Endeavour mining ends strong year in line with guidance

Endeavour Mining reported “strong” fourth quarter production of 398,000 ounces on Monday, up 4% over the third quarter, while its all-in sustaining costs remained stable at around $900 per ounce.

The FTSE 250 company reached record annual production for 2021 of 1,536,000 ounces, beating the annual guidance of between 1,365,000 and 1,495,000 ounces, at an all-in sustaining cost of $880 per ounce, which was within its guidance of $850 to $900 per ounce.

It marked the ninth consecutive year of the firm achieving or beating its annual guidance.

Endeavour issued production guidance for 2022 of 1,400,000 to 1,500,000 ounces at an all-in sustaining cost of $890 to $940 per ounce, in line with the outlook it provided at its June investor day.

The company’s net cash position at year-end was $76m, which was achieved despite absorbing around $330m of net debt from Teranga and paying $268m in shareholder returns during the year.

Its board declared a second-half dividend of $70m, making for total 2021 distributions of $140m - above the minimum committed dividend of $125m for the full year.

Endeavour also reported that share buybacks were continuing to supplement shareholder returns, with a total of $138m of shares repurchased since April, $44m of which were repurchased in the fourth quarter.

“2021 was another successful year for Endeavour in which we delivered against all our objectives,” said president and chief executive officer Sebastien de Montessus.

“Our focus was on executing our capital allocation priorities to fully implement our shareholder returns programme, while supporting our operations, continuing to strengthen our balance sheet and investing in exploration.

“Operationally, after the rapid and successful integration of the Teranga and SEMAFO assets, we were able to achieve a record year with production in excess of 1.5 million ounces, ensuring we have now met or exceeded guidance for the ninth consecutive year.”

De Montessus said the “strong” operational performance generated “significant” cash flow, which allowed the firm to deliver “robust” shareholder returns while improving its balance sheet position.

“Since commencing our shareholder returns programme, marked by the first dividend payment in early 2021, we have already returned $338 million by way of dividends and buybacks.

“On the balance sheet front, we have re-established a strong net cash position after absorbing circa $330m of net debt following the Teranga acquisition.”

As a result, Sebastien de Montessus said the company had entered 2022 with “considerable momentum”, and expected to deliver another strong year.

“We will continue to drive value for shareholders through prudent balance sheet management, cash flow generation and shareholder returns while we remain focussed on building long-term value through our key growth projects and exploration.”

At 0908 GMT, shares in Endeavour Mining were up 0.3% at 1,665p.