Endomines AB Press Release, Summary of interim report January - September 2010

Pampalo Gold Mine approaching test runs and production
 
Summary of events
 
Pampalo Gold Mine:
 
  * Pampalo Gold Mine project enters final construction phase, still in-line
    with the budget, with some minor overruns due to quality-improvements on the
    crushing circuit and mine-site laboratory
  * All crushing and processing equipment was delivered to the site according to
    schedule
  * Construction of the new power line is also progressing well and is expected
    to be commissioned ahead of schedule
  * Ore reserve estimate was updated with a 50% increase in the Pampalo Gold
    Mine ore reserve tonnage, and gold content increased by 11%
  * Janne Muttonen, BSc(Eng), was appointed Resident Manager of Pampalo
    operations as from November 1(st)
 
Company overview:
 
  * The market value of Endomines' gold price and interest rate hedge programs
    as at September 30(th) is -119,127 KSEK, mainly due to the strengthening of
    the gold price in dollar and the weaker Euro since the beginning of the year
 
Outlook 2010
 
  * Endomines remains confident that test production will commence during
    Q4/2010, and commercial production during Q1/2011
  * The subscription period for Endomines AB warrants will commence on November
    15(th), closing on December 15(th).  Endomines issued 6,111,957 warrants in
    connection with its rights issue in 2009, which entitle holders to subscribe
    to new shares at a subscription price of SEK 5.00 per share.  Further
    information on the Endomines warrants program can be found on the company
    web-site
 
Operations overview
 
Construction of the Pampalo Gold Mine continued according to schedule during the
third  quarter  of  2010. The  final  batch  of processing equipment, comprising
grinding  mill heads, was delivered  by Metso Minerals (Sala)  AB to the Pampalo
Gold  Mine site in August. The instalment  of the grinding mill was completed in
September.
 
Mechanical and electrical installation of the crusher plant continued during the
reporting  period,  with  commissioning  due  in October. Piping, electrical and
automation works for the processing plant are also on schedule.
 
An updated JORC-compliant ore reserve estimate was completed by Outotec Oyj. The
data  included results from  the infill drilling  campaign completed in April at
the  Pampalo underground mine. This drilling  campaign was conducted with a view
to  delineating the intended production area for the initial three to four years
of  production. The Pampalo  Gold Mine ore  reserve tonnage increased by 50% and
its gold content by 11 %.
 
Underground  development  works  continued  with  the  completion of ventilation
raises  and instalment of ladders for secondary means of egress. Drifting in the
ore  and waste rock continued. All ore derived from development drifting will be
stockpiled  for further processing and gold production once the processing plant
and power line have been commissioned.
 
The  erection of  the 48-kilometre  power line  from Ratilanvaara to the Pampalo
Gold  Mine site  is progressing  ahead of  schedule. The  line is expected to be
commissioned   well  before  year-end,  which  will  allow  for  efficient  test
production to commence during Q4/2010.
 
Safety and personnel
 
There  was one lost time  accident in the underground  mine during the reporting
period.  Endomines' Current  Lost Time  Injury Frequency  Rate (LTIFR[1]) at the
site  from the  beginning of  the year  is 0 for  Endomines own staff and 28 for
contractors,  with a combined average for all workforce on-site at 19. Endomines
continues to prioritize high safety standards, which are reviewed frequently.
 
Process  operator and laboratory worker  training programs were completed during
the reporting period. Endomines own workforce on-site increased during the third
quarter by 16 process operators and six laboratory workers.
 
Janne  Muttonen, BSc (Eng), was appointed Resident Manager of Pampalo operations
as from November 1(st). He has been previously employed by Ahma Insinöörit Oy as
a project manager on the Pampalo construction project.
 
The  total work force on-site  during the 3(rd) quarter has  been on average 35
Endomines  and 50 contractor employees, approaching  production level manning. A
few  additional underground  miners will  be trained  and recruited  during next
quarter.
 
Outlook 2010
 
Endomines  remains confident that test production  at the Pampalo Gold Mine will
commence during Q4/2010 and commercial production during Q1/2011.
 
Underground  development works  will continue  according to  the project plan. A
stockpile  of approximately  3-4 months of  ore supply  will be available on the
surface  before start-up of  commercial production. This  will secure sufficient
ore  supply for production  start-up, and will  contribute to the achievement of
first year production target levels.
 
Endomines  warrants issued in  connection with its  rights issue in 2009, may be
exercised  during the period15 November - 15 December 2010. The number of issued
warrants  was 6,111,957. One (1) warrant entitles  the holder to subscription of
one (1) new share for a subscription price of SEK 5.00. If all warrants are used
for subscription of new shares, the share issue will raise approximately SEK 30
million  to Endomines. The potential proceeds from this exercise of warrants are
intended  to be used primarily for financing further exploration and development
of the Pampalo deposit and other deposits along the Karelian Gold Line.
 
Hedge program effects
 
The  market value  of the  50% hedge program  will continue  to fluctuate due to
USD/Euro  exchange rates  and gold  price developments.  The effect of the hedge
programs will be realized at term date. The company real profit will be based on
a combination of operating cost, gold production, hedge price and spot price.
 
Summary of key financial figures for January-September 2010 (2009)
 
    ·         Earnings after tax -71,169 KSEK (-12,321)
    ·         Earnings per share -0.97 SEK (-0.36)
    ·         Investments 128,416 KSEK (12,703)
    ·         Total Cash Flow -72,528 KSEK (-20,965)
 
Full interim report (in Swedish) is available at www.endomines.com.
 
For further information:
 
Markus Ekberg, CEO of Endomines AB, cell phone: +358 40 706 48 50
 
About Endomines
 
During 2009-2010 Endomines has taken several important steps from exploration to
full-scale  gold  production.  By  the  end  of  2010, the company will commence
production  at the Pampalo Gold Mine, with a projected output of 900-1.000 kg of
gold  per annum. Other deposits  along the Karelian Gold  Line will be exploited
subsequently.  Endomines  has  additional  claims  in  Finnish  Lappland (gold),
Ostrobothnia (ilmenite) and Southern Finland (limestone/wollastonite).
 
Endomines  applies SveMin's &  FinnMin's respective rules  for reporting (public
mining  &  exploration  companies).  Endomines  has  chosen  to  report  mineral
resources  and  ore  reserves  according  to  JORC  or NI 43-101-code, which are
internationally  accepted. Endomines  applies International  Financial Reporting
Standards (IFRS) as approved by the European Union.
 
The  shares of  Endomines AB  are quoted  on the  First North Premier segment in
Stockholm  under ticker  ENDO.ST. Erik  Penser Bankaktiebolag  acts as Certified
Adviser and Liquidity Provider.
 
Read more about Endomines on www.endomines.com
 
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[1] LTIFR =  The Lost Time Injury Frequency Rate (LTIFR) is calculated as
reported lost time injuries resulting in one day/shift or more off work per
1,000,000 hours worked.
 
[HUG#1457548]
 
Summary of Interim Report Q3 2010: 
http://hugin.info/138043/R/1457548/397176.pdf
 
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Source: Endomines AB via Thomson Reuters ONE