advisors

Endeavour Mining is being advised by UBS Investment Bank and Stikeman Elliott
LLP.

True Gold is being advised by National Bank Financial, Haywood Securities Inc.
(Special Committee) and Blake, Cassels&Graydon LLP.

La Mancha is being advised by Norton Rose F...

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