- One of many high 15 international gold producers and member of the World Gold Council
- Goals to find 10 to fifteen million ounces of indicated sources by 2021
- Shortly approaching a internet money place
What does:
oration () (OTCMKTS:EDVMF) is a number one gold miner with a number of belongings, targeted on West Africa, which affords traders each close to and long run development potential.
The corporate’s technique is targeted on rising the standard of its portfolio to determine long-life mines and low all-in sustaining value (AISC) by way of a give attention to operational excellence, growing initiatives on time and on finances, unlocking worth by way of exploration and sustaining a wholesome steadiness sheet.
The corporate employs 4,700 employees and already has 23 million ounces of measured and indicated (M&I) sources to its identify. It goals to have found between 10 and 15 million indicated ounces by 2021 and has up to now notched up over 6 million.
In July 2020, the corporate efficiently accomplished its acquisition from SEMAFO Inc and built-in SEMAFO’s two belongings Mana and Boungou in Burkina Faso into its portfolio.
Endeavour operates six producing mines throughout Ivory Coast (two mines with Ity and Agbaou) and Burkina Faso (4 at Houndé, Mana, Karma and Boungou). It additionally has 4 potential improvement initiatives (Fetekro, Kalana, Bantou and Nabanga) and a powerful portfolio of exploration belongings on the extremely potential Birimian Greenstone Belt throughout Burkina Faso, Ivory Coast, Mali and Guinea.
How is it doing:
On February 24 this yr, Endeavour Mining reported optimistic pre-feasibility research (PFS) for each its Fetekro and Kalana gold initiatives, in Ivory Coast and Mali respectively, which confirmed lengthy mine lives, enticing economics, and confirmed the corporate has a powerful pipeline of belongings, which it may well develop organically.
The PFS for Fetekro confirmed a ten-year mine which might produce over 200,000 ounces a yr with an after-tax internet current worth (NPV) of US$470 million and inside fee of return (IRR) of 33%, based mostly on a gold worth of US$1,500 an oz.. All-in-sustaining-costs (AISC) have been put at US$838 per ounce.
In December final yr, Endeavour introduced that it had struck a deal to elevate its stake to 80% from 65% within the Fetekro exploration challenge, having stated within the earlier August, that the challenge had the potential to be the corporate’s highest-grade operation, after it greater than doubled indicated sources there.
In the meantime, the PFS for Kalana envisages an 11-year challenge with a median annual manufacturing of 150,000 ounces at AISC of US$901 per ounce. The Kalana challenge confirmed an after-tax NPV of US$331 million and an IRR of 49%, based mostly on a US$1,500 per ounce gold worth. Upfront capital prices have been put at US$297 million.
A month earlier, the miner introduced that it would promote its 85% stake in non-core Agbaou gold mine in Ivory Coast to Allied Gold Corp for as much as C$80 million to focus on high-margin, long-life core belongings. The sale is anticipated to conclude on March 1 this yr, and Endeavour retains a internet smelter royalty (NSR) royalty on ounces produced in extra of the Agbaou reserves as at an estimate on the finish of 2019.
And on November 16 final yr, Endeavour confirmed it was shopping for Teranga Gold Company () (OTCQX:TGCDF) (FRA:0TGA), a low-cost, mid-tier gold producer with two producing gold mines in Burkina Faso and Senegal, in a C$2.4 billion deal. As soon as finalized, the mixed firm could have gold manufacturing of over 1.5 million ounces per yr and boast one of many largest exploration portfolios within the Birimian greenstone belt.
Regardless of the challenges of the coronavirus pandemic, Endeavour generated a file 908,000 ounces of gold to end-December 2020, which was a 39% improve on 2019.
Fourth-quarter output got here in at 344,000 ounces of the yellow metallic, whereas its AISC decreased by 15% to round US$770 per ounce within the three months. It was the eighth consecutive yr the group achieved its annual output steering, it famous.
The group’s internet money place was round C$70 million on the year-end, marking a discount in internet debt of round $245 million throughout This fall, 2020 and of round C$600 million throughout the entire yr.
Considerably, Endeavour introduced that it might pay a primary dividend cost on February 5 this yr, and stated it might improve the dividend and/or perform a buyback as soon as it has reached a focused internet money place of C$250 million.
Endeavour informed traders that it might strongly focus this yr on free money movement era and progressing its natural development pipeline. A definitive feasibility examine (DFS) is focused for the Sabodala-Massawa plant enlargement within the fourth quarter, it added. The group’s 2021 exploration finances stands at between C$55 million and 60 million.
What the dealer says:
Following information on the optimistic pre-feasibility research for the Fetekro and Kalana initiatives, dealer repeated a ‘Purchase’ ranking on Endeavour Mining and a C$48 per share worth goal (present worth: round C$25).
“The corporate had anticipated to prioritize certainly one of these initiatives to take to the feasibility stage, however based mostly on the optimistic outcomes (each initiatives have IRRs >30% at $1,500/oz), Endeavour now plans to advance each initiatives to feasibility; Fetekro FS anticipated in late 2021 and Kalana FS in early 2022,” stated analyst Carey MacRury in a word to purchasers.
“We count on Endeavour to construct solely certainly one of these initiatives at a time (seemingly Fetekro) with a possible building resolution in 2022. Fetekro and Kalana are two of the corporate’s most superior initiatives of their deep pipeline, which additionally consists of the Golden Hill and Afema initiatives acquired with the Teranga acquisition and Nabanga acquired with the SEMAFO acquisition.”
Inflection factors:
- Fetekro feasibility examine
- Sabodala-Massawa plant enlargement DFS
- First-quarter outcomes
What the boss says:
Within the assertion accompanying the group’s 4Q 2020 outcomes, Sebastien de Montessus, Endeavour’s president and chief government, famous that 2020 had been a transformational yr for the corporate because it consolidated its place in West Africa.
“Despite the challenges offered by the worldwide pandemic, we’re proud to have achieved our annual manufacturing and AISC steering for the eighth consecutive yr. Looking forward to 2021, our focus would be the integration of the Teranga belongings and progressing our natural development pipeline,” he stated.
Contact the creator at giles@proactiveinvestors.com
