Endeavour Mining — Looking to FY24 and beyond

Endeavour Mining (LSE: EDV)

Last close As at 08/11/2024

1,415.00

3.00 (0.21%)

Market capitalisation

3,465m

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Research: Metals & Mining

Endeavour Mining — Looking to FY24 and beyond

Endeavour released its customary operational and financial update to the market on 22 January, showing Q423 production of 280koz and FY23 production of 1,072koz (cf prior guidance of 1,060–1,135koz) – the 11th consecutive year in which it has achieved or exceeded guidance. Notwithstanding an increase in Burkinabe royalty rates in November, all-in sustaining costs (AISC) were very close to our previous expectations at an industry low of US$964/oz (cf a prior guidance range of US$895–950/oz). Simultaneously, Endeavour announced a net debt position as at end-December of US$555m (excluding leases) and a final dividend of US$100m, to take the total FY23 distribution to US$200m, which was 14% above the minimum committed level. This note updates our forecasts for both Q4/FY23 and FY24 in the light of Endeavour’s announcement.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Endeavour-Mining_resized

Metals & Mining

Endeavour Mining

Looking to FY24 and beyond

Q423 production and cost results

Metals and mining

1 February 2024

Price

1,434p

Market cap

£3,517m

C$1.3448/US$, US$1.2708/£

Net debt* (US$m) at end-September 2023 *Excludes lease liabilities, option premium and restricted cash

472

Shares in issue

245.3m

Free float

81.32%

Code

EDV

Primary exchange

LSE

Secondary exchanges

TSX, US OTC

Share price performance

%

1m

3m

12m

Abs

(19.6)

(16.9)

(26.0)

Rel (local)

(18.5)

(21.3)

(24.6)

52-week high/low

2,184p

1,337p

Business description

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

Next events

Ex-dividend date

22 February 2024

Q423/FY23 results

March 2024

Sabodala-Massawa expansion first production

Q224

Lafigué first production

Q224

Analyst

Lord Ashbourne

+44 (0)20 3077 5700

Endeavour Mining is a research client of Edison Investment Research Limited

Endeavour released its customary operational and financial update to the market on 22 January, showing Q423 production of 280koz and FY23 production of 1,072koz (cf prior guidance of 1,060–1,135koz) – the 11th consecutive year in which it has achieved or exceeded guidance. Notwithstanding an increase in Burkinabe royalty rates in November, all-in sustaining costs (AISC) were very close to our previous expectations at an industry low of US$964/oz (cf a prior guidance range of US$895–950/oz). Simultaneously, Endeavour announced a net debt position as at end-December of US$555m (excluding leases) and a final dividend of US$100m, to take the total FY23 distribution to US$200m, which was 14% above the minimum committed level. This note updates our forecasts for both Q4/FY23 and FY24 in the light of Endeavour’s announcement.

Year end

Revenue (US$m)

EBITDA (US$m)

PBT*
(US$m)

Operating cash flow per share** (US$)

DPS
(c)

Yield
(%)

12/21

2,903.8

1,517.3

756.5

4.83

56.0

3.1

12/22

2,508.1

1,261.3

527.2

4.12

81.0

4.4

12/23e

2,093.6

1,053.8

501.6

2.44

81.5

4.5

12/24e

2,176.7

1,160.4

691.8

4.14

106.7

5.8

Note: *PBT is normalised, excluding amortisation of acquired intangibles and exceptional items. **Operating cash flow per share is calculated after changes in working capital.

FY24 guidance

In addition to announcing its FY23 operating results, Endeavour provided guidance for FY24 of production of 1,130–1,270koz (an increase of 5–18% cf FY23) at an AISC of US$955–1,035/oz. At the same time, capex is anticipated to reduce by almost a third (or US$234.8m) as its two organic growth projects (the Sabodala-Massawa BIOX expansion and Lafigué) enter production and bed down.

