Endeavour Mining confident after strong first quarter

Endeavour Mining reported a strong first quarter on Thursday, with production rising 14% year-on-year to 357,000 ounces, as its all-in sustaining costs were “relatively flat” at $848 per ounce.

The FTSE 100 gold miner said it was “well-positioned” to meet its full-year guidance of 1.32 to 1.4 million ounces at an all-in sustaining cost of $880 to $930 per ounce.

Adjusted net earnings were up $22m year-on-year for the three months ended 31 March to $122m (£97.4m), and were 2% higher on a per-share basis to 49 cents per share.

Operating cash flow grew by $96m to $299m, and was up 23% on a per-share basis to 121 cents per share.

Endeavour’s net cash position increased by $90m during the quarter to $167m, even after it paid $101m in capital returns to shareholders.

Looking at its returns, a 2021 second-half dividend of $70m was paid in the quarter, making for a total of $200m of dividends paid out since early 2021.

Share buybacks were continuing to supplement shareholder returns, with $31m of shares repurchased in the first quarter, totalling $169m since the buyback programme began in April last year.

On the organic growth front, Endeavour said the Sabodala-Massawa expansion project was launched in the second quarter, and the definitive feasibility study was underway for the Lafigué greenfield project.

The board said the company was continuing its “strong focus” on exploration, with $18m spent in the first quarter out of the annual budget of $80m.

“We are pleased to have started the year on a strong footing with both production and all-in sustaining costs well positioned to meet full year guidance,” said company president and chief executive officer Sebastien de Montessus.

“This performance has resulted in robust cash flow generation during the quarter which, in line with our capital allocation framework, was used to further strengthen our balance sheet, to continue our attractive shareholder returns programme, and to reinvest back into our business.

“Our net cash position has improved by $90m to reach $167m by the end of the quarter, and we also returned more than $100m to shareholders over the period through dividends and buybacks.”

De Montessus said the firm was focussed on enhancing its resilience by improving the quality of our portfolio through organic growth opportunities and optimisation initiatives.

“As such, we have recently begun the expansion of Sabodala-Massawa and the definitive feasibility study for our Lafigué project is nearing completion.

“In addition, we are continuously working on improving the efficiency of our operations by identifying and pursuing high priority optimisation initiatives, in an effort to remain a low-cost producer despite the industry-wide inflationary pressures.

“Endeavour’s robust operational and financial performance this quarter demonstrates the strong momentum across our business and we look forward to the remainder of the year.”

At 0919 BST, shares in Endeavour Mining were up 7.37% at 2,084p.