Endeavour Mining

CN: EDV

CA$2373m market cap

CA$21.74 last close

Endeavour Mining is an intermediate gold producer, with five mines in Côte d’Ivoire (Agbaou and Ity), Burkina Faso (Houndé, Karma) and Mali (Tabakoto) 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 reset, 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 which end has instigated a major exploration programme, expending c US$45m pa with the target 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)
2016A 566.5 213.9 103.4 (37.8) N/A 8.0
2017A 652.1 201.2 51.6 (6.5) N/A 6.6
2018E 720.5 261.0 74.8 (43.9) N/A 9.5
2019E 762.1 372.1 153.3 63.5 25.7 5.0
Last updated on 21/02/2019
Industry outlook

EDV’s exploration programme holds out the possibility of supporting near-term production rates at elevated levels, as well as extending the lives of its mines by 5–17yrs. In valuing Endeavour, we have opted to discount potential cash flows back over four years and then to apply an ex-growth multiple to terminal cash-flows consistent with a discount rate of 10%, which results in a value for EDV of US$30.74/share. In the meantime, Q418 production and cost results were universally ahead of our expectations putting both FY18 and FY19 forecasts under review.

Last updated on 21/02/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 476.7
Forecast gearing ratio (%) 47
Price performance
%
1m
3m
12m
Actual 9.9 16.8 (5.6)
Relative* 5.4 10.2 (8.4)
52-week high/low C$24.8/C$16.4
*% 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