Valuation: Cheap cf its peers on almost every level

Using an absolute valuation methodology, whereby we discount back four years of cash flows and then apply a perpetual ex-growth multiple to steady-state terminal cash flows in FY26, our valuation of Endeavour is US$32.12 (cf US$34.90 previously) per share, using a 10% discount rate. To this valuation a further US$4.30–7.45/share may be added to reflect the value of Endeavour’s five-year exploration programme (see The second five-year plan, published on 20 October 2021). In the meantime, Endeavour’s shares are now trading at their lowest level since being admitted to the London Stock Exchange in June 2021 and at a level they were trading at as long ago as January 2017 after the departure of the company’s CEO, Sébastien de Montessus, in January. As a result, Endeavour is trading at a discount to its peers on 95% of common valuation measures if consensus forecasts are used (cf 84% previously) and 91% if Edison forecasts are used (cf 77% previously). Reverse engineered, the average valuation measures of its peers suggest a share price for Endeavour of US$23.80 (C$32.86 or £18.73), to which its shares are currently trading at a 25.3% discount.

Q423 production and costs and FY24 guidance

On 22 January, Endeavour released its customary operational and financial update to the market. Highlights of the update were as follows:

Q423 production of 280koz (cf 281koz in Q323) at an AISC of c US$936/oz – down US$31/oz or 3.2% despite a $24/oz increase in royalty costs. This resulted in production for the year of 1,072koz (cf prior guidance of 1,060–1,135koz) and an industry-low AISC of US$964/oz (cf a prior guidance range of US$895–950/oz), albeit including royalty costs that were US$18/oz higher than expected at the time the guidance was originally issued, after alterations to the Burkinabe royalty regime in November.

FY23 production of 1,072koz marked the 11th consecutive year of achieving or beating production guidance, with production set to increase by a further 5–18% in FY24 to 1,130–1,270koz including the start-ups of the Sabodala-Massawa BIOX expansion project and the Lafigué project in Q224. AISC is expected to remain low at US$955–1,035/oz.

A strong financial position of US$757m of available liquidity (comprising US$517m in cash and US$240m in undrawn credit facilities) and net debt of US$555m, excluding leases.

An H223 dividend of US$100m to take the total for FY23 to US$200m, which is 14% above the US$175m minimum committed dividend.

An average realised gold price from continuing operations (excluding the impact of realised gains on gold hedges and inclusive of the Sabodala-Massawa gold stream) of US$2,034/oz for Q423 (note that this compares with an average gold price during the period of US$1,977/oz, source: Bloomberg). Including the impact of the gold hedges, the group's realised gold price from continuing operations was US$1,945/oz.

Total mine capital expenditure for FY24, consisting of both sustaining and non-sustaining capex, is expected to be c 9% (or US$32.7m) lower than in FY23 at US$315m (cf US$347.7m). Growth capital expenditure for FY24 is expected to be c 45% (or US$202.1m) lower than in FY23 at US$245m (cf US$447.1m).

Operationally, while Houndé and Ity achieved record annual production levels, output was constrained at Mana (as it continues its transition from open-put to underground at Wona) and Sabodala-Massawa (where grades increased by less than expected in Q4 owing to lower grades in the final phases of the Sabodala pit).

In the light of Endeavour’s announcement, we have adjusted our Q423 and FY23 earnings forecasts to those shown in Exhibit 1, below. In the light of its forward-looking guidance, we have also included our updated and improved financial estimates for FY24 (previous FY24 adjusted net EPS from continuing operations estimate US$1.548/share). In this case, the majority of the improvement in our FY24 forecasts may be attributed to higher than previously anticipated production at Ity (270koz cf 250koz) as well as 100koz of production from Lafigué counteracted, to some extent, by our forecast of 250.8koz in output from Houndé (cf official guidance of 260–290koz) to reflect two to eight weeks of strike action there currently. Note that we have, for the moment, maintained our gold price forecast at US$1,822/oz for FY24 in 2023 money terms, which translates to US$1,892/oz in nominal terms (see our report, Shades of the 1970s, Gold: September 1979 revisited, published on 27 September 2023). Should the gold price instead remain at current levels of US$2,025/oz, our forecast for adjusted net EPS from continuing operations would increase by a further 9.7% to US$1.983/share.

