Endeavour Mining

CN: EDV

C$3822.6m market cap

C$34.44 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 one major development project in Mali (Kalana), all in the highly prospective West African Birimian greenstone belt.

Investment summary

Since new management was engaged in 2015 and its strategy re-set, Endeavour has built itself into the largest gold producer in the Ivory Coast and one of the top three in Burkina Faso. Q120 adjusted EPS of US$0.303 (cf US$0.336 in Q419) was materially ahead of expectations. Guidance for FY20 is 680–740koz at an AISC of US$845–895/oz (cf 650koz at US$818/oz in FY19).

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 752.0 264.8 70.5 (8.0) N/A 9.9
2019A 886.4 355.7 106.9 28.0 90.4 7.6
2020E 1163.4 571.3 324.3 159.0 15.9 5.3
2021E 1063.2 580.8 331.1 150.0 16.9 5.2
Industry outlook

Endeavour’s exploration programme is intended to extend and maintain near-term production rates by discovering 10–15Moz gold over five years at a cost of US$45m pa. In valuing EDV, we therefore discount three years of forecast cash flows to shareholders and then apply an ex-growth multiple to terminal cash flows consistent with a 10% discount rate to result in a valuation of US$33.46/share. In the meantime, EDV’s all paper (accretive) acquisition of SEMAFO will create a top 15 gold producer by adding c 315–355koz of near-term production at an AISC of US$895–960/oz plus two highly prospective exploration targets.

Last updated on 09/07/2020
Share price graph
Balance sheet
Forecast net debt (US$m) 367.2
Forecast gearing ratio (%) 35
Price performance
%
1m
3m
12m
Actual 8.3 46.4 57.3
Relative* 10.2 33.2 67.1
52-week high/low C$35.2/C$20.0
*% relative to local index
Key management
Michael E. Beckett Chairman
Louis Irvine CFO
Martino De Ciccio VP Strategy & Investor Relations
Sebastien de Montessus President and CEO