Endeavour Mining meets output targets, but costs rise more than expected

Endeavour Mining achieved production guidance in 2023 but costs were higher than expected, as it pointed to further shareholder returns in the near future.

Fourth-quarter production was flat over the third quarter at 280 thousand ounces (koz), taking full-year output to 1,072koz, towards the lower end of the 1,060koz to 1,135koz target. This was the 11th straight year of achieving or beating production guidance, the company said.

All-in sustaining costs (AISC) were 3.2% lower over the three months to 31 December at $936/oz, but averaged $964/oz for the year, above the guided $895/oz to 950/oz range due to an increase in royalty costs, up from $928/oz in 2022.

Looking ahead, production is estimated to rise 18% to 1,130koz to 1,270koz in 2024, helped by project start-ups in the second quarter of the year, while AISC are set to come within the range of $955/oz to $1,035/oz.

The company, which earlier this month announced the abrupt firing of former chief executive Sébastien de Montessus over an "irregular payment instruction" worth $5.9m, named its deputy chair Ian Cockerill as successor with immediate effect.

Commenting on fourth-quarter trading on Monday, Cockerill said: “I am honoured to assume the role of CEO at a pivotal time for Endeavour as strong foundations are in place to unlock significant value as we deliver on our organic growth pipeline.

"On the operational front, we are pleased to have met production guidance for the eleventh consecutive year and to remain one of the lowest all-in sustaining cost producers within the sector, allowing us to generate robust cash flow to fund both our organic growth and shareholder returns programmes."

In 2023, the paid $200m of dividends and repurchased $66m of shares, which is the equivalent of paying back $226 for every ounce of gold produced.

"Looking ahead, our goal is to increase returns further once our two ongoing organic growth projects are complete," Cockerill said.