gold water

Endeavour Mining

LSE: EDV

Market Cap£4,301m

Last Close 1731p

Following its acquisitions of SEMAFO and Teranga, Endeavour has become one of the top 10 major gold producers globally, with six mines in Côte d’Ivoire, Burkina Faso and Senegal plus a portfolio of development projects, all in the West African Birimian greenstone belt.

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Investment summary

Endeavour’s Q322 results released this morning put it solidly on track to meet the top end of its guidance for the year of 1,315–1,400koz of production at an all-in sustaining cost (AISC) of US$880–930/oz. Production in the quarter was 9.2% above our prior expectation, at 342.7koz (1,370.8koz annualised), while AISC was 8.5% below it, at US$960/oz (US$920/oz year to date), driven by continued strong performances at Endeavour’s Ity and Houndé flagships, in particular, and despite the typical impact of the rainy season. Cash costs (including royalties) amounted to US$839/oz (cf our estimate of US$836/oz).

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2020A 1847.9 910.3 501.2 181.51 11.1 3.1
2021A 2903.8 1517.3 756.5 203.21 9.9 3.6
2022E 2410.9 1241.7 572.7 123.71 16.2 3.8
2023E 2219.0 1223.2 763.8 184.44 10.9 4.3
Industry outlook

Endeavour has US$216.8m in net cash after fortuitous Q222 results. Recently, it added US$342m in value to Fetekro and Kalana via updated pre-feasibility studies (100% basis) and has announced a comprehensive shareholder returns programme. Exploration in FY16–FY21 yielded 11.4Moz in indicated gold resources and a second five-year plan aims to discover a further 15–20Moz by FY26. This success has increased combined production at Ity and Hounde to 0.5Moz pa until at least 2028. An expansion at Sabadola-Massawaa and the launch of Lafigue (NPV US$477m) are also now underway. Our most recent analysis of Endeavour valued it at US$35.54/share plus US$4.30–7.45/share for exploration.

Last updated on 30/11/2022
Content on Endeavour Mining
Endeavour Mining – On track to hit top end of production guidance
Metals & mining | research Flash note | 10 November 2022
gold flake
Endeavour Mining – Quarter end refinements and Lafigué go-ahead
Metals & mining | research Update | 18 October 2022
gold flake
Endeavour Mining – Yield hits 4%
Metals & mining | research Update | 8 August 2022
gold flake
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Sector
Metals & mining
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Share price graph
Balance sheet
Forecast net cash (US$m) 272.5
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 14.2 2.9 (2.5)
Relative* 6.9 (0.4) (5.2)
52-week high/low 2090.0p/1461.0p
*% relative to local index
Key management
Srinivasan Venkatakrishnan Chairman
Joanna Pearson CFO
Jack Garman IR manager
Martino De Ciccio VP Strategy & Investor Relations
Sebastien de Montessus President and CEO