Exhibit 1: Endeavour Mining FY23 forecasts, by quarter

US$000s (unless otherwise indicated)

Implied Q123

Q223

Q323

Q423e
(prior)

Q423e (current)

Variance
(%)

FY23e (current)

FY23e
(prior)

FY24e

Houndé production (koz)

46.6

72.1

109.4

80.3

83.8

4.4

311.9

308.4

250.8

Karma production (koz)

0.0

0.0

0.0

0.0

0.0

N/A

0.0

0.0

0.0

Ity production (koz)

91.1

85.9

72.6

77.4

74.1

-4.3

323.8

327.1

270.0

Boungou production (koz)

0.0

0.0

0.0

0.0

0.0

N/A

0.0

0.0

0.0

Mana production (koz)

44.1

31.1

30.4

60.2

36.7

-39.0

142.3

165.8

158.8

Sabodala-Massawa

61.5

78.6

68.5

108.3

85.2

-21.3

293.8

317.0

403.2

Wahgnion

0.0

0.0

0.0

0.0

0.0

N/A

0.0

0.0

0.0

Lafigué

-

-

-

-

-

N/A

-

-

100.0

Total gold produced (koz)

243.5

268.0

280.8

326.3

279.8

-14.3

1,071.7

1,118.3

1,182.9

Total gold sold (koz)

252.1

269.0

278.0

326.3

284.8

-12.7

1,083.6

1,125.1

1,182.9

Gold price (US$/oz)*

1,892

1,941

1,898

1,947

1,960

0.7

1,924

1,922

1,892

Mine level cash costs (US$/oz)**

681

757

735

674

687

1.9

715

710

696

Mine level AISC (US$/oz)

899

951

927

883

883

0.0

917

915

911

Revenue

– Gold revenue

481,200

524,100

530,000

635,214

558,314

-12.1

2,093,614

2,170,514

2,176,719

Cost of sales

– Operating expenses

171,400

201,800

205,300

219,835

195,675

-11.0

774,175

798,335

822,995

– Royalties

29,700

31,800

31,900

37,912

33,295

-12.2

126,695

131,312

129,043

Gross profit

280,100

290,500

292,800

377,467

329,344

-12.7

1,192,744

1,240,867

1,224,681

Depreciation

(101,900)

(99,500)

(114,400)

(151,585)

(125,959)

-16.9

(441,759)

(467,385)

(408,984)

Expenses

– Corporate costs

(13,500)

(14,000)

(10,400)

(10,400)

(15,048)

44.7

(52,948)

(48,300)

(48,000)

– Impairments/loss on disposals

0

(14,800)

0

0

N/A

(14,800)

(14,800)

0

– Acquisition etc costs

N/A

0

0

– Share based compensation

(8,400)

(8,200)

(5,300)

(7,315)

(8,677)

18.6

(30,577)

(29,215)

0

– Exploration costs

(12,500)

(14,500)

(14,900)

(13,500)

(13,500)

0.0

(55,400)

(55,400)

(16,250)

Total expenses

(34,400)

(51,500)

(30,600)

(31,215)

(37,225)

19.3

(153,725)

(147,715)

(64,250)

Earnings from operations

143,800

139,500

147,800

194,667

166,160

-14.6

597,260

625,767

751,447

Interest income

Interest expense

(14,900)

(17,800)

(19,100)

(48,950)

(48,950)

0.0

(100,750)

(100,750)

Net interest

(14,900)

(17,800)

(19,100)

(48,950)

(48,950)

