Endeavour Mining

CN: EDV

C$2936.2m market cap

C$26.71 last close

Endeavour Mining is an intermediate gold producer, with four mines in Côte d’Ivoire (Agbaou and Ity) and Burkina Faso (Houndé and Karma) and two major development projects (Ity CIL and Kalana) in the highly prospective west African Birimian greenstone belt.

Investment summary

Since new management was engaged in late-2015 and its strategy re-set, Endeavour has built itself into the largest gold producer in the Côte d’Ivoire and one of the top three in Burkina Faso, offering immediate cash flow from production and near-term growth from projects. To this end, it has instigated a major exploration programme, expending c US$45m pa with the aim of expanding its resources by c 10–15Moz over five years.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 652.1 201.2 49.3 (6.45) N/A 8.2
2018A 752.0 264.8 70.5 (7.51) N/A 8.0
2019E 893.9 372.3 129.8 27.42 74.4 6.5
2020E 1085.8 598.1 352.0 180.99 11.3 4.1
Industry outlook

Q3 results were materially ahead of our expectations. In the meantime, Endeavour’s exploration programme is intended to extend and maintain near-term production rates into the foreseeable future. In valuing the company, we have opted to discount forecast cash flows to shareholders back over four years and then to apply an ex-growth multiple to terminal cash flows consistent with a 10% discount rate. This results in an updated value for Endeavour of US$32.30/share (cf US$27.58/share previously) – much of the increase being attributable to the Ity plant expansion.

Last updated on 24/01/2020
Share price graph
Balance sheet
Forecast net debt (US$m) 527.9
Forecast gearing ratio (%) 55
Price performance
%
1m
3m
12m
Actual 8.8 14.4 26.8
Relative* 6.5 6.6 10.3
52-week high/low C$28.8/C$18.5
*% relative to local index
Key management
Michael E. Beckett Chairman
Martino De Ciccio VP Strategy & Investor Relations
Sebastien de Montessus President and CEO
Vincent Benoit Executive VP and CFO