0.0

(100,750)

(100,750)

(59,680)

Loss on financial instruments

(72,000)

31,100

7,200

(3,960)

(4,341)

9.6

(38,041)

(37,660)

0

Other expenses

(5,100)

2,600

(7,200)

N/A

(9,700)

(9,700)

0

Profit before tax

51,800

155,400

128,700

141,757

112,869

-20.4

448,769

477,657

691,767

Current income tax

48,200

91,400

53,500

50,510

45,119

-10.7

238,219

243,610

155,619

Deferred income tax

(11,800)

(37,200)

1,600

0

0

N/A

(47,400)

(47,400)

0

Total tax

36,400

54,200

55,100

50,510

45,119

-10.7

190,819

196,210

155,619

Effective tax rate (%)

70.3

34.9

42.8

35.6

40.0

12.4

42.5

41.1

22.5

Profit after tax

15,400

101,200

73,600

91,247

67,750

-25.8

257,950

281,447

536,148

Net profit from discontinued ops.

5,100

(188,600)

(400)

0

0

N/A

(183,900)

(183,900)

0

Total net and comprehensive income

20,500

(87,400)

73,200

91,247

67,750

-25.8

74,050

97,547

536,148

Minority interest

17,300

21,900

13,900

20,087

18,483

-8.0

71,583

73,187

93,439

Minority interest (%)

84.4

(25.1)

19.0

22.0

27.3

24.1

96.7

75.0

17.4

Profit attributable to shareholders

3,200

(109,300)

59,300

71,161

49,267

-30.8

2,467

24,361

442,709

2,176,719

Basic EPS from continuing ops (US$)

(0.008)

0.321

0.242

0.289

0.200

-30.8

0.755

0.842

1.807

Diluted EPS from continuing ops (US$)

(0.008)

0.321

0.242

0.289

0.200

-30.8

0.755

0.842

1.781

Basic EPS (US$)

0.013

(0.442)

0.240

0.289

0.200

-30.8

0.010

0.098

1.807

Diluted EPS (US$)

0.013

(0.442)

0.240

0.289

0.200

-30.8

0.010

0.098

1.781

Norm. basic EPS from cont. ops (US$)

0.284

0.255

0.213

0.305

0.218

-28.5

0.969

1.055

1.807

Norm. diluted EPS from cont. ops (US$)

0.284

0.255

0.213

0.305

0.218

-28.5

0.969

1.055

1.781

Adj net earnings attributable (US$000s)

65,000

53,700

69,500

74,249

52,424

-29.4

240,624

262,257

442,709

Adj net EPS from continuing ops (US$)

0.263

0.217

0.281

0.301

0.213

-29.2

0.975

1.062

1.807

Source: Endeavour Mining, Edison Investment Research. Note: *Average realised price (including Sabodala-Massawa stream). **Excludes royalty costs.

In the aftermath of the changes made to our forecasts, a comparison between our quarterly and full-year forecast and consensus forecasts for FY23 adjusted net EPS (plus those for FY24) is as follows:

Exhibit 2: Edison adjusted net EPS from continuing operations estimates cf consensus FY23 by quarter & FY24

(US$/share)

Q123

Q223

Q323

Q423e

Sum Q1–Q423e

FY23e

FY24e

Edison

0.263

0.217

0.281

0.213

0.974

0.975

1.807

Mean consensus forecast

0.263

0.217

0.281

0.330

1.091

1.050

1.520

High consensus forecast

0.263

0.217

0.281

0.500

1.261

1.280

2.100

Low consensus forecast

0.263

0.217

0.281

0.250

1.011

0.700

0.870

Number of consensus estimates

N/A

N/A

N/A

8

N/A

14

14

Source: Refinitiv, Edison Investment Research. Note: Consensus at 29 January 2024.

Following the divestment of Boungou and Wahgnion, discussed in our note last year, Endeavour continues to support the growth of larger, low AISC and longer-life assets such as the Lafigué greenfield project and the Sabodala-Massawa BIOX expansion, which are both on schedule for start-up in Q224 (cf Lafigué previously expected in Q324). At the same time, Endeavour continues with its exploration efforts, with US$65m budgeted in FY24 (cf US$95m in FY23), of which we forecast 75% will be capitalised and 25% will be expensed (cf 38% and 62% in FY23, respectively).

Valuation

Absolute

Endeavour is a multi-asset company that has shown a willingness and desire to trade assets to maintain production, reduce costs and maximise returns to shareholders (eg the sale of Youga in FY16, Nzema in FY17, Tabakoto in FY18, Agbaou in FY20, Karma in FY22 and Boungou and Wahgnion in FY23, and the acquisition of SEMAFO in FY20 and Teranga in FY21). Historically, rather than our customary method of discounting maximum potential dividends over the life of operations back to FY24, for Endeavour we have opted to discount three years of forecast cash flows in FY24–26 back to FY24 and to then apply an ex-growth terminal multiple of 10x (consistent with using a standardised discount rate of 10%) to forecast cash flows in that year (ie FY26). We would normally exclude exploration expenditure from such a calculation on the basis that it is an investment. In the case of Endeavour, however, we include it because it is a critical component of the company’s ability to continually expand and extend its mines’ lives.

For the purposes of this note, we have updated our FY23 and FY24 forecasts to reflect Endeavour’s updated guidance production, cost and capex guidance. We have also adjusted investment cash flows to reflect its disclosures regarding consideration received to date from its divestment of Boungou and Wahgnion to Lilium Capital in June 2023, as well as its guidance related to cash and net debt. Finally, we have also removed any contribution from Kalana pending clarification regarding the group’s development plans for this asset. In the aftermath of these changes, we have updated our FY26 cash flow estimate to US$3.38/share (cf US$1.86/share in FY24), which implies a terminal valuation for Endeavour at end-FY26 of US$33.82/share, calculated using a discount rate of 10%. With forecast intervening cash flows, this terminal valuation then discounts back to a present valuation of US$32.12/share (cf US$34.90/share, previously) at the start of FY24, as shown in Exhibit 3.

Exhibit 3: Endeavour forecast valuation and cash flow per share, FY24–26e (US$/share)

Source: Edison Investment Research

Relative

In the wake of the departure of the company’s CEO, Sébastien de Montessus, in January, Endeavour’s shares are now trading at their lowest level since being admitted to the London Stock Exchange in June 2021 and at a level they were trading at as long ago as January 2017. As such, its valuation on a series of commonly used measures relative to a selection of gold mining majors is as follows:

Exhibit 4: Endeavour’s valuation relative to peers

Company

Ticker

Price/cash flow (x)

EV/EBITDA (x)

Yield (%)

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Endeavour (Edison)

EDV

7.5

4.4

4.1

4.8

4.4

4.1

4.5

5.8

8.2

Endeavour (consensus)

EDV

6.1

4.2

3.8

4.8

4.3

4.1

4.4

4.7

5.3

Majors

Barrick

ABX

7.0

5.9

5.6

7.5

6.0

5.6

2.9

3.1

4.0

Newmont

NEM

8.6

7.0

6.0

10.3

6.4

5.6

4.9

4.5

4.4

Kinross

K

4.4

4.7

5.0

5.1

5.3

5.6

2.2

2.2

2.2

Agnico-Eagle

AEM

9.3

8.4

8.7

7.5

7.6

8.0

3.3

3.3

3.0

Eldorado

ELD

6.4

5.7

5.0

5.8

4.9

4.4

0.0

0.0

0.0

Average

 

7.1

6.3

6.1

7.3

6.0

5.8

2.7

2.6

2.7

Implied Endeavour share price (US$)

17.38

15.46

14.74

28.76

23.51

22.69

30.77

31.05

29.83

Implied Endeavour share price (C$)

24.00

21.34

20.36

39.71

32.46

31.32

42.48

42.87

41.18

Source: Edison Investment Research, Refinitiv. Note: Prices as at 29 January 2024.

Of note is that, without exception, Endeavour’s valuation is lower than the averages of all nine of the measures shown in Exhibit 4 when consensus forecasts are used and eight of the same nine measures when Edison’s forecasts are used. On an individual basis, it is lower than its senior gold mining peers on at least 41 out of 45 (91%) valuation measures if Edison forecasts are used and 43 out of 45 (95%) valuation measures if consensus forecasts are used (note that as recently as November 2023 this latter figure was 35 out of 45 valuation measures or 77%). Reverse engineered, the average valuation measures of its peers suggest a share price for Endeavour of US$23.80 (C$32.86 or £18.73), to which its shares are currently trading at a 25.3% discount.

Exhibit 5: Financial summary

US$'000s

2019

2020

2021

2022

2023e

2024e

2025e

December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,362,121

1,847,894

2,903,756

2,508,100

2,093,614

2,176,719

2,313,963

Cost of Sales

(884,869)

(1,061,891)

(1,675,393)

(1,607,100)

(1,054,595)

(1,016,288)

(1,085,973)

Gross Profit

477,252

786,003

1,228,363

901,000

1,039,019

1,160,431

1,227,989

EBITDA

 

 

618,443

910,295

1,517,263

1,261,300

1,053,819

1,160,431

1,227,989

Operating Profit (before amort. and except.)

 

281,400

546,072

859,409

645,300

612,060

751,447

768,624

Intangible Amortisation

0

0

0

0

0

0

0

Exceptionals

(199,159)

(201,532)

(266,000)

(382,600)

(52,841)

0

0

Other

(9,392)

8,886

(32,263)

(51,900)

(9,700)

0

0

Operating Profit

72,849

353,426

561,146

210,800

549,519

751,447

768,624

Net Interest

(51,607)

(53,774)

(70,623)

(66,200)

(100,750)

(59,680)

(45,738)

Profit Before Tax (norm)

 

 

220,401

501,184

756,523

527,200

501,610

691,767

722,886

Profit Before Tax (FRS 3)

 

 

21,242

299,652

490,523

144,600

448,769

691,767

722,886

Tax

(97,253)

(158,466)

(178,253)

(175,600)

(190,819)

(155,619)

(145,909)

Profit After Tax (norm)

123,148

342,718

578,270

351,600

310,791

536,148

576,978

Profit After Tax (FRS 3)

(76,011)

141,186

312,270

(31,000)

257,950

536,148

576,978

Net loss from discontinued operations

(4,394)

0

0

9,100

(183,900)

0

0

Minority interests

33,126

44,719

64,486

35,400

71,583

93,439

106,671

Net profit

(80,405)

141,186

312,270

(21,900)

74,050

536,148

576,978

Net attrib. to shareholders contg. businesses (norm)

90,022

297,998

513,784

316,200

239,208

442,709

470,306

Net attrib.to shareholders contg. businesses

(109,137)

96,466

247,784

(66,400)

186,367

442,709

470,306

Average Number of Shares Outstanding (m)

157.4

160.8

250.7

247.8

246.9

245.1

244.9

EPS - normalised (c)

 

 

57.20

185.34

204.95

127.59

96.90

180.66

192.08

EPS - normalised fully diluted (c)

 

 

56.95

181.51

203.21

125.32

96.90

178.10

189.36

EPS - (IFRS) ($)

 

 

(0.72)

0.60

0.99

(0.23)

0.01

1.81

1.92

Dividend per share (c)

0

37

56

81

82

107

150

Gross Margin (%)

35.0

42.5

42.3

35.9

49.6

53.3

53.1

EBITDA Margin (%)

45.4

49.3

52.3

50.3

50.3

53.3

53.1

Operating Margin (before GW and except.) (%)

20.7

29.6

29.6

25.7

29.2

34.5

33.2

BALANCE SHEET

Fixed Assets

 

 

2,330,033

5,093,409

5,404,900

4,968,300

5,368,641

5,449,657

5,292,459

Intangible Assets

5,498

24,851

10,000

0

0

0

0

Tangible Assets

2,254,476

3,968,746

4,980,200

4,517,000

4,917,341

5,120,357

4,963,159

Other*

70,059

1,099,812

414,700

451,300

451,300

329,300

329,300

Current Assets

 

 

652,871

1,168,382

1,366,000

1,446,400

1,065,880

1,222,518

1,532,392

Stocks

266,451

305,075

311,300

320,700

261,702

272,090

289,245

Debtors

83,836

104,545

139,900

163,400

228,578

235,408

246,689

Cash

288,186

751,563

906,200

951,100

517,000

656,420

937,858

Other

14,398

7,199

8,600

11,200

58,600

58,600

58,600

Current Liabilities

 

 

(354,931)

(661,171)

(567,100)

(1,045,600)

(708,885)

(735,294)

(762,966)

Creditors

(312,427)

(612,862)

(552,700)

(690,800)

(684,085)

(710,494)

(738,166)

Short term borrowings

(42,504)

(48,309)

(14,400)

(354,800)

(24,800)

(24,800)

(24,800)

Long Term Liabilities

 

 

(963,736)

(1,647,799)

(1,818,100)

(1,281,800)

(1,807,500)

(1,807,500)

(1,807,500)

Long term borrowings

(770,902)

(1,026,337)

(878,600)

(517,000)

(1,089,000)

(1,089,000)

(1,089,000)

Other long term liabilities

(192,834)

(621,462)

(939,500)

(764,800)

(718,500)

(718,500)

(718,500)

Net Assets

 

 

1,664,237

3,952,821

4,385,700

4,087,300

3,918,136

4,129,382

4,254,384

CASH FLOW

Operating Cash Flow

 

 

628,617

1,046,370

1,415,306

1,211,200

839,860

1,169,621

1,227,226

Net Interest

(35,413)

(53,774)

(26,900)

(66,200)

(100,750)

(59,680)

(45,738)

Tax

(109,494)

(186,332)

(205,573)

(189,200)

(238,219)

(155,619)

(145,909)

Capex

(401,227)

(335,599)

(587,496)

(534,300)

(903,200)

(612,000)

(302,167)

Acquisitions/disposals

3,654

(19,000)

(4,700)

12,900

36,100

122,000

0

Financing

2,402

100,000

(89,400)

(101,200)

(60,736)

(8,558)

0

Dividends

(6,154)

(88,288)

(159,800)

(223,800)

(249,154)

(316,344)

(451,975)

Net Cash Flow

82,385

463,377

341,437

109,400

(676,100)

139,420

281,437

Opening net debt/(cash)**

 

 

518,607

525,220

323,083

(13,200)

(79,300)

596,800

457,380

HP finance leases initiated

0

0

0

0

0

0

0

Other

(88,998)

(261,240)

(5,154)

(43,300)

0

0

0

Closing net debt/(cash)**

 

 

525,220

323,083

(13,200)

(79,300)

596,800

457,380

175,942

Source: Company sources, Edison Investment Research. Note: Presented on a pro forma basis with SEMAFO fully consolidated (income statement, balance sheet and cash flow statement) from FY18 balance sheet and Teranga from FY20 balance sheet. EPS normalised from FY18 to reflect continuing business only. *Includes restricted cash and investments. **Excludes restricted cash.


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This report has been commissioned by Endeavour Mining and prepared and issued by Edison, in consideration of a fee payable by Endeavour Mining. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Endeavour Mining and prepared and issued by Edison, in consideration of a fee payable by Endeavour Mining